Arrived Homes is touted as an affordable entry point into residential real estate investing. But does it really deliver? Read our Arrived Homes review to find out.
What Is Arrived Homes?
Arrived Homes is a crowdfunding investing platform that allows investors to own fractional shares of income-producing rental properties.
The platform’s real estate offerings are single-family homes, and you’re not limited to investing in one property at a time.
The focus on single-family homes is a relatively new concept to real estate investment platforms.
This allows investors 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 responsibilities for its investors, including:
- Locating properties
- Finding renters
- Negotiating with contractors and sales agents
- Handling maintenance duties
- And more
When Did Arrived Homes Start?
Arrived Homes was co-founded by Ryan Frazier (CEO), Kenny Cason (CTO), and Alejandro Chouza (COO) in 2019, and it launched its services in March 2021.
It’s 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.
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 US, 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.
What Types of Properties Can I Invest in with Arrived Homes?
Arrived Homes focuses solely on single-family homes for its fractional ownership opportunities.
Unlike other rental real estate investing platforms, you won’t find duplexes, townhouses, commercial buildings, or condos on Arrived Homes.
You will find, however, rental homes spanning across the US, including South Carolina and Arkansas, which are regarded as some of the best markets based on Arrived’s criteria.
The residential 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 that also having low crime rates, quick commute, and various amenities.
How Does Arrived Homes Make Money?
Arrived Homes makes money through its fee structure that compensates it for overseeing each rental property it offers.
Basically, it’s your standard crowdfunding real estate investing platform.
We’ll go over Arrived Homes fees a little later on, but for now, we can say that they are more than fair.
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.
The company seeks potential future returns for cash-on-cash returns and long-term property value appreciation.
Once it has identified the most promising rental 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.
Additionally, Arrived Homes seeks homes that have the right mix of prices, square footage, and renovation needs.
The platform 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.
Is There an Arrived Homes Secondary Market?
Arrived Homes does not have a secondary market to sell or trade your shares.
We couldn’t find any news of the company building a secondary market.
So for now, it’s best to assume that you will not be able to get out of your position until further notice.
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 during a sale.
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(s) 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 collect rental income dividends with little to no hassle.
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.
Earn Money from Property Value Appreciation
Since you’re buying shares in the property itself, you also benefit from any property value appreciation.
This helps increase returns when the market appreciates, but it also cuts both ways and reduces returns when the property values fall.
That being said, Arrived does its best to anticipate devaluation so it can exit positions before a home’s value falls to rock bottom.
Arrived Homes Features
- Property management
- Tenant screening
- Commercial grade tools
- Payments (passive income)
- Scale and efficiency
Arrived acts as an investment advisor who handles all the operational responsibilities.
Here’s a snippet from the Arrived Homes website that clearly articulates what you can expect from its team:
“Arrived works with experienced property managers that take care of the day to day management responsibility of leasing, maintenance, and rent collection. We collaborate with our property managers and provide an additional oversight function to maximize rents, make smart asset decisions, and minimize costs.”
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.
Also, your credit doesn’t back the financing, and loans are solely backed by the property value.
So once you invest in a property, all you need to do is sit back, relax, and enjoy your passive rental income.
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.
We appreciate the data-driven vetting approach, as it provides quality insights into a tenant upfront.
Commercial Grade Tools
The real estate investment platform uses high-quality, advanced tools that were previously only available to real estate professionals.
This gives its team an in-depth understanding of the home markets they are evaluating and positions them to make smart acquisitions.
In short, homes and tenants aren’t selected based on hunches, but rather data-rich criteria.
Arrived investors are paid out in dividends every quarter.
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 everything for you.
Like we mentioned above, you also get a bigger cut of a sale if the property in question increases in value.
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 have the potential to lead to better returns.
Arrived Homes Customer Service
Arrived Homes’ customer service is top-notch, and they have an expansive help center to answer all your questions.
In addition to its FAQ and blog posts, customers can reach out to an Arrived representative through the service live chat and phone line: +1 (814) 277 4833.
The company gets extra points for selecting the phone number (+1 (814) ARRIVED).
Phone numbers are becoming less and less common for online platforms, so we’ll give Arrived extra credit for taking the initiative to provide a quality customer support experience.
Is Arrived Homes Legit?
Arrived Homes is a solid company with a strong reputation as a crowdfunding investment platform.
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 rental 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).
Is Arrived Homes Safe?
No investment is ever 100% safe, but Arrived Homes has an extensive vetting process when it evaluates rental properties.
Also, real estate is commonly considered a relatively stable investment that has slowly seen appreciation over time.
Is Arrived Homes Publicly Traded?
While its investment opportunities are available to the public, Arrived Homes is not a publicly traded company.
We’ll keep you posted if this changes in the future.
Is Arrived Homes a REIT?
Arrived Homes is not a real estate investment trust (REIT), but the properties you invest in are under one.
This affords you all the protections, tax advantages, and profit splits that are provided by this investment vehicle.
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 surprisingly accessible.
Arrived Homes Fees
While signing up for the platform is free of charge, there are a few fees you need to pay when investing in an Arrived Homes property.
- Annual Asset Management Fee — 1% fee based on the capital contributions of investors
- Property Management Fee — 8% of rent collected
- One-time Sourcing Fee — Varies from home to home
Given the possible returns, this is a fair and transparent fee model.
The 1% annual management fee is especially reasonable when you stack it up against some of its competitors.
Because these fees are baked into the model, it’s pretty hands-free once you invest in a property.
You won’t need to pull out a checkbook every quarter or navigate a labyrinthian payment portal.
How Much Money Can You Make with Arrived Homes?
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.
Arrived Homes outlines in no uncertain terms that it cannot “predict future returns.”
That being said, the company does provide historical returns to give you an idea of what could be possible.
Historically, there has been a 3.2% to 7.2% annual return rate — not too shabby.
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.
Keep in mind that past history is not an indicator of future results.
Pros and Cons of Arrived Homes
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.
- Open to non-accredited investors, which are often barred from using many of Arrived Homes’ competitors
- $100 minimum investment
- Invest in multiple properties at once
- Offers the potential for a steady stream of passive income
- The housing market is hot and Arrived Homes is capitalizing on it
- Tax benefits from investing in Arrived properties
- The platform carefully vets tenants so you don’t have to
- Only single-family rental homes are available on Arrived
- Lacks a secondary market to liquidate shares
Arrived Homes Reviews from Real Members
Arrived Homes has earned a stellar reputation since its inception, locking in an impressive 4.9 rating on Google Reviews.
Let’s see what reviewers have to say about this real estate investment platform.
In addition to solid reviews on Google, Arrived Homes has an A rating on the BBB website, as well as a 5 out of 5 score from customer reviews.
This is a good sign, as BBB is typically a place where previous clients go to spotlight poor service.
Is Arrived Homes Right for Me?
Arrived Homes could appeal to almost anyone, but it’s likely best suited for investors on a budget or folks who want a hands-off approach to investing in real estate.
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 and effortless approach to investing in real estate.
Some larger crowdfunding 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.
Is Arrived Homes Worth It?
Given its hands-off approach to investing in rental properties, Arrived Homes could be well worth the price of admission.
It offers an easy way to tap into the world of real estate investment at a fair price.
If you’re interested in receiving entirely passive income for rental real estate without lifting a finger, then Arrived Homes may be the place for you.
Few competitors on the market make it this easy to invest in rental homes.