Rich Uncles REIT Reviewed And Compared

rich uncles review

One of the ways in which you can grow your money is to invest in real estate investment trusts (REITs). Many companies operate as REITs, and you will learn more about these other entities in this Rich Uncles review. When deciding to invest in a REIT, be sure to conduct some background research to help ensure you don’t lose your investment.

REITs collect money from investors and in return provide them with ownership interests in real estate. Publicly traded REITs and similar entities raise their money by selling their shares on the stock exchanges. Privately operated trusts must look for and secure individual investors.

Generally speaking, investors make money when paid a portion of the REITs’ taxable income, which comes from rent and lease payments, management fees, and other sources. To understand more about how REITs work, keep reading this Rich Uncles review.

Why It’s Important to Consider REITs

REITs are a convenient and reliable way for individuals to invest and make money in real estate. One advantage of investing in REITs is that the shares are more liquid than when you own a building privately or outright. When properly managed, these trusts also offer a predictable source of income because REITs are expected to distribute 90% of their income to investors.

High-dividend yields, the tangible assets owned by these companies, and low-volatility equity make companies operating as REITs attractive investment options for many investors. We’ll explore more of these factors and considerations throughout this Rich Uncles review.

Types of REITs

When considering investing in any REIT, you need to understand the different types. The most common among these are:

  1. Equity REITs buy, own, and manage income-producing real property. Revenue comes primarily from rent collected rather than property sales or resale.
  2. Mortgage REITs specialize in lending money to real estate owners and operators through mortgages or mortgage-backed securities. Their income comes primarily from the net interest margins they are able to maintain.
  3. Hybrid REITs use a combination of these two strategies. 

Other categorizations sometimes applied to REITs are publicly traded, privately managed, and public non-traded REITs. As you read through this Rich Uncles review, you’ll learn about the some of the best REIT investment paths, providers and options out there. We have reviewed each of them, so that have a sense of what to expect before you invest your hard-earned money.

What Is Rich Uncles?

Rich Uncles is a real estate investment platform that guarantees three public, non-traded REITs. Investors need not be accredited to invest, but since this is a long-term investment, it might not appeal to those who want quick returns or simple exit options.

In the course of our Rich Uncles review, we learned that the company strives to give everyone the chance to participate in REIT investing. Although it began with a minimum requirement of $500, this starting stake has been reduced to $5.

How it Works: Our Rich Uncles Review

According to the company site, promotional materials, and other Rich Uncles reviews, this REIT works mainly by providing a platform for investors to buy shares in its portfolio of commercial properties. Alternatively, an investor can purchase shares in residential real estate via the Student Housing REIT.

Nationally, Rich Uncles primary REIT holdings are in industrial and office properties. Shareholders receive monthly dividend income that is earned from the rent collected. The Student Housing REIT is mainly for properties that target student housing, just as its name suggests.

More on the Rich Uncles National REIT

The National REIT holds commercial properties that meet strict specifications. This model reduces your chances of losing your investment while providing a reliable source of income. More specifically, this REIT is concerned with commercial property located in tertiary, secondary, and primary markets. Criteria for holdings include the principle that properties should be substantially complete to reduce the risk of incomplete buildings. It should also be leased on a triple-net basis, which means that the tenants are responsible for taxes, insurance, and maintenance payments.

Rich Uncles National REITs also ensure that tenants have strong, verified financial statements. These tenants are subject to long-term leases with well-defined rental rate increase increments. The minimum investment in the National REIT, at the time we conducted this Rich Uncles review, is $500.

More on the Student Housing REIT

Our Rich Uncles review and evaluation reminded us that the firm recently introduced its Student Housing REIT to target properties explicitly built for that niche. These properties should be within a mile from NCAA Division 1 universities with more than 15,000 enrolled students. Further, properties targeted should have a minimum bed capacity of 150, occupancy of 90% or greater, and broad geographic diversification.

Investment Costs & Fees

Investing in REITs is attractive for a variety of reasons. These entities are required by law to pass 90% of their earnings to the investors. Knowing this, most of them determine their minimum investment accordingly. There’s no minimum figure defined by law, but you may need to buy shares in blocks of 10 or 100, depending on the investing resource you select.

Many brokerages require their clients to have a minimum of $500 to open an account. Others demand a minimum deposit of $10,000 or so. How much you pay will depend on the specific REIT you decide to invest in. We’ll explore costs further as we proceed with this Rich Uncles review.

How Investment Options Compare

A range of other posted Rich Uncles reviews confirm that it’s one of the most preferred REITs among investors. However, we wanted to explore further how it compares to others in the market. Here are a few other REIT investment options we picked for comparison.

  • Fundrise
  • RealtyMogul.com
  • Origin Investments

Products

Company Logo

Overall Rating

Where To Invest

Rich Uncles

rich uncles logo

4.33 Stars

Fundrise

fundrise logo

4.67 Stars

RealtyMogul.com

realtymogul logo

4.67 Stars

Origin Investments

origin investments logo

4.33 Stars


Rich Uncles

rich uncles logo

Minimum Investment:

Your investment with Rich Uncles can be in the National REIT with a minimum of $500. The minimum investment in the Student Housing REIT is only $5.

Account Fees

Invest Duration

Offering Types

Rich Uncles uses 3% of the money you invest to cover the costs of keeping your account active.

Through our extensive Rich Uncles review, we learned that investing in this company is always for the long haul. The minimum period is seven years, and with any withdrawal of principle, you will lose a portion of your investment. The highest profits occur when a property sells, which might take far longer than you expect.  

Rich Uncles’ two offering types are its National REIT and Student Housing REIT.  

