Fractional real estate investing has gained popularity as a way to allow individuals to invest in real estate with smaller amounts of capital. Two platforms that stand out in this space are Arrived and Realbricks. While both platforms provide access to real estate investing, they differ significantly in how they approach property ownership, liquidity, and transparency. This article will explore the key distinctions between Arrived and Realbricks, helping you determine which platform best fits your investment goals.
One of the key distinctions between Arrived and Realbricks is how each platform manages property ownership. Arrived uses debt and mortgages to finance a number of their property acquisitions. While this allows them to purchase more properties with less upfront capital, it also exposes investors to risks associated with fluctuating interest rates and loan obligations. In volatile markets, rising interest rates can negatively affect returns, even though investors aren't personally responsible for the debt. This leverage-based model can increase potential losses during market downturns.
Realbricks, on the other hand, purchases all properties outright, meaning there are no loans or mortgages involved. This debt-free approach protects investors from the effects of rising interest rates and market volatility. By not relying on borrowed capital, Realbricks ensures that investors’ returns are based solely on the performance of the property, without the added burden of loan repayments or interest rate fluctuations. In fact, Realbricks effectively shields investors from rising interest rates, a significant advantage in today’s economic climate. For more on how Realbricks manages this, you can read our detailed article on how Realbricks shields investors from rising interest rates.
This debt-free ownership model gives Realbricks a significant edge in terms of long-term stability and lower risk, especially for investors who want to avoid indirect exposure to market fluctuations caused by rising interest rates.
Liquidity—how easily you can exit an investment—is another crucial factor for real estate investors. Arrived currently lacks a secondary market, meaning investors are typically locked into their investments for five to seven years. The only guaranteed way to exit an investment with Arrived is by waiting for the property to be sold, which could take several years. While Arrived has hinted at introducing a secondary market in the future, there is no clear timeline for when, or if, this feature will become available. Until then, investors must be prepared for a long-term commitment, with limited options for liquidity. Arrived does offer an early redemption option for specific funds (such as the Single Family Residential Fund), allowing investors to request a redemption after six months. However, this process is not guaranteed—requests are subject to approval and may involve fees depending on how long the shares have been held.
On the other hand, Realbricks offers investors far more flexibility with its secondary market. Once a property is fully funded on the primary market, it becomes available for trading in Realbricks' peer-to-peer marketplace (secondary market) after 30 days. This marketplace allows investors to not only buy, but also sell shares freely, placing buy and sell orders, including limit buys and limit sells. Investors also have the option of performing partial or full fills on their orders, providing a much higher level of liquidity. This flexibility makes Realbricks an attractive option for those who may want quicker access to their capital, rather than being locked into a long-term investment. Realbricks has essentially established a system similar to trading stocks, but for real estate. Easy in, easy out.
One of the marketing points that Arrived promotes is the ability for tenants to invest in the properties they live in. While this concept might seem appealing at first glance, it functions more as a marketing tactic than a practical feature for all investors. The reality is that only a small fraction of Arrived’s total investor base consists of tenants actually living in the properties available on the platform. As such, this feature serves more as a headline grabber than a meaningful offering, as it applies to only a tiny subset of the overall investor pool. For the vast majority of investors, the tenant-investor angle is irrelevant, making this more of a marketing tactic than a significant advantage.
On the other hand, Realbricks doesn’t rely on these kinds of marketing tactics. While Realbricks also allows tenants to invest in their properties, the platform doesn’t push this as a primary feature because it recognizes that this option doesn't apply to the vast majority of investors. Instead, Realbricks focuses on more practical tools and benefits, making it a more straightforward and transparent platform without unnecessary gimmicks.
Both Arrived and Realbricks offer relatively low barriers to entry, making them accessible to a broad range of investors. Arrived allows users to start investing with as little as $100, which opens up real estate opportunities to those who may not have large amounts of capital to commit. Similarly, Realbricks offers the same minimum investment amount of $100, allowing for easy access to its debt-free real estate portfolio.
Where Realbricks pulls ahead, however, is in its mobile accessibility. Realbricks provides a well-designed mobile app available on both iOS and Android, making it easier for investors to manage their investments from anywhere. Arrived, in contrast, only offers a mobile app for iOS users, leaving Android users in the dust. This makes Realbricks a more accessible platform for a wider range of users.
Choosing between Arrived and Realbricks can become an easier choice after viewing the table above. Arrived uses debt to acquire properties and lacks a secondary market, meaning investors need to be prepared for a long-term hold of five to seven years.
Realbricks offers a debt-free ownership model, providing greater stability and lower risk. Realbricks also stands out with its secondary market, giving investors more flexibility and liquidity. Combined with a more transparent, no-gimmick approach and broader mobile accessibility, Realbricks offers a more investor-friendly experience.
For those who prioritize stability, transparency, and liquidity, Realbricks clearly emerges as the better platform.
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Disclaimer: Investing in real estate involves risks, including the potential loss of capital. This content is for informational purposes only and is not intended as investment advice. Investors should perform their own research and consult with financial professionals before making investment decisions.
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