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1-Year Minimum Holding Period
Make no mistake: the one-year minimum holding period for property shares is far shorter than the usual length of time investors own real estate. That goes for owning rental properties directly, investing in real estate syndications, and other real estate crowdfunding platforms.
But it still removes liquidity for the first year, unlike other investing options like stocks, bonds, of Concreit.
Limited Property Selection
At any given moment, there are only a handful of new properties available for sale on Ark7’s marketplace.
At the time of this writing, there are four initial offerings on long-term rentals available for non-accredited investors, plus two properties listed on the secondary market. There are seven new share properties listed on Ark7+ for accredited investors, and six properties listed on the secondary market for these investors.
That said, there are many properties that are still incubating in their first-year holding period, and are scheduled to hit the secondary market in the coming months.
No Automation
I’m a huge fan of automation in my savings and investments, where practical. Many real estate crowdfunding platforms, such as Fundrise, Groundfloor, and Streitwise, allow various forms of automated investing. That includes recurring transfers and automatic investments.
Ark7 does not offer this automation, which I understand – you want to be able to pick and choose specific properties based on their financials and the market. But it’s still worth mentioning.
Ark7 Review: How It Compares
The two most direct competitors are Arrived and Lofty, which also offer fractional real estate investing in rental properties.
Both have a longer track record, with more properties on their platforms. Arrived prices shares at $100, and Lofty prices them at $50.
But each comes with a significant drawback compared to Ark7. Arrived does not offer a secondary market for buying and selling shares – you’re stuck with your property shares until Arrived sells the property. Arrived also doesn’t maintain any equity interest in properties; they sell off all of it in the form of shares.
Lofty does offer a secondary market, but when you sell property shares, you get paid in a cryptocurrency. That means you have to go through the laborious process of converting that niche cryptocurrency into a more mainstream crypto coin, and then convert it again to U.S. dollars. Talk about friction.
Technically, you can buy fractional ownership in properties on Roofstock and Fundrise, although both restrict that access to accredited investors.
And, of course, you can buy fractional ownership in apartment complexes and other commercial properties through real estate syndications. The minimum buy-in is dramatically higher: $50–100K if you invest by yourself, or $5K if you invest through a real estate investment club like ours. Bear in mind that real estate syndications also don’t offer any liquidity. But you can typically earn much higher returns, often 15–30% instead of the 5–15% you’re likely to earn on Ark7, Arrived, and Lofty.
Should I Invest in Ark7?
If you like the idea of investing small amounts to buy fractional ownership in individual properties, Ark7 is in many ways the perfect platform.
It offers monthly income and strong liquidity, at least after the first year. It’s open to non-accredited investors, and you can invest with as little as $20. That makes it easy to diversify and spread your money across multiple properties.
But if you’d only consider a real estate investing platform that’s been around for a decade and done hundreds of property deals (like Fundrise), you may not feel comfortable with Ark7’s limited track record.
Personally, I started small with Ark7, but I like the platform and am gradually growing my portfolio there.♦
Does Ark7 appeal to you as a real estate investor? How do you find the range of investment options — enough to build a diversified portfolio?
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