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If you want to own real estate but don’t fancy being a landlord, investing through online crowdfunding platforms can be a great alternative. These platforms can help you streamline your real estate investment process to generate a passive income cash flow.
Real estate also makes for an excellent investment. It has performed very well historically and generated superior returns for decades compared to other asset classes. So, if you want to create long-term wealth and diversify your investment portfolio, real estate is an asset class you should not neglect.
This Origin Investments review will dive deeper into its available features, how the platform works, and its pros and cons. We will also look at the fees, customer service, and who should invest in the platform.
Bottom Line: Origin Investments is a private equity real estate platform offering accredited investors access to real estate deals, mainly multifamily investment. Since launching in 2007, Origin Investments has executed more than $3.1 billion in real estate transactions.
|Features and tools
|Ease of use
What Is Origin Investments?
Origin Investments is a real estate investment firm founded in 2007 by David Scherer and Michael Episcope that provides accredited investors with private real estate investment options in fast-growing cities across the country.
In recent years, the company got into real estate crowdfunding by offering real estate investment funds to its investors. In essence, Origin Investments operates as a financial assets company, providing its own financial products instead of accessing a marketplace of choices.
The company focuses on acquiring multifamily residential real estate without a broker to save on commissions and build and protect their investors’ wealth.
How Does Origin Investments Work?
On its platform, accredited investors can currently invest in two main funds, the IncomePlus Fund and the QOZ Fund III. These funds bundle multiple real estate properties together into a portfolio and allow investors to buy shares of these funds, making them similar to REITs, although operating as LLCs.
Once you are invested, you will receive distributions according to your investment ratio.
The minimum deposit varies depending on the deal type you want to invest in on Origin Investments, but the company claims most of these requirements are between $50,000 and $100,000.
Requirements To Open an Account
Although Origin Investments says it has a few select offerings for some non-US residents, this platform is geared toward American accredited investors. Therefore, you’ll need to prove your accredited investor status with a “written certification from a licensed professional,” which could include your attorney or private wealth manager.
In addition to documents proving accredited investor status, you’ll need to share know-your-customer (KYC) details in the sign-up process, including a phone number, home address, and email.
How to Open an Origin Investments Account
To register for an account, click on the invest button on the website’s top right corner and enter your name, e-mail address, and phone number. You are also required to select your investor type and the offerings that interest you.
Once you submit the form, an Origin Investments team member will reach out to you and guide you through the entire process.
Keep in mind that only accredited investors can invest on the platform. To qualify as an individual, you must meet one of the following two criteria:
- $200,000 in annual income per year for the last two years ($300,000 with a spouse)
- $1 million in net worth, excluding your primary residence
Origin Investments Features
Origin Investments doesn’t have many bells and whistles when it comes to features. However, they provide what investors need: multiple investment options, a reinvestment plan, an investor dashboard, an app, as well as educational resources.
|1.25% per year and 2% setup fee if you invest less than $250,000
|5 years plus
|Equity and preferred equity
|Residential and commercial
|24% average gross IRR
|Atlanta, Austin, Charlotte, Dallas, Denver, Jacksonville, Las Vegas, Nashville, Orlando, Phoenix, Raleigh, Salt Lake City, San Antonio and Tampa
|Phone (+1 800 628-8008) and Email ([email protected])
Accredited Investors Only
Origin Investments’ offerings are only available to accredited investors. An Origin team member will verify the status before you commit to any investment. Accredited investors are typically high-net-worth individuals who have to meet the specific criteria mentioned above to qualify as accredited.
Alternatively, banks, insurance companies, and registered or small business investment companies can invest. Employee benefit plans, trusts, charitable organizations, and partnerships also count as accredited investors.
This fund focuses primarily on multifamily units in ten states that Origin Investments identified as having a high potential for growth in the ensuing years (including Texas, Florida, and Arizona). According to Origin Investments’ goals and statistics, it aims to deliver 9% – 11% annual returns to investors in this fund, and it currently has a minimum requirement of $100,000.
QOZ Fund III
While the QOZ Fund III also invests in multifamily homes, it’s specifically designed to take advantage of tax benefits from the Tax Cuts and Jobs Act of 2017.
Under this law, investors who use profits from gains in other assets (e.g., stocks, fine art, or Bitcoin) to invest in this fund have the option to defer capital gains taxes and enjoy zero tax federal payments for appreciation in the QOZ Fund III (provided they keep this investment for at least ten years).
