EquityMultiple Breaks New Ground in the Real Estate Investing Space

Put Your Money Where a House Is

This Analyst Report was co-authored by KingsCrowd Investment Research Manager Olivia Strobl.

It’s always fun when I come across other companies that share KingsCrowd’s goal of making investing more accessible. Simplifying alternative asset investing — like real estate, startup, collectibles, and art investing — is key to helping people build lasting wealth. That’s why I was eager to cover EquityMultiple, a real estate investing platform.

EquityMultiple was founded in 2015 by Charles Clinton and Marious Sjulsen. Currently, it lets accredited investors access properties valued between $5 million and $40 million. In other words, you won’t see single-family homes or commercial properties worth hundreds of millions. Instead, portfolio properties include multi-family, office, retail, industrial, condominium, and apartment complexes.

In order to diversify real estate investing, EquityMultiple offers individual and pooled investment options as well as a range of different risk profiles for deals. Investors choose from three main kinds of real estate investments: a diversified portfolio of properties, single properties, or notes (more on this last one later). Like in online startup investing, investors can choose from a range of investment vehicles within these options, including equity, preferred equity, and debt. Investment minimums are typically $5,000 or $10,000 depending on the product (notes or direct investments), with fund investing minimums sitting at $20,000.

EquityMultiple generates revenue in a few ways: upfront fees for the use of tech and diligence which are paid upon close of investment, ongoing asset management fees from investors, and one-time incentive fees sourced from profits earned by a developer or investor. Fees vary by product, but for direct investments, annual fees are typically 1% or less. Most equity investments have either a 1% annual asset management fee or a flat annual service fee of $250.

Multiple revenue streams, some transactional and others recurring, is an ideal business model for minimizing risk — cluing us in that EquityMultiple knows what it’s doing.

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