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Concreit Investing Review – The Best Real Estate Crowdfunding Platform?


FEATURED PROMOTION

Concreit Real Estate Investing Logo

Our rating

4.5/5

Pros

  • thumbs-upAllows non-accredited investors
  • thumbs-upNo minimum investment
  • thumbs-upWeekly dividends
  • thumbs-upMore liquidity than most real estate crowdfunding platforms

Cons

  • thumbs-downLack of investment options
  • thumbs-downModest returns compared to other real estate crowdfunding platforms
  • thumbs-downNo desktop platform
  • thumbs-downEarly withdrawal fee in first 12 months


Dig Deeper

Additional Resources

Concreit is not your typical real estate crowdfunding platform. 

To begin with, Concreit positions itself as an alternative to savings accounts, not other real estate investments. But the differences don’t end there. With its strong liquidity and low fees, Concreit offers a rare way to make short-term real estate investments. 

Read on to learn how Concreit throws out the traditional real estate crowdfunding script to offer a fresh model.

Key Features of Concreit for Real Estate Investing

Concreit offers a pooled fund made up of loans secured by real estate, similar to a mortgage real estate investment trust (mREIT). It was founded in Seattle in late 2018 by Jordan Levy and Sean Hsieh, who previously founded and sold a telecom startup called Flowroute.

You invest money through Concreit’s mobile app. The app then uses your money to purchase shares in Concreit’s REIT. You earn returns based on the fund’s performance, although Concreit targets a fixed 5.5% dividend yield.

Here’s what else you need to know about Concreit.

Underlying Real Estate Investments

Concreit’s fund primarily owns loans secured against real estate. 

These debts include loans secured by:

  • Bridge and refinance loans
  • Light renovation loans
  • Heavy rehabilitation loans
  • New construction projects

As you can see, most of these loans are short-term loans for renovating or building properties. These work similarly to hard money loans for real estate investors: high-interest, low loan-to-value ratio (LTV), and short payback terms. Those short loan terms keep the cash turning over, which helps Concreit maintain higher liquidity than its competitors.   

As of April 2022, Concreit owns 155 loans. They’re largely concentrated in the Pacific Northwest, with some exposure to the Southeast and elsewhere. While Concreit initially launched as a hybrid fund that owned properties within a real estate portfolio, it’s mostly a diversified portfolio of loans today.

Liquidity of Your Investments

At any time, you can submit a withdrawal request. It typically takes one week to convert your fund shares to cash.

That’s a big departure from other real estate crowdfunding platforms. Most Concreit competitors either don’t allow selling within a certain time frame or hit you with hefty penalties for early withdrawals.

That said, the Concreit redemption program does come with a few caveats. To begin with, Concreit can’t guarantee a specific timeline. If it receives a surge of redemption requests all at once or don’t have sufficient funds in their cash reserve, you may have to wait longer than a week to receive your cash. 

Concreit also charges its own form of early redemption fee as well, albeit one with less bite.

Returns & Dividends

Concreit aims for a 5.5% dividend yield each year. That works out to $55 in dividends for every $1,000 invested. So far, Concreit has delivered on that goal.

With their “Instant Earn” policy, you start earning dividends from the moment you click “Transfer” to send money from your bank account to your Concreit account. Concreit doesn’t make you wait until the ACH transfer hits your account to start earning returns.

Unlike most investments, which pay dividends monthly or quarterly, Concreit pays investors a dividend every single week. You can take your dividends in cash or automatically reinvest them through the platform’s dividend reinvestment plan

While the net asset value — NAV or share price — could theoretically go up, Concreit holds the NAV at $1.00 to keep account values simple. Which makes sense: the minimum investment is $1.00, because each share costs $1.00. 

In other words, Concreit’s appeal lies in the dividend yield, not asset appreciation. Don’t count on your investment’s NAV going up.

Penalty and Asset Management (AUM) Fees

If you go to withdraw funds within a year of investing, Concreit charges you an early withdrawal fee equal to 20% of the dividends you received. 

For example, say you invest $1,000 and receive a 5.5% dividend, or $55 per year. If you withdraw money just before the end of that year, you’d receive $1,044 instead of $1,055. You’d get back your original $1,000 principal investment in full, plus the 5.5% dividend — minus 20% of that dividend to cover the early withdrawal penalty. 

For all withdrawals, Concreit charges a 0.1% ACH fee for transferring the funds to your bank account via ACH. 

Concreit also charges 1% of all your assets under management (AUM) each year as an ongoing management fee, but that’s already accounted for in the 5.5% dividend yield. That 5.5% dividend yield is net of fees. In fact, if you refer friends to the platform, Concreit waives this 1% fee, allowing you to earn up to 6.5% total each year.

Referral Rewards (Dividend Bonus)

When you refer friends to Concreit, you earn $10 in rewards that increase your dividend payout by a corresponding amount. 

These reward points accrue in your account, and you’re eligible to receive a Dividend Bonus as long as Concreit has liquid funds available. Assuming sufficient liquidity, you can earn up to 1% of your account balance in extra dividends in any given year. The reward balance carries forward to the next year if you max it out this year.

You can read more about Concreit’s referral rewards here.

You can also start earning the dividend return immediately when you initiate a transfer to Concreit. Known as Instant Earn, this program ensures you don’t have to wait until the transfer clears to begin profiting from your investment.

Mobile Platform – Intuitive and User-Friendly

Concreit operates on a mobile app only. You can’t sign up or manage your investments through a desktop website. 

