Real estate investing stands as one of the most powerful wealth-building strategies available, allowing property owners to generate steady rental income while benefiting from long-term capital appreciation as markets grow.
However, traditional real estate investment presents significant barriers for many prospective investors. Purchasing, renovating, and managing properties requires substantial capital—whether through debt or equity financing. Additionally, most large-scale investment opportunities remain restricted to accredited investors with higher net worth requirements.
Real estate investment trusts (REITs) have emerged as popular vehicles for investors seeking more liquid exposure to real estate markets. These income-generating tools serve as an excellent introduction to alternative investments. When REITs trade publicly on exchanges, any investor with a brokerage account can buy and sell shares while collecting dividend distributions.
But what happens when you want meaningful exposure to commercial property without knowing where to begin your real estate investment journey?
DiversyFund tackles this challenge directly through their public non-traded REIT, offering a low minimum investment threshold for everyday investors willing to commit their capital for three to five years.
This comprehensive DiversyFund review examines what the platform offers, how it stacks up against competitors, and whether DiversyFund deserves a place in your investment portfolio. Ready to dive in?
About DiversyFund
Craig Cecilio and Alan Lewis founded DiversyFund in 2016, bringing extensive backgrounds in commercial real estate investment and project management to the venture. The company launched its real estate investment trust (REIT) in 2019 and currently oversees five multifamily and student housing developments across California, Texas, and North Carolina.
How DiversyFund Works
DiversyFund operates as an innovative REIT with a unique twist. While offering an REIT to public investors, the company simultaneously develops and manages the properties within that same REIT. This means DiversyFund controls every aspect—from project selection and development strategy to fund management—making it one of the rare vertically integrated platforms accessible to non-accredited investors.
This integrated structure delivers significant advantages: DiversyFund eliminates traditional management fees from your investment. The only charges you’ll encounter are standard project development fees found in any REIT. Since much of DiversyFund’s anticipated profits derive from property sales at the development cycle’s end, the company maintains the same stake in investment success as individual investors.
What properties fill the DiversyFund REIT? As of summer 2020, the company develops five projects—four multifamily apartment complexes and one student housing facility across California, Texas, and North Carolina. The company plans to enhance these properties and sell each within approximately five years.
Importantly, DiversyFund reinvests all property income during this five-year period back into existing properties or new real estate ventures. This means investors won’t receive distributions until properties sell several years down the line.
DiversyFund Services and Features
DiversyFund distinguishes itself by providing public, non-traded REIT access to all investors—not exclusively accredited ones. The fund mirrors closed-end private-equity structures, requiring investors to commit capital for a three-year minimum while the fund acquires, renovates, manages, and eventually sells properties.
The DiversyFund Growth REIT currently consists of multifamily properties (apartment complexes) featuring a minimum of 100 units across North Carolina, Texas, and California. Each property represents a value-add development opportunity, meaning DiversyFund handles all renovation and management responsibilities to drive value growth and achieve target returns upon sale.
Real estate investing through DiversyFund remains straightforward and automated. After establishing your online account, they handle fund management and allocation to various properties based on your capital contribution.
DiversyFund Platform And Tools
DiversyFund’s platform maintains a minimalist design, offering limited functionality until property sales occur and profits distribute. The interface centers around projected return graphs, though you should view these projections with healthy skepticism. The platform also provides access to tax documents and quarterly investment reports.
DiversyFund Performance
Real estate funds typically measure performance using Internal Rate of Return (IRR), which illustrates portfolio growth if you liquidated holdings at any given moment.
DiversyFund’s Growth REIT targets an IRR between 10%-20% for each portfolio property over a 5-year investment horizon.
Your actual returns depend on realized gains when properties sell. Investors receive their principal plus up to 7% profit (when 7% or greater profits materialize) before DiversyFund claims any earnings. Beyond the initial 7% profit, investors capture 65% of additional profits up to 12% annual returns and 50% of profits exceeding that threshold.
Preferred Return
Preferred returns in real estate investing guarantee investors receive payment after property sales before funds claim remaining profits.
DiversyFund provides a 7% preferred return before capturing any remaining profits (when available.)