This law aimed to incentivize investment in areas the federal government identified as needing enhanced economic activity (aka “Qualified Opportunity Zones”). Origin Investments strives to return 10% to 12% for investors in this fund, and it has a $50,000 minimum investment at the time of writing.
Strategic Credit Fund
As the name suggests, the Strategic Credit Fund is focused on credit and loan origination rather than investing directly in property, which is typically most intriguing for investors who want consistent yield.
Unlike the prior two offerings, this fund is offered through the affiliate company Origin Credit Advisers, and it gives investors access to fixed and floating rate loans for multifamily homes from Freddie Mac, plus private senior and mezzanine-level financing for multifamily houses.
This pool of assets gives investors a more reliable source of income and the opportunity to reinvest dividend payments for compounding returns. Since its start in 2021, the Strategic Credit Fund has an average annualized yield of 7.63% and a $100,000 minimum investment.
One of Origin Investments’ unique selling points is its proprietary machine-learning platform known as “Origin Multilytics.” Using an advanced suite of in-house artificial intelligence tools, this program helps Origin Investments’ analysts identify rental markets with the highest potential for future growth.
According to Origin Investments’ statistics, this Multilytics tool provided their team with a 95% accuracy rate between 2021 – 2022 when identifying submarkets with more or less than 3% rent growth.
Origin Investments also claims Multilytics has a low margin of error at just $10 – $15 when projecting rent growth over the past five years.
Origin Investments has previously launched what they call Growth Funds. The Growth Funds are one of their core offerings and have brought in excellent returns. They aim to acquire value-adding multifamily, industrial, and office properties in high-growth markets across the United States.
The co-founders David Scherer and Michael Episcope also invest millions of dollars alongside accredited investors.
The fund targets smaller transactions of $10 to $40 million as there is limited competition and abundant inefficiencies. The reason is that these assets usually require too much equity for smaller players and aren’t interesting enough for large institutional owners. However, the minimum investments for their Growth Funds range from $100,000 to a staggering $500,000.
Distribution Reinvestment Plan (DRIP)
When it comes to distributions, investors can choose between mailed cash or depositions to their bank accounts. However, the third option is what long-term investors are often looking for a dividend reinvestment plan (DRIP), which automatically reinvests distributions to grow their nest egg for the future.
Luckily, Origin Investments offers you the opportunity to enroll in their DRIP and reinvest back into your chosen fund.
You have 24/7 online access to your investor dashboard if you want to know more about your investments.
You will find all the information and stats you need in your investor account, including performance, cash flows, historical returns, fund details, and more.
Origin Investments also aims to educate its investors about real estate investing. Their Origin Insights newsletter page features a ton of blog articles on various topics related to their niche.
Readers can filter for articles that are recent, popular, or feature industry news. In addition, readers can select content that covers the basics of real estate investing, requires advanced knowledge, or is relevant for advisors.
Origin Investments Performance
Since Origin Investments’ inception in 2007, it realized 44 real estate deals totaling $3.1 billion in transaction volumes.
The actual and target yields for funds on this platform depend on unique factors for each investment product, but an early closed growth-oriented fund (aka Growth Fund I) had a realized Internal Rate of Return (IRR) of 27.7%.
Origin Investments published the latest expected IRRs for Growth Funds II and III at 19.7% and 11.7%, respectively. Remember that the expected rates for other income-oriented funds tend to have lower target yields; for instance, the IncomePlus Fund has expected annual returns of 9% – 11%.
Origin Investments Pricing and Fees
The fee structure can vary depending on the fund you invest in. Origin Investments charges an annual asset management fee of 1.25% based on net asset value and a one-time 2% setup fee if you invest less than $250,000.
On top of that, Origin charges a variable performance fee. However, the performance fee is only triggered if the returns reach a certain threshold and only a portion of the returns above that threshold is paid to the company.
Currently, the company charges a 10% performance fee after reaching the 6% minimum profit threshold for its IncomePlus Fund. For the QOZ Fund, it’s a 15% performance fee after reaching 7%.
Nonetheless, prepare to pay additional fees, such as an acquisition fee, depending on the particular fund.
Origin Investments Security
Origin Investments takes the security and privacy of its customers and their data very seriously, according to its website.
When it comes to cyber security and data redundancy, all their components use industry standards such as SSL connections, SSH encryption, and Amazon Web Services. Moreover, their staff is trained to maintain and improve its platform continuously.
