Our Arrived Homes review will tell you everything you need to know about this real estate investment platform. Keep reading to find out whether it’s worth your time and money.
Arrived Homes is a departure from the norm with real estate investing platforms.
It allows you to invest in real estate without having to manage any rental real estate.
Users can diversify portfolios, earn passive income, and escape the responsibilities of property management that landlords assume.
Anyone investing in real estate can immediately collect property dividends with a small minimum investment,
If you’re seeking an all-in-one real estate investing solution, our Arrived Homes review will tell you whether this platform is worth a second look.
Arrived Homes Review: Overview
The Arrived Homes platform was established in 2019 and is based in Seattle, Washington.
The platform was created to provide income-producing rental properties to interested investors.
The platform’s real estate offerings are single-family homes.
This is pretty novel because single-family homes are a relatively new concept to crowdfunded real estate investing.
This provides investors with the chance to collect net rental income from multiple real estate properties without having to be too hands-on in the acquisition and management process.
Arrived Homes also handles a lot of the operational responsibility for its investors, including:
- Locating properties
- Finding renters
- Negotiating with contractors and sale agents
- Handling maintenance duties
- And more
You can buy shares, starting with a very low investment minimum of $100.
The residential real estate platform focuses on the targeted acquisition of rental properties and efficient property management.
Background on Arrived Homes
The real estate investing platform was co-founded by Ryan Frazier (CEO), Kenny Cason (CTO), and Alejandro Chouza (COO).
Arrived Homes is a startup that recently raised over $37 million in seed funding, with $10 million in equity financing and the remaining $27 million in financing debt
One of the primary investors in the real estate investing platform is Amazon founder Jeff Bezos.
Other key investors include Uber CEO Dara Khosrowshahi and Salesforce founder Marc Benioff.
How Does Arrived Homes Work?
Arrived Homes makes it easy to invest in real estate because it does most of the work for you, selecting various properties in the most lucrative markets nationwide and offering the best possible long-term returns.
The company seeks potential future returns for cash-on-cash returns and long-term property value appreciation.
Once it has identified the most promising real estate investments, the platform uses a streamlined operating plan to reduce costs through improved process efficiency and economies of scale.
Because of this streamlined plan, it can maximize profits that investors can potentially make on the Arrived platform.
This platform allows you the chance to make consistent passive income and benefit from property appreciation as the part-owner of a property.
What Types of Properties Can I Invest in with Arrived Homes?
The company focuses on rental properties when making property acquisitions, particularly single-family homes.
Unlike other real estate investing platforms, you won’t find duplexes, townhouses, commercial buildings, or condos on Arrived Homes.
You will find, however, rental homes across the U.S., including South Carolina and Arkansas, regarded as the best markets based on its criteria.
The real estate investment platform evaluates markets based on sustained economic development, job growth, and affordability to determine their potential.
It narrows down the top neighborhoods within these markets, seeking homes located near top schools while also having low crime rates, quick commute, and various amenities.
Additionally, Arrived Homes seeks homes that have the right mix of prices, square footage, and the amount of renovation completed.
Arrived Homes also sources deals to find hidden gems, purchasing homes at lower prices to provide better rental income opportunities for investors.
It then makes a cash offer for the property and focuses on renovations that will net investors the best return, both for property appreciation value and rental income.
Typically, homes are located within subdivisions and have an average cost of $250,000.
Each home is held in its own Legal Liability Company (LLC), allowing investors to buy shares.
The interests, meanwhile, are calculated as a percentage of the LLC that you own.
You do not have any personal liability within the home, as you are not required to sign when a property acquisition is made.
How Can I Earn Passive Income with Arrived Homes?
When you invest in residential real estate, you start earning passive income from future rental payments and you earn your share of property value appreciation..
Rental payments are made quarterly and do not require any waiting periods.
You get your money instantly and can transfer it to your bank account.
The Arrived Homes website allows you to track your investment on the summary page.
Arrived Homes will work with tenants and property managers, handle maintenance concerns and keep track of yearly tax returns so you can start collecting rental income dividends as soon as possible.
Each of the residential properties that Arrived Homes features has a unique anticipated holding period.
However, the typical timeline ranges from five to seven years.
Throughout the holding period, the intent is to provide free cash flow, via dividend payments, to investors.
The decision to sell a property depends on value appreciation or depreciation and current/projected economic conditions that may trigger negative cash flow or affect the sales price.
Once a property is sold, investors earn their share of property value appreciation. Since the properties have 55%-65% financing, the equity returns from the property appreciation are levered.
