The Ultimate Guide to Fractional Real Estate Investing

Learn how to invest in real estate fractionally with Realbricks. Discover the benefits of debt-free properties, passive income, low minimum investments, and more. Start building wealth with just $100 and explore the innovative platform offering transparency, liquidity, and SEC-regulated security.

Overview of Fractional Real Estate Investing

Fractional Real Estate Investing allows individuals to invest in portions of properties, granting them direct ownership without the need to purchase an entire property. Unlike REITs (Real Estate Investment Trusts), which often don't disclose the specific properties you're investing in, fractional real estate investing offers a personalized and transparent alternative. This approach gives you full control over selecting the properties that make up your portfolio, enabling more informed and tailored investment decisions.

This model also lowers the barrier to entry in real estate by eliminating the need for large amounts of capital and removing the burden of property management. Recently, this investment approach has grown in popularity, and the Realbricks team has worked tirelessly to optimize and elevate it to an unprecedented level. This comprehensive guide will cover everything you need to know about fractional real estate investing, as well as the unique benefits and features offered by the Realbricks platform.

Key Benefits of Fractional Real Estate Investing with Realbricks

Debt-Free Properties: Realbricks acquires properties with cash, ensuring there are no loans or mortgages tied to your investments. This protects investors from rising interest rates and eliminates the burden of fluctuating debt costs. Learn more about how Realbricks shields investors from rising interest rates.

No Landlords: Investors don't need to worry about managing tenants or properties. The Realbricks team handles all property management tasks, leveraging their 100+ years of experience to ensure smooth operations and high-quality service.

Low Minimum Investment: With a minimum investment of just $100, Realbricks makes fractional real estate accessible to everyone. Investors can own up to 9.8% of a property, giving flexibility to invest according to their budget.

Passive Income: Realbricks investors can receive quarterly dividends from rental income, providing a consistent stream of passive income. Investors also get exposure to property appreciation, which can build wealth over time.

Secondary Market: Realbricks offers the first-ever fractional real estate secondary market using USD, making it simple for investors to buy and sell shares with ease. This provides liquidity and a true exit strategy, solving the problem of being locked into long-term investments.

All Transactions in USD: Unlike other fractional investing platforms that use cryptocurrency or tokenization, Realbricks conducts all transactions in USD. This approach ensures a more familiar and accessible experience, similar to stock trading, and provides added stability for investors.

Seamless Bank Connections: Realbricks partners with Plaid, which connects to over 11,000 financial institutions in the U.S., ensuring secure and smooth integration with your bank. This makes it easy for users to fund their investments directly from their bank accounts, simplifying the transaction process. 

Highly Vetted Properties: Each property listed on Realbricks undergoes rigorous vetting, ensuring that it meets high standards for investment. Factors like vacancy rates, rental demand, and economic stability are all carefully considered to help maximize returns.

SEC-Regulated: Realbricks is a fully approved and regulated entity under U.S. securities laws, providing investors with confidence in the security and transparency of their investments. Our platform operates in full compliance with SEC regulations, ensuring accountability at every stage.

Innovative Tech: The Realbricks platform is designed with cutting-edge technology, backed by over 20,000 hours of development. This provides users with a seamless, intuitive experience, from exploring properties to managing portfolios.

Comprehensive Support: Realbricks offers robust customer support through multiple channels, including live chat, AI assistance, and personalized 1-on-1 meetings. Our commitment to fast response times ensures investors always have the help they need.

Mobile Access: Realbricks is accessible via mobile apps on iOS and Android, making it easy for investors to manage their portfolio anytime, anywhere. The app provides all the functionality of the desktop platform in a convenient, mobile-friendly format.

