A 3M global distribution center in DeKalb, IL, owned by Modiv.
It doesn’t matter if you’re a seasoned investor or just starting to build your portfolio, real estate investing may help with diversification and cash flow generation. It’s also a solid option to hedge against volatility because the real estate market doesn’t typically correlate with stocks or bonds.
Despite the many potential benefits of real estate investing, it’s notorious for high barriers of entry. Real estate investing used to be reserved for only investors with enough time and resources on their hands to finance, rent out and manage a property. This can be time-consuming and also incredibly risky for inexperienced investors. A simplified, less-costly option may be to go the real estate investment trust (REIT) route.
What is a REIT?
A REIT is a company that owns, operates and manages a variety of investment properties and is required to distribute 90% of its taxable income to shareholders. REITs allow individuals to invest in commercial real estate assets in a manner similar to what they are used to with other investments, like purchasing individual company shares or by participating in mutual or exchange traded funds.
The simplest way to think of a REIT is that it is similar to a mutual fund – money is pooled, invested in a variety of assets (properties) and investors receive dividend distributions.
While some crowdfunding real estate platforms offer direct ownership in individual properties, others are structured as a REIT with a portfolio of assets.
Real estate crowdfunding platforms are ideal for investors looking to invest directly and benefit from the many potential perks of real estate — without the hassles of researching, buying and maintaining an investment property or paying fees to a potentially high-commission middleman.
While many real estate platforms – including crowdfunding – are notorious for high fees and low liquidity, one firm has been able to eliminate management and advisory fees while becoming the first real estate crowdfunding platform to be completely investor-owned.
How Modiv Stands Out as the First Entirely Investor-Owned Real Estate Crowdfunding Platform
Through a crowdfunded non-listed REIT, Modiv offers access to real estate and technology related investments designed to produce income, diversification and long-term appreciation. However, Modiv isn’t your typical real estate crowdfunding platform. Instead of charging high management fees, Modiv puts investors first.
Modiv is one of the largest public non-listed real estate investment funds to be raised via crowdfunding and the first real estate crowdfunding platform to be entirely investor-owned. This means that when you invest in Modiv, you own the real estate and the crowdfunding technology platform.
Although there are some expenses charged to investors that are related to operating a public company, Modiv charges no management fees. Instead, it prioritizes maximizing shareholder value over the long run.
How to Invest in Real Estate in Modiv
Investors buy shares and then receive cash distributions from the rental income these properties generate. Unlike some REITs that pay out dividends quarterly, Modiv pays investors on a monthly basis.
Modiv’s portfolio consists of different kinds of commercial properties including industrial, office and retail — optimizing investor coverage and adding diversification. The REIT maintains an expert-managed portfolio of commercial properties.
Modiv is especially helpful for retirement investing goals, because it features zero custodial fees on a self-directed IRA (SDIRA) with its partner, Forge Trust.
In August 2021, Modiv’s Reg A+ registration became effective — opening the doors for both accredited and nonaccredited investors alike. This means that investing in Modiv is now open to the general public, and you can get your share of commercial real estate for as little as $1,000.
Modiv’s unique structure and operating allows investors to benefit from its internal management, a board of directors with substantial public company real estate experience, the elimination of all external advisory fees and a direct-to-investor business model. Additionally, Modiv is also relaunching its Automatic Investment Program (AIP), which will allow investors to set up automatic monthly investments as low as $100 per month.
As with any investment, investing in a REIT or Modiv is speculative and can involve substantial risks, including illiquidity and complete loss of invested capital. You should always do your own due diligence and consult a financial advisor or tax professional if you have questions.
Learn more about investing in Modiv here.
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