So for example if a property appreciates 5% a year and the property has 50% financing, your return on investment from the property appreciation is actually an additional 10%.
Because Arrived Homes is a startup with a limited track record, it’s hard to say how much money you should expect from your real estate investments.
During the second quarter of 2021, property dividends were between 13 and 16 cents per share, translating to annual returns of up to 6.42% each year for real estate investors.
It’s important to remember, though, that past performance doesn’t dictate future outcomes, which is true for any type of investment.
Regardless, the combination of passive income with property appreciation makes real estate a coveted alternative asset class.
Is Arrived Homes Legit?
Arrived Homes is a Legal Liability Company (LLC) that is entirely legitimate and has a good reputation among its investors.
The company has been accredited by the Better Business Bureau as of June 2021 and has an A rating so far.
Backed by Jeff Bezos and other notable co-investors, Arrived Homes is the first company to offer direct access to single-family homes online.
The company also has many safety measures in place to secure real estate investments.
Arrived Homes maintains a cash reserve for each single-family home, usually ranging from 2 to 4% of the property value.
If there is a negative cash flow that exceeds its budget and cash reserve, the company will take out a short-term loan from its corporate entity to the home.
This loan will then be paid back with rental income in the foreseeable future.
All of their activities involving securities are conducted through a registered broker-dealer, Dalmore Group LLC, a member of the Financial Industry Regulatory Authority (FINRA).
What Does Arrived Homes Offer Investors?
Arrived Homes has a range of features that draws investors to the platform who are looking for an effortless entry point into the world of real estate, including:
- Property Management
- Tenant Screening
- Data-Driven Decision Making
- Commercial Grade Tools
- Accessible to Non-Accredited Investors
- Passive Income
- Earn money from property value appreciation
- Scale and Efficiency
Keep reading our Arrived homes review to find out more.
Arrived acts as an investment advisor who handles all of the operational responsibility.
The company scouts the properties for you and is constantly finding tenants.
You don’t have to worry about operating costs or landlord-like responsibilities.
And you bear no personal liability, protecting you from potential lawsuits.
Your credit doesn’t back the financing, and loans are solely backed by the property value.
Finding tenants who will pay on time and stay at the rental property for an extended period is paramount for Arrived.
The company uses a proprietary process to vet tenants using internal professional-grade tools and third-party tools.
Once they have analyzed several data points, Arrived will determine whether the renter in question is the right fit for the investment property.
Data-Driven Decision Making
Arrived Homes leverages the data and technology to make better decisions when vetting and acquiring rental real estate, seeking the best potential for investors to make a solid net rental income.
Commercial Grade Tools
The real estate investment platform uses high-quality, advanced tools that were previously only available to real estate professionals.
Accessible to Non-Accredited Investors
The Arrived Homes platform is accessible to all investors.
You don’t have to be an accredited investor to use the service.
As long as you’re older than 18 and live in the U.S., you can start investing in single-family homes and start earning passive income.
Plus, you don’t need to submit any information to view Arrived properties.
As an investor, you receive rental payments every three months.
Payments do not fluctuate monthly, and the income you get is entirely passive because you’re not involved in the behind-the-scenes work.
Arrived takes care of that for you.
The real estate investment platform uses high-quality, advanced tools that were previously only available to real estate professionals.
Earn money from property value appreciation
Since investors are buying shares in the property itself, investors also participate in any property value appreciation. That portion of the returns are captured when the property is sold or the investor sell their shares.
Since properties are purchased with financing debt, the changes in property value are magnified and accelerated. That obviously helps increase returns when the market appreciates, but it also cuts both ways and reduces returns when the property values fall.
Since property values have tended to appreciate over time, it is important to think of real estate as a long term investment of a few years. That way you are not affected by the downmarket cycles when property values fall.
Scale and Efficiency
Arrived Homes focuses on bringing scale and efficient operations to try and maximize the returns for rental homes.
The company negotiates better rates with contractors and sales agents while buying bulk maintenance services to lower costs.
As a result, its scaled operations lead to better returns when investing in real estate.
What Is the Minimum Investment for Arrived Homes?
Arrived aims to make rental property investment accessible for all, and the minimum investment facilitates this goal.
Although the average investment is $2,200, the minimum investment for properties is $100.
You can also invest through organizations alongside other investors or through self-directed retirement accounts.
According to the Arrived website, you can buy property shares in as little as four minutes.
First, you browse the available Arrived properties.
You then add your property shares to your cart, perform an eSign, and checkout to finalize the acquisition.