How Realbricks Vets Investment Properties

At Realbricks, our experienced team follows a rigorous property vetting process to ensure we offer only the most promising real estate investments. We evaluate each property based on key factors that provide strong potential for returns and long-term stability. Our selection criteria include:

  • Low vacancy rates ensuring consistent occupancy.
  • Potential for appreciation in property value over time.
  • Strong rental demand backed by local market dynamics.
  • Growing economy with a diversified industry base.
  • Strong historical performance of property values.
  • A steady income stream from projected rental yields.
  • Economic stability over time, ensuring minimal market fluctuations.
  • High tenant demand for both rental and ownership opportunities.
  • Favorable economic indicators such as low unemployment and job growth.

For a more in-depth look at our property selection process, check out our detailed article: Why Omaha, Nebraska is a Prime Market.

Why omaha, NE is Primed for Growth

Omaha was chosen as the launch market for Realbricks due to its impressive real estate fundamentals and economic growth. Here’s why:

  • Median Home Price: $278,352, with a steady year-over-year increase of approximately 5.3%.
  • Median Rent: Around $1,500, ensuring attractive rental yields for investors.
  • Low Unemployment Rate: Approximately 3%, indicating a healthy job market.
  • Stable Economy: Driven by key industries like finance, healthcare, and technology, providing long-term economic resilience.
  • Quick Property Sales: Homes sell within an average of 12 days, reflecting strong market demand.
  • Growing Younger Population: With an average age of 35, Omaha’s population is younger than the state average, signaling future growth potential.
  • High Occupancy Rates: Over 95%, ensuring a stable and dependable rental market.
  • Steady Home Appreciation Rates: Annual appreciation between 4.5% and 6.5% since 2009, with single-family homes seeing an 11% rise from 2011 to 2014.
  • Rising Median Household Income: Omaha’s median household income has consistently increased over the past 50 years, supporting overall economic growth and real estate demand.

Looking Ahead:

Realbricks is expanding beyond Omaha! Soon, we’ll be introducing new locations along with additional property types, including short-term and mid-term rentals, commercial real estate, land, and farms. These new offerings will provide even more opportunities for investors to diversify their portfolios and access a wider range of real estate markets.

Investment Process

Step-by-Step

1. Sign Up
Getting started with Realbricks takes just 5 minutes. Sign up via our website or mobile app, available on iOS and Android, and secure your account with our robust PIN verification system. The sign-up process is designed to be fast, secure, and seamless. Realbricks caters to both accredited and non-accredited investors, ensuring that everyone has an opportunity to invest. After filling out basic details, you’ll go through our secure identity verification process to confirm your information, keeping your data safe and fully compliant with U.S. regulations.

  • Using a mobile device? The Realbricks app allows you to browse properties, track your investments, and receive notifications about new listings or updates—making real estate investing accessible anywhere, anytime. Download the app for iOS or Android now to get started.

For additional guidance, check out our detailed how-to sign-up guide.

2. Browse Properties
Once your account is verified, browse our carefully vetted property listings. Start with the six available properties in Omaha, with more coming soon. Each property is thoroughly evaluated based on factors like low vacancy rates, strong rental demand, and stable economic conditions. As Realbricks continues to grow, expect to see a wider variety of property types, including short-term and mid-term rentals, commercial real estate, land, and farms, in new locations across the U.S.

3. How to Make a Purchase
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hasing fractional shares in a property is simple and user-friendly. Browse available listings, choose the property that matches your investment strategy, and complete your transaction. With a minimum investment of just $100, you can enter the real estate market without large upfront costs. Your can then track your investments within your portfolio upon purchase.

Need help? Watch our quick video tutorial for a step-by-step guide on how to make your first purchase.

Earning Dividends & Share Appreciation

Realbricks offers multiple ways to generate income from your investments:

  • Rental Income Distributions: Receive quarterly dividends from the rental income generated by your property shares.
  • Share Value Growth: As property values appreciate over time, so does the value of your investment, offering you the potential for capital growth in addition to rental income.

4. Selling Shares and the Secondary Market

Once a property is fully funded, 30 days later it moves to the secondary market, where you can sell your shares. The secondary market provides an easy and efficient exit strategy, allowing you to liquidate your investment faster than traditional real estate sales. The Realbricks secondary market is designed to offer more flexibility, enabling you to buy and sell shares with ease as market conditions change.