At the same time, Origin constantly audits and monitors its systems to maintain integrity. They also use third-party firms to ensure a secure user experience.
Origin Investments Customer Service
Once you have registered for an Origin account, you get access to an investor relations associate. This representative serves as your primary point of contact and answers all your questions. When you are logged into the portal, you will get a link to their e-mail address.
However, you can also contact Origin Investments’ regional offices via phone (+1 800 628-8008) or use their e-mail ([email protected]) and contact form to get in touch with the investor relations team.
Origin Investments Ease of Use
Origin Investments has a professional desktop platform that’s easy to navigate. It’s also simple to set up an account, provided you have documentation from a professional to prove your accredited status.
However, it isn’t easy to find external reviews on Origin Investments as it doesn’t have an official Trustpilot or Better Business Bureau (BBB) page.
Also, Origin Investments doesn’t offer a mobile app, so there’s no easy way to manage funds on your smartphone.
Origin Investments Pros Explained
- Multiple investment options in fast-growing markets: The Origin Investments team has already closed dozens of deals in hundreds of hot markets throughout the USA, and they continue to pounce on favorable opportunities they spot through their internal Multilytics results. In addition to an exciting array of real estate properties, Origin Investments categorizes these opportunities for both income and growth-oriented investors so everyone can choose the ideal option for their preferences.
- A Dividend Reinvestment Plan: Investors can reinvest their dividends into their Origin Investments fund to compound their earnings and potentially increase their investment’s value if the underlying assets continue to rise. This Dividend Reinvestment Plan (DRIP) is particularly powerful as a passive income strategy for investors in income-oriented accounts like the Strategic Credit Fund.
- Extensive education section: In the “Resources” tab on Origin Investments homepage, there are links to an exhaustive real estate educational hub as well as a library with reports and analytics from Origin Investments’ team of experts. Origin Investments also frequently hosts live and video-based events to inform investors about the latest opportunities on their platform.
- Strong performance record for over a decade: Co-founders David Scherer and Michael Episcope launched Origin Investments in 2007 to make real estate more accessible to non-institutional investors, and the platform continues to show signs of strength to this day. With over $3.1 billion managed and 44 successfully realized deals, Origin Investments has a solid track record for generating value for investors.
- Founders invested $85+ million in Origin Funds: According to Origin Investments’ “About” page, co-founders David Scherer and Michael Episcope have a sizable stake in the company’s funds. With over $85 million of their own money invested in Origin Funds, investors can feel better knowing leadership has a significant financial stake in providing value to clients.
- Multifamily real estate is considered a relatively safe investment: There are never guarantees in investing, but multifamily real estate is one of the common asset categories in the “safe” bracket due to its necessity even during economic downturns. While multifamily homes may not offer the same level of growth as other asset categories, it’s ideal for conservative investors who prioritize security and a steady income.
- Origin receives a share of profits only if they achieve a certain profitability: Origin Investments promises only to reap the rewards of their real estate ventures if they hit their target for client value. This firm also claims to use a merit-based model to reward employees who go above and beyond for their clients, which may motivate team members to find the best offers and provide optimal customer care.
- Investors get a personal contact to lean on for support: Speaking of customer care, Origin Investments works directly with its investors to provide high-quality service when selecting real estate deals. Clients who enjoy working directly with team members often like the personal touch Origin Investments provides.
Origin Investments Cons Explained
- Highly illiquid investments due to fund structure: While Origin Investments has a few “short-duration” funds, these assets aren’t easy to sell and carry high fees for early liquidation. People who are getting into Origin Investments often need to make a multi-year commitment to get the most out of their real estate deals.
- High investment minimums of $50,000 and more: With the “lowest” minimum deposits set at $50,000, Origin Investments forces investors to tie up a lot of money in real estate ventures. Also, since these minimums are so high, portfolio diversification is limited.
- Only accredited investors can invest: There’s a steep barrier to entry to get on Origin Investments’ platform. If people don’t make $200,000 per year ($300,000 with a spouse) or have a net worth of $1 million, they can’t take advantage of Origin Investments products.
- Diversification across real estate types is low: Origin Investments has properties and deals in many different states and stages of development, but it focuses most of its attention on the multifamily housing sector. While this market is attractive and an area of expertise for the Origin Investments team, investors may not find the diversity they’re looking for on this site.