While that’s bad news for people who prefer managing money on their desktop computer, Concreit’s mobile app is extremely intuitive and user-friendly. It guides you through the signup process quickly and easily using a simple interface. 

The Concreit app is available on both the iOS and Android app stores. It includes a built-in database of common questions and features a live chat service for human help.

Educational Resources

With its $1 minimum investment, many of Concreit’s potential investors are just starting their financial journeys. They might not know much about personal finance or investing yet.

That’s why Concreit offers some foundational education resources, plus an active blog for ongoing education and financial news. Concreit sees it as part of their mission to help educate their investors, especially on real estate investing

Nor do they only target younger investors. With its consistent, high dividend yield, Concreit offers an alternative to bonds as a passive income source for Americans nearing or in retirement.

So, don’t sweat it if you don’t know much — or anything — about real estate before signing up with Concreit. The platform is committed to teaching you the basics as you go. Plus, the high liquidity and lack of a long-term commitment make it a great first real estate investment.


Advantages of Concreit for Real Estate Investing

Concreit’s unique approach to real estate crowdfunding comes with plenty of upsides. Consider the following benefits as you explore investing here.

  • Open to Retail Investors. Any U.S. citizen over 18 can invest money with Concreit.
  • Low Minimum Investment. With a minimum investment of $1, you might as well say there’s no minimum investment at all.
  • Relatively Strong Liquidity. While it doesn’t compare to holding your money in cash at a bank savings account, you can access your money far faster and with fewer fees than any other real estate crowdfunding platform I know of.
  • Solid, Frequent Dividend. A 5.5% dividend is nothing to sneer at. Plus, few other investments provide dividend payments weekly.
  • Managed Risk. With short-term loans secured at low LTV ratios against real property, Concreit keeps its risk profile low. 
  • Automated Investing. You can set up automated recurring transfers into your Concreit account, to put your savings on autopilot. 
  • Slick Mobile App. Concreit’s mobile app is intuitive and easy to use. 
  • Instant Earn. As soon as you commit money, you start earning a return on it, even before it hits your account and gets invested in the REIT.
  • Referral Rewards. You can earn up to 1% per year in extra dividend yield by referring friends, assuming Concreit has adequate liquidity to fund the bonus.

Disadvantages of Concreit for Real Estate Investing

No investment comes without drawbacks, and Concreit is no exception. Consider these downsides before investing any money here.

  • One Investment Option. Concreit offers exactly one investment option: the Concreit Fund I LLC. This pooled fund owns all of Concreit’s real estate-secured assets, so you can’t specify which investments you want to include or exclude.
  • Modest Returns. As real estate investments go, Concreit sacrifices high returns in favor of lower risk and shorter-term investments for greater liquidity. If you don’t mind tying up your money for several years, you can earn more on other crowdfunding platforms. 
  • No Desktop Platform. Not everyone loves mobile apps. Investors who prefer managing their assets on their desktop computer won’t relish Concreit’s mobile-only approach. 
  • Early Withdrawal Fee. While it pales compared to other real estate crowdfunding platforms’ early withdrawal fees, Concreit does ding your dividend if you pull money out within the first 12 months of investing.

How Concreit Stacks Up to Other Crowdfunding Platforms

Concreit holds up well in direct comparison to other real estate crowdfunding platforms thanks to its ease of access and strong liquidity.

However, note that some competing investment options also appreciate in value. The NAV grows over time, adding to your total return. That’s not the case with Concreit, at least not yet. 

ConcreitHappyNestFundriseStreitwise
Underlying InvestmentLoans secured by real estateCommercial real estateResidential & commercial real estateCommercial properties
Ownership TypeShares in pooled fundShares in pooled fundShares in pooled fundsShares in pooled funds
Ease of Selling SharesEasyDifficultModerateDifficult
Minimum Investment$1$10$10$5,000
AvailabilityAll investorsAll investorsAll investorsAll investors
Portfolio Size & DiversityHighLowHighLow
Dividend Yield in 20215.5%Undisclosed2.9% to 5.0%8.4%
Operating Since2018201720122017

Final Word

Concreit has paid a consistent 5.5% dividend since launching and offers unusually generous liquidity for a real estate crowdfunding investment. Even if you cash out shares within the first year and pay the early withdrawal penalty, you won’t lose any principal. You’ll just sacrifice part of your dividend yield. 

Moreover, Concreit offers a healthy tradeoff between low risk and moderate annualized returns. It works as both a viable short-term investment and a low-risk alternative to bonds for passive income as you near retirement

All in all, Concreit is an easy first foray into indirect real estate investing. It allows everyday investors to diversify with virtually no minimum investment or time commitment.

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Concreit Real Estate Investing Logo

Our rating

4.5/5

Pros

  • thumbs-upAllows non-accredited investors
  • thumbs-upNo minimum investment
  • thumbs-upWeekly dividends
  • thumbs-upMore liquidity than most real estate crowdfunding platforms

Cons

  • thumbs-downLack of investment options
  • thumbs-downModest returns compared to other real estate crowdfunding platforms
  • thumbs-downNo desktop platform
  • thumbs-downEarly withdrawal fee in first 12 months
Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airline, or hotel chain, and has not been reviewed, approved, or otherwise endorsed by any of these entities. Opinions expressed here are the author's alone, not those of the bank, credit card issuer, airline, or hotel chain, and have not been reviewed, approved, or otherwise endorsed by any of these entities.

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G. Brian Davis is a real estate investor, personal finance writer, and travel addict mildly obsessed with FIRE. He spends nine months of the year in Abu Dhabi, and splits the rest of the year between his hometown of Baltimore and traveling the world.

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