The Realbricks Tech and Regulation

Development Overview
Realbricks has dedicated over 20,000 hours to the development of its platform and mobile app, with a clear focus on scalability, security, and delivering a seamless user experience. This intensive development effort ensures that both novice and experienced investors can manage their investments with ease and confidence.

Mobile App (iOS and Android)
The Realbricks mobile app, available on both iOS and Android, allows users to track their investments in real-time and provides valuable property insights at their fingertips. Effortless transactions and a user-friendly interface make investing in real estate as stock trading apps.

Security Features
At Realbricks, security is a top priority. The platform employs robust encryption protocols to protect all financial transactions, including multi-factor authentication (MFA) for account security and SSL encryption for data transmission. Regular security audits are conducted to ensure the system’s defenses remain strong, along with strict data privacy measures that align with industry best practices.

Regulation Compliance
Realbricks operates under the strict guidelines of the SEC, ensuring legal compliance and transparency for all investors. Achieving this regulation wasn’t easy; it took approximately two years to secure approval, a testament to Realbricks' commitment to providing a compliant and secure investment platform.

Marketplace/Secondary Market
After obtaining SEC approval, Realbricks went further than its competitors, by developing the first-ever secondary market in fractional real estate. This peer-to-peer marketplace allows investors to buy and sell shares seamlessly, solving a common issue in the real estate world—limited exit strategies. The Realbricks secondary market offers liquidity and flexibility, akin to trading stocks, revolutionizing the fractional real estate space.

Liquidity on Realbricks

The Realbricks secondary market is the first of its kind, allowing investors to buy and sell shares of real estate as easily as trading stocks. By empowering our investors to take control of their liquidity options, they can enter and exit the real estate market with ease. 

Buy and Sell Order Types on the Secondary Market
When listing shares for sale, investors have access to various options to best meet their needs:

  • Partial Orders: Sell a portion of your shares while retaining some ownership, offering flexibility without fully exiting your investment.
  • Good for Day Orders: Perfect for those seeking quick liquidity, these orders remain active throughout the trading day and expire if not fulfilled by day’s end.
  • Good Till Fill Orders: These remain open until your shares are fully sold, providing assurance that your order will be fulfilled, whether quickly or over time.
  • Limit Orders: Set the price at which you want to sell your shares, ensuring you maintain control over the terms of your sale, even in fluctuating market conditions.

With these options, Realbricks allows investors to strategically manage their portfolios, offering an accessible way to benefit from real estate appreciation while maintaining flexibility in how they choose to enter or exit investments.

Customer Support at Realbricks

At Realbricks, we provide responsive and efficient customer support, ensuring every investor feels valued and confident throughout their investment journey.

Responsive Customer Service

Our customer support team is dedicated to providing quick and effective solutions for any inquiries or concerns you may have. Whether you need help navigating the platform, have questions about your investments, or require assistance with transactions, our team is here to help. We understand that real estate investing can feel complex at times, so we make it our priority to ensure that every user feels supported every step of the way. Our commitment to ensuring customer satisfaction is at the heart of our service, with fast response times and proactive issue resolution.

Interactive Chatbot

To make your experience even smoother, Realbricks offers an interactive chatbot available both on our website and mobile app. This chatbot is designed to provide real-time assistance, answering common questions, guiding users through various features of the platform, and offering instant help without the need to wait for a live agent. Whether you're exploring properties, managing your portfolio, or looking for more information, our chatbot is there to assist. Should you need more personalized support, the chatbot can seamlessly transfer you to a live agent for more in-depth assistance.

1-on-1 Meetings

Realbricks offers scheduled 1-on-1 meetings to connect investors with our expert team. These meetings are designed to address specific concerns, whether it’s help with understanding investment strategies, navigating the platform, or any other detailed inquiries. Our team is ready to provide tailored assistance and support to ensure your experience with Realbricks is as smooth and beneficial as possible.