Origin Investments Alternatives
Origin Investments only offers services tailored to accredited investors. Therefore, you might want to check out similar crowdfunding platforms or companies that allow non-accredited investors to invest. Find two alternatives below:
Origin Investment vs. Fundrise
Moreover, with Fundrise, users can start investing in real estate with as little as $10 compared to the $50,000 requirement from Origin Investments.
With Fundrise, investors also invest in commercial and residential real estate instead of multifamily properties. Fundrise only charges investors an annual 0.15% advisory fee and a 0.85% annual asset management fee. Besides, investors don’t pay a performance or acquisition fee. Read our full Fundrise review to learn more.
Origin Investment vs. CrowdStreet
Another alternative is CrowdStreet, which gives investors access to commercial real estate investment opportunities. Investors can back greatly diversified funds, individual deals, or a professionally managed investment portfolio on this crowdfunding platform.
Also, the minimum investment is only $25,000, which is much less than the minimum investment at Origin Investments. You could invest in different asset classes or diversify your real estate portfolio even further with the remaining difference.
A huge benefit is that you don’t have to pay any account or asset management fees like on Origin Investments. Read our full CrowdStreet review to learn more.
|1.25% per year and 2% setup fee if you invest less than $250,000
|0.50% to 2.5% (Funds); Project fees vary
|1.0% per year or $10 per month for Fundrise Pro
|Advisory fee waived (*12 months)
|Access to private real estate investments
|Access to commercial real estate investment opportunities
|Access to private real estate deals
|Long-term accredited investors
|High net-worth individuals
|Long term investors
Who Is Origin Investments Best For?
Currently, Origin Investments is only suitable for seasoned accredited investors who understand the benefits, complexity, and risks of investing in real estate assets.
Moreover, only investors with a high net worth will be able to invest with Origin, as the minimum investments start at $50,000 and can go as high as $500,000. Still, the returns probably justify these minimums.
Origin Investments Review FAQ
We know that investors want to be informed before investing on a real estate platform. Therefore, we look at the most frequently asked questions and answer them below.
Is Origin Investments Safe to Invest With?
Technically speaking, every investment comes with a certain level of risk. However, Origin Investments is a safe platform to invest with. The co-founders have serious skin in the game themselves.
Besides, multifamily properties are considered to be on the safer side of the real estate spectrum. In addition, they spread the risk by diversifying capital across multiple properties.
How Are Origin Investments’ Funds Different from REITs?
Origin Investment’s funds have an LLC structure that passes tax benefits to their investors.
In contrast, if you invest in a REIT, these benefits are captured already on the REIT level. Therefore, every distribution you receive from a REIT will be taxed at your ordinary income rate.
Moreover, Origin only asks for investments after they have found a property. You also pay lower fees as you invest through the platform directly and don’t have a middleman to pay to invest your money for you.
Does Origin Investments Offer a Mobile App?
No, Origin Investments doesn’t have a mobile app. Investors need to feel comfortable with a desktop-only setting when using this platform.
When and How Can You Sell Origin Investments’ Funds?
Usually, private crowdfunded real estate investments are illiquid and can’t be sold. However, Origin Investments may offer to repurchase shares every quarter. Still, there is no guarantee that they will.
To even be eligible, you must hold your investments for at least one year. If Origin repurchases your stake, they will give you 90% back after one year and 100% if you hold on to your shares for 5+ years.
What Is Origin Investments’ Due Diligence Process?
Origin Investments conducts a thorough five-step due diligence process to acquire suitable properties.
First, they hire professionals and develop a marketing plan before performing financial due diligence.
From there, they undertake legal and physical due diligence processes. Ultimately, they check environmental aspects as these can create high costs.
In A Nutshell
- Account Minimum: $50,000
- Fees: 1.25% per year and 2% setup fee if you invest less than $250,000
- Promotion: None
on Origin Investment’s website
Origin Investments has shown that it can perform across multiple real estate cycles. Also, not many crowdfunding platforms can boast of being backed by co-founders with more than $60 million.
Moreover, using portfolios instead of standalone deals to diversify capital is an excellent way to reduce risk. And if you invest in their funds, you can benefit from the tax advantages these LLCs provide and reinvest your distributions immediately.
Still, the significant investment minimums and the fact that these deals are very illiquid are aspects that investors must consider and be okay with to invest. What makes it easier is that Origin primarily invests in multifamily residential properties, which don’t rely on a single tenant.
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Carsten is a Freelance Copywriter with a personal interest in money management and investing. Besides taking care of his investments, he loves traveling, reading books, and working out (calisthenics & yoga).