From there, the Arrived team handles all maintenance aspects and works on managing properties while you cash in on your Arrived investments, earning passive income along the way.
Thanks to the minimum initial investment, Arrived Homes is essentially accessible to everyone who can afford it.
How Much Does Arrived Homes Cost?
Arrived Homes Fees
As you start investing in Arrived properties and begin your quest towards building a real estate portfolio, you need to pay a few fees along the way.
First, there is a management fee yearly to Arrived Homes of 1% of equity per year. The fee is not on the full value of the home.
Arrived Homes does not collect income directly from property management.
Finally, you must pay a one-time sourcing fee which covers the costs of acquiring and transforming the real estate into a fractionalized investment.
This fee is already baked into the amount of money that’s raised for each property.
The fee varies depending on the property and is included in the share price.
On the “Offering Details” section of the Arrived website’s investment page, you will find the sourcing fee for the rental properties listed.
What Types of Properties are Available from Arrived Homes?
As mentioned, you won’t find duplexes, condos, or commercial buildings here if you’re looking to invest in real estate.
Instead, you will find a wide variety of single-family homes on the website, with property values and other pertinent information listed.
Multiple properties listed on the website potentially offer strong cash flow and can diversify your portfolio with a long-term asset class.
If at any point you wish to sell your shares before Arrived Homes sells the property, you can shift them via the secondary market that Arrived offers.
However, you aren’t guaranteed any liquidity on the secondary market.
And there isn’t a guaranteed minimum amount you’d receive from selling shares on the secondary market.
The hold time on each property is between five and seven years — though this is not guaranteed.
Properties cannot be sold outside of the holding period pending market conditions.
If you wish to exit an investment, you need to contact the company’s support team, who will then strive to match exit interest from potential buyers.
Transfer fees will be applied.
Here is just one example of a property previously available with Arrived Homes.
Arrived Homes Pros and Cons
We found a lot to like during our Arrived Homes review — though, there are a few drawbacks.
Follow along with our pros and cons lists for a full breakdown.
Arrived Homes Pros
Accessibility – The service is open to use by non-accredited investors, which are barred from investing on many real estate crowd-funded platforms.
Minimum Investment – The minimum initial investment is an attractive one for potential investors at $100.
Passive Income – The service provides a stream of passive income by allowing investors to collect a large percentage of rent payments.
Participate in property value increases – As the housing market booms, Arrived allows anybody to participate in that upside.
Asset Diversification – By investing in single-family homes, you widen your investment portfolio with a promising asset class.
Tax Benefits – you can receive tax benefits from investing in Arrived properties and lower your risk profile with real estate assets.
Screening – The platform carefully vets tenants so you don’t have to.
Arrived Homes Cons
Limited Properties are Available – Only single-family rental homes are available on Arrived, so you will have to go elsewhere if you want to invest in different types of real estate.
Limited Track Record – Though Arrived Homes is a well-reputed company, it understandably has a limited track record given they’ve only been operating since 2019.
Liquidation – There is no predetermined liquidation event
Arrived Homes Customer Reviews
If you want to hear what others have to say about this real estate crowdfunding platform, check out these Arrived Homes reviews.
Is Arrived Homes Right for Me?
Because of its emphasis on accessibility, Arrived Homes can be a great service for unaccredited investors to get into real estate for a fairly affordable price.
One of the major draws here is Arrived Homes’ $100 minimum investment.
Couple this with the fact that the service provides property management, and you have a cost-effective hands-free approach to investing in real estate.
Some of the larger crowd-funding real estate investing platforms have minimum investments as high as $10,000, so Arrived Homes could be great if you’re looking to get in for a mere $100.
Arrived Homes Review: Final Thoughts
Arrived Homes allows you to tap into the real estate market and make passive income at the same time thanks to its management approach and minimum investment.
You don’t need to be an accredited investor and can make dividends and receive payment through property value appreciation or rental payments.
If you’re interested in receiving entirely passive income for rental real estate without having to bear much responsibility, then Arrived Homes may be the place for you.
- URGENT BUY: 4 Hypergrowth Cryptos for 2021: Urgent video just released detailing a rare setup in the crypto markets that could send four cryptos soaring
- Motley Fool Issues: Rare "All In" Buy Alert! All In Stock Buy Signal Has Beaten The Market By 6X
- 25-Year-Old Prodigy Is America’s #1 Stock Picker: Brand-New Pick, Ticker Symbol and All -- FOR FREE
- The Smartest Way to Invest $500 Right Now: It doesn’t matter if you have $500 in savings or $5 million. See what one of America's richest men says you need to do right now.