Commitment to Satisfaction

At Realbricks, we don’t just aim for satisfaction—we strive to build long-term relationships with our investors. We take a proactive approach to customer support, regularly checking in with users and addressing any potential issues before they become larger concerns. Whether you're a first-time investor or a seasoned real estate professional, our team is dedicated to ensuring your satisfaction and helping you make the most of your investment journey.

FAQ’s

What is Realbricks?

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Realbricks is an investment platform that enables fractional ownership of real estate properties, allowing users to invest in real estate with as little as $10 a share. Minimum investment starts at $100.

How does investing on Realbricks work?

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Users can buy fractional shares in properties gaining exposure to property appreciation, earn passive income from rental dividends, and sell their shares on a secondary market provided by Realbricks.

How can I get more information?

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For more detailed information, visit our learn page or contact our support team through the website or application. Users may reach out to support@realbricks.com for any inquiries.

Who can invest with Realbricks?

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Realbricks is open to all U.S. residents (18+) who pass the KYC/AML (Know Your Customer/Anti-Money Laundering) checks.

Is my investment secure?

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Investments are managed on a secure platform compliant with SEC and FINRA regulations, ensuring safety and legality in all transactions.

How do I start investing?

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Create an account, complete the identity verification, connect your bank, and you can begin investing immediately after funding your account.

Can I sell my shares anytime?

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When a property is fully funded on the primary market, 30 days later it is transferred to the secondary market where you can list your shares for sale, similar to trading stocks. However, please note that a sale is dependent on another investor purchasing your shares. While you can list your shares at any time, the transaction will be completed once the sell order is filled by other investors looking to buy.

What types of properties are available for investment?

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Currently, Realbricks offers investment opportunities exclusively in long-term rental single-family homes. We are planning to expand our portfolio to include a broader range of property types, such as short-term rentals, vacation rentals, and multifamily units, in the near future.

How often will I receive dividends?

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Dividends from rental income are typically distributed quarterly, but the timing and occurrence of these payments are at the discretion of Realbricks. This allows us to adapt to the financial performance and operational needs of each property.

What are the fees associated with investing?

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Realbricks charges minimal fees for transactions on the platform, detailed in the user agreement and fee schedule. To learn more, please visit this article.

Where are funds being held during the primary market/initial offerings?

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Any shares purchased on the primary market are initially held in the north capital escrow account. This is a non-interest bearing account. Shares will only be distributed once the property has been fully funded in the primary market. At that point you will be eligible for dividends.

What is the expected ROI?

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We can provide a range for estimated annual returns, combining dividends and property appreciation (e.g., 10-12%).

How are dividends calculated, and can they be prorated?

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Dividends are calculated based on the rental income generated by the property, distributed proportionally to the number of shares an investor owns. Dividends can be prorated, meaning investors receive payouts based on how long they’ve held their shares within the income period.

Can Reg CF investors receive discounts on shares?

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No, REG CF investors cannot receive discounts on shares due to SEC regulations, which prohibit offering discounted shares to any group of investors.

Why is the maximum ownership capped at 9.8%?

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The maximum ownership is capped at 9.8% to prevent any single investor from gaining majority control and to protect other investors. This limit helps ensure that no one individual can influence decisions disproportionately, safeguarding the interests of all investors involved.

Investment Strategy & Risks

Real estate investing can be daunting, especially when it comes to choosing the right properties to invest in. With Realbricks, this process is made much easier by leveraging the expertise of a highly experienced team of real estate professionals who carefully vet each property for you. The team, with over 100 years of combined experience, and collectively engaging in over 1 billion of real estate transactions, selects properties based on key factors like low vacancy rates, strong rental demand, and stable economic conditions, ensuring that you have a strong foundation for your investment strategy.

While Realbricks handles much of the heavy lifting in property selection, it’s important to remember that all investments carry some level of risk. Real estate markets can be volatile, and factors like market downturns, changes in rental demand, or property-specific issues can impact returns. While this is true and should be considered whenever investing, it is also true that real estate has historically proven to be resilient, and even during uncertain times.