Pros

  • Low fees
  • Ideal for new real estate investors
  • Geographic diversification
  • High-quality tenants
  • No accreditation required to invest
  • Performance-based model
  • Monthly dividends
  • No broker fees payable
  • The focus is on commercial real estate

Cons

  • Low investment liquidity
  • Monthly dividends not guaranteed
  • Lack of investor participation in strategy
  • No third parties overseeing the investments

Fundrise

fundrise logo

Fundrise is a real estate company that operates online exclusively. It focuses on typical, midrange investors who wish to buy into private residential and commercial properties. The company pools together investor resources through an investment platform and doesn’t require them to be accredited.

Fundrise mainly focuses on REITs (once again, for real estate investment trusts) that invest in properties that generate regular income. The company buys properties and manages them and/or holds their mortgages. This company offers a redemption program for investors with highly illiquid shares, along with products called eREITs and eFunds, in which investors’ money can be used to buy land, develop houses, and sell to buyers.

Investors can buy into Fundrise products through supplemental income, starter, long-term growth, or balanced investing plans. The mix of eREITs and eFunds in each plan is determined by the company, and it is also influenced by the specific properties in question.

Minimum Investment:

The minimum investment amount in a Fundrise REIT is $500.

Account Fees

Invest Duration

Offering Types

Fundrise charges annual management and advisory fees amounting to 1% of your investment. There might be other charges applied, as these are always subject to change.

Investments in Fundrise are not publicly traded on the stock exchange. This means that they’re highly illiquid and investors must hold them for at least five years. You may have to pay a fee to exit your investment.

Fundrise has two main offerings:  eREITs and eFunds. They can be accessed through any of four pre-arranged plans.

Pros

  • Low costs
  • 90-day money-back guarantee if you’re not satisfied
  • Easy to sign up
  • Investment information readily available

Cons

  • Lacking in fee transparency, as there are other charges beyond the 1% base
  • Long-term investment plan only
  • Dividends not guaranteed

RealtyMogul.com

realtymogul logo

RealtyMogul.com is a marketplace functioning on an online platform serves investors, borrowers, and sponsors.  As an online platform, the company strives to give borrowers access to debt capital. Sponsors are also linked to equity capital, and investors are given access to investments after due diligence.

Essentially, RealtyMogul acts as a bridge that gives access to joint-venture equity and permanent loans to over 80,000 registered accredited investors. The company offers a frictionless, fast and easy-to-use platform that meets today’s high standards for connecting investors to opportunities that were previously inaccessible. The company also provides investment opportunities to sponsors seeking to raise joint-venture equity. Borrowers in need of flexible debt can find equity and flexible debt options that might be hard to get from traditional sources.

Minimum Investment:

If you wish to invest with RealtyMogul.com, you must be willing to spend a minimum of $1,000 initially.  

Account Fees

Invest Duration

Offering Types

It will cost you approximately 0.30% to 0.50% per year for the management of your account.

The minimum investment period with RealtyMogul is six months, with other terms ranging up to 120 months.

The company offers both debt and equity types of investment. Its model for providing access to borrowers, investors, and sponsors alike allows each diverse stakeholder group access to what they need.

Pros

  • Investment opportunities open to borrowers, sponsors, and investors
  • Diversity in investment options
  • Quick and easy funding
  • More flexible than REITs
  • A high volume of deals
  • Strong participation

Cons

  • Investments highly illiquid
  • Investors must be accredited
  • Geographically restricted to the West Coast of the U.S.
  • High minimum investment required

Origin Investments

origin investments logo

As an established real estate investment company, Origin Investments prides itself in delivering personalized services. The company consistently offers quality investment opportunities… but only to accredited investors. Origin also primarily targets wealthy individuals who can afford a minimum investment of $100,000. Origin Investments works by acquiring, improving, and managing multi-family properties and office complexes. It focuses on commercial deals in metropolitan areas of the largest U.S. states. The company has over $700 million in assets.

Origin relies on technology and crowd-funding strategies to attract investors. This entity has managed to expand its investor base beyond high net-worth contacts but still serves accredited investors only. One strategy employed is to engage in management turnaround situations. This company focuses on properties valued between $10 and $40 million, which is a segment largely under-exploited by pension funds and large institutions. As an investor with Origin, you can invest in several diversified funds across various property types and locations.

Minimum Investment: 

A decision to invest with Origin is the most expensive endeavor we explore in this evaluation. You’ll need a minimum stake of $100,000 to invest with this company.

Account Fees

Invest Duration

Offering Types

You will pay approximately 1.5% annually for the management of your account.  

Investors with Origin can’t liquidate their shares until at least 72 to 79 months after the initial investment.

Origin Investments offers equity and direct ownership options.

Pros

  • Origin is well established in the real estate investment world
  • Transparency and efficiency throughout the offering
  • Diversification
  • No additional capital required beyond initial investment & fees

Cons

  • Highest minimum investment among those reviewed
  • A high number of deals to follow

Conclusion

Growing your money through real estate investment trusts (REITs) is a wise decision. However, it must be accompanied by a lot of due diligence in choosing the company ideal for your specific investment needs. As you’d expect, the company with the lowest minimum investment may not offer the highest returns. With most REITs, it may be tough to liquidate your investment at all, and you will typically be required to hold your investment for a long period before you can convert it to cash without significant fees to do so.

After our Rich Uncles review, we concluded that Rich Uncle REIT is the best among them. It offers the lowest investment minimum amount and is open to all investors. Its offerings extend across both commercial and residential property interests. This company has a performance-based model, and so investors are paid before the company receives its share of the income generated.

Post Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.