When profits exist, investors receive a 65% split while DiversyFund takes 35%.
If average annual returns exceed 12%, profit splits shift to an even 50/50 distribution.
Remember that investor payments occur only after property sales, with no portfolio building sales expected before 2023.
DiversyFund Account Requirements
DiversyFund’s accessibility sets it apart with extremely low entry barriers. Any US resident can invest in the company’s REIT with a minimum investment of just $500, reduced from the original $2,500 requirement when the company launched in 2019.
DiversyFund Pricing and Fees
DiversyFund Growth REIT investors pay no asset management fees since the company manages and develops properties internally. However, developer fees may range from 2% to 8%, depending on specific multifamily properties within the portfolio.
How Does DiversyFund Compare to Other Services?
DiversyFund stands apart from other online real estate platforms by eliminating asset management fees while maintaining an accessible initial investment threshold.
Primary Competition
Fundrise investments dominates online real estate investing by offering low investment minimums and diversified investment access. While DiversyFund’s Growth REIT focuses exclusively on multifamily properties, Fundrise portfolios include residential real estate investments. Both platforms offer illiquid non-traded REITs like DiversyFund, but Fundrise also provides more liquid options such as their Interval Fund for investors needing capital access.
DiversyFund’s distinction within real estate crowdfunding comes from its dual role as property manager and developer, significantly reducing investor costs.
Alternative Investment Comparison
Real estate investing demands patience and extended time horizons before investors realize returns.
Investors seeking shorter-term opportunities might consider stock markets, equity crowdfunding, or other alternative investments.
Regardless of your selection, maintaining a diversified portfolio remains crucial so gains in one asset class can offset losses in another. This might include stocks, real estate, and alternative investments.
DiversyFund Key Differentiators
DiversyFund provides cost-effective commercial real estate investment access, specifically targeting multifamily apartment complexes. The $500 minimum investment and elimination of typical 1%+ management fees that burden most REITs and real estate platforms create significant value.
Another crucial differentiator lies in DiversyFund’s business model—the company generates most revenue from property investments themselves. This alignment encourages investors, since DiversyFund maintains equal investment in property success.
Is DiversyFund Trustworthy?
DiversyFund maintains an A+ rating with numerous positive investor reviews, reflecting strong trustworthiness as a real estate investment platform.
However, as a relatively new company operating in complex real estate investment and management sectors, approaching their REIT with appropriate caution makes sense. Positively, the company maintains significant skin in the game alongside individual REIT investors, while founders bring decades of commercial real estate experience.
Most importantly, DiversyFund operates as an SEC-qualified entity. This status requires comprehensive financial and management disclosure plus annual audits. Additionally, DiversyFund contracts independent third-party auditors for annual financial statement reviews to maintain honest, transparent operations.
What Risks Does DiversyFund Present?
Illiquid investments like DiversyFund’s REIT create significant risks around capital access during emergencies. Additional concerns include potential capital loss, real-estate market volatility, and standard real estate investment risks.
Ensure you can manage without your investment capital before committing to the DiversyFund Growth REIT.
Who Should Consider DiversyFund?
Beginning investors seeking education about vertically integrated real estate funds with minimal investment thresholds will appreciate DiversyFund’s market insights. Since DiversyFund handles development and property management, their annual reports deliver valuable information about fund performance and capital management strategies.
Investors preferring more liquid real estate exposure have alternative options, including publicly traded REITs and REIT mutual funds and ETFs.
Final Assessment: DiversyFund
DiversyFund represents a new generation of crowdfunded real estate platforms delivering fresh investment opportunities to non-accredited investors. Most similarly structured funds demand substantially higher initial investments and typically require institutional and accredited investor participation in capital raises.
For investors seeking diversified portfolio growth while exploring real estate investing, DiversyFund may offer excellent opportunities—provided you maintain an existing investment portfolio and retain cash access outside your DiversyFund commitment.
Pros
- Unique access to non-traded REIT for real estate investing
- Low fees and minimum investment
- Nonaccredited investors can invest in alternative assets
- Access for the average investor to earn dividend income
Cons
- New fund means limited investment options
- Hard to access cash if you need it for other investments
- More liquid real estate deals are available elsewhere