One key benefit of real estate is its ability to act as a hedge against inflation. As prices rise, so too does the value of real estate, making it a critical asset in long-term portfolios. This is one of the reasons why high-net-worth individuals consistently invest in real estate—it provides a tangible asset that tends to appreciate over time and offers protection against inflationary pressures. With Realbricks, you can tap into this same strategy, benefiting from real estate’s role in wealth-building without needing millions of dollars in capital.

Tax Considerations

Investing in real estate through Realbricks comes with several tax considerations that can impact your overall returns. We think we have simplified the tax reporting process for investors, by providing automatically generated compliance documentation while maximizing your benefits.

Simplified Tax Reporting

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Realbricks streamlines the tax reporting process by providing investors with clear and concise tax documents. Instead of navigating complex K-1 forms annually, we offer a straightforward 1099-DIV form after each tax year, which makes it easier to report your income during tax season.

Key Tax Benefits

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One advantage to real estate investing is the potential to leverage possible tax benefits, which can positively impact your returns. For instance, claiming depreciation on your taxes reduces your taxable income over time as properties age. While depreciation is often applied to the property itself, the benefits can extend to fractional real estate investments, helping you minimize taxable income from your rental revenue.

Rental Income

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Any rental income you earn from your Realbricks investments is typically considered ordinary income and must be reported on your personal income tax return. Rental income earned from your investment will be outlined on an annual 1099 form, making it easier for you to file your taxes. Keep in mind that rental income is subject to federal, state, and local taxes, depending on your location and you are responsible for any and all taxes deriving from income generated by rent and/or the sale of an investment property.

Capital Gains Tax

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If you successfully sell your shares on Realbricks' secondary market, you may be subject to capital gains tax on the amount you profited from the sale. The amount of tax owed will depend on how long you held the shares. If you held the shares for more than a year, you may qualify for the lower long-term capital gains rate, which can be beneficial for investors looking to optimize their tax liabilities. For shares held for less than a year, short-term capital gains will apply, typically taxed at ordinary income rates.

No K-1 Forms

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Unlike traditional real estate investments such as a REIT that require you to file a K-1 form, Realbricks simplifies the process by reporting the rental income as dividends. Classifying the income as dividend income means you won't need to file additional complex tax forms at the end of the year for your taxes, and the entire process remains streamlined and efficient.

Deductions and Appreciation

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While real estate investment can generate substantial returns through rental income, investors can also benefit from tax deductions related to ongoing expenses, including property maintenance and other costs associated with property ownership. Additionally, as property values appreciate, your overall investment can grow, potentially leading to gains when selling shares in the secondary market. However, these gains may be subject to capital gains tax, so it's important to keep this in mind when planning your exit strategy.

Consult a Tax Professional

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No content provided herein should be considered to be investment or tax advice. Tax laws are complex and constantly changing. While Realbricks offers simplified tax reporting, we recommend that all investors consult with a qualified tax professional to ensure compliance and to optimize the tax benefits associated with their investments.

We're on a Mission to Democratize Real Estate Investing for All

Realbricks offers a unique opportunity to tap into the world of real estate investing through fractional ownership, providing a pathway to build wealth without the traditional barriers associated with property investments. With an experienced team that carefully vets each property, a simple investment process, and robust support along the way, Realbricks makes real estate investing more accessible than ever.

Whether you're seeking passive income through rental dividends, capital appreciation from property value growth, or a way to diversify your investment portfolio, Realbricks gives you the tools and resources to pursue your financial goals. Our innovative platform, combined with the stability of real estate as an asset class, creates an opportunity for investors to experience the benefits of property ownership without the high capital requirements or property management burdens.

Now is the perfect time to start your journey toward building wealth through real estate. Create an account today, explore our carefully vetted properties, and begin investing with as little as $100. The world of real estate is at your fingertips—take the first step with Realbricks.

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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.