Updated February 14, 2024

Arrived Homes Review

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You can now co-own rental properties with just $100, thanks to Arrived. But should you do so? Read on.

5-point scale (the higher, the better)

Pros and Cons

  • $100 minimum
  • Earn monthly rental income
  • Invest in individual homes
  • Illiquid investment
  • No dividend reinvesting yet

Bottom Line

Real estate investment platform for rental properties with only $100 as minimum

Rental properties are the best source of passive income. The value of the property increases over time, and you earn cash from rent regularly.

However, owning one is often impossible for an average person. For starters, it costs a lot of money upfront.

At Arrived, you can be a landlord sans the stress of high costs, problematic tenants, and maintenance.

Find out how much you can earn with Arrived, how to get started, and if it is safe and legit through this review.

What is Arrived?

Arrived, formerly Arrived Homes, is a real estate crowdfunding investment platform. Through Arrived, you can be a co-owner of income-producing rental assets despite low capital.

The minimum investment is only $100. Any U.S. resident over 18 years old can invest in Arrived homes.

Arrived was founded in 2019 by Ryan Frazier, Alejandro Chouza, and Kenny Cason. It has 360+ properties and over $135,000,000 in funding from investors and financial institutions.

Continue reading to learn more about this modern real estate investment platform.

Is Arrived owned by Jeff Bezos? No. Jeff Bezos is not the owner of Arrived but he invested in both the $37 million seed round in 2021 and the $25 million Series A round in 2022. The investments were made through his personal investment company, Bezos Expeditions.

Have you ever invested in real estate?

How Does Arrived Work?

Arrived does all the legwork of a rental business for you. The only thing that you need to do is to invest money.

Using data, Arrived selects properties with the highest investment potential. Then, they look for a local property manager (PM) who helps with daily operations. Once all preparations are done, the rental property is listed on the Arrived website for funding.

There are three types of offerings in Arrived:

  • Residential Homes
    Properties listed on Homes.com, Move.com, Zillow.com, etc.
  • Vacation Rentals
    Properties listed on Airbnb, VRBO, Booking.com, etc.
  • Arrived Single Family Residential Fund (SFR Fund)
    Non-traded, private REIT launched by Arrived in November 2023. Automatically diversify your investment across various homes through this fund.

At Arrived, you can invest directly in an individual home whether it is for residential or vacation rentals. Each Arrived home is registered as an LLC. So when you buy Arrived shares, you're basically purchasing the LLC shares that own that home.

Legally, that means you have partial ownership of the house.

Unlike individual home offerings in Arrived, you can withdraw your investment in the Arrived SFR Fund in as early as 6 months. But if you withdraw before the 5th year, you must pay penalty fees.[1]

Earning Money in Arrived

If you invest in individual homes, simply fund a property and wait. You can earn here in two ways:

  • Rental Income
    You will receive monthly dividends based on the rental earnings.

  • Property Appreciation
    If the value of your property increases after the holding period (usually 5-15 years), you can receive the gains that are pro-rated to your initial investment.

You don't have to spend a lot of time managing rentals in Arrived. However, you have to pay fees in exchange for the convenience.

Fees

In general, you have to pay for 3 kinds of fees:[2][3]

Long-Term RentalsVacation Rentals
Sourcing Fee (One-Time)3.5% of property purchase price5% of property purchase price
Asset Under Management Fee (Quarterly)0.15% of property purchase price5% of Gross Revenue
Property Management Fee 8% of gross rental income15%-25% (Monthly)

  • Sourcing Fee (One-time)
    For costs involved in preparing the property for investment.

  • Asset Under Management Fee (Quarterly)
    To cover the administrative and management costs.

  • Property Management Fee
    For the operational expenses of local property managers.

Other one-time fees investors may receive from property managers include fees for lease-ups, renewals, rehab, & turn support.

How Much Money Can You Make in Arrived?

According to Arrived, this is the estimated historical annual return range for a diversified portfolio:

Single-Family ResidentialsVacation Rentals
Without Leverage6% - 10%5.5% - 12%
With Leverage7% - 12%6% - 15%
Target Investment Period5 - 7 years5 - 15 years

So, how much is that in dollars? Assuming you have $1,000 as an initial investment and a holding period of 7 years, here are the possible returns you can get:

Annualized ReturnInitial InvestmentProjected Value (After 7 Years)
5.5%$1,000$1,401
6%$1,000$1,444
7%$1,000$1,543
10%$1,000$1,847
12%$1,000$2,093
15%$1,000$2,494

Remember, these are just estimated returns based on historical data. Since you have the freedom to choose which property to invest in, you can either have multiple overperforming or underperforming ones in the same portfolio.

Some assets have appreciated as much as 136.1% in just over 2 years (over 60% in annual return). At the same time, some have depreciated for as low as -17.80% after a year. At the end of the day, your returns will depend on how well your picks perform.

Unfortunately, you can't take advantage of compounding interest here because you cannot reinvest your dividends in the same house.

If you want to know more about how much you can potentially earn, check the investment strategy returns calculator for each listing on the Arrived website.

Does Arrived Homes use leverage? Yes. Leverage in Arrived means that the homes are purchased with a mortgage. Even with a low cash outlay, they can purchase houses with a higher value. For example, they can buy a home that is worth $150,000 even with just $50,000 in equity since the rest is from the mortgage. In return, you can be exposed to higher returns and losses.

How to Withdraw Arrived Profits?

Your dividends are directly deposited to your linked bank account monthly. However, you cannot sell your Arrived shares until the end of the holding period which can take up to 5-15 years.

Because you partially own the property through the LLC, only when it is liquidated or sold can you get your money back. Until then, your investment in Arrived is considered illiquid.

Arrived is currently working on a secondary market with SEC that will allow you to sell your ownership, but there's no update yet on when that could be released as of December 2023.

As an alternative, Arrived launched the private REIT Arrived SFR Fund where you can withdraw funds after 6 months. However, you still have to pay a small penalty fee.

Arrived Pros & Cons

Pros:

  • Monthly dividends
  • Low minimum investment, only $100
  • Passive income
  • Accepts IRAs
  • Backed by notable investors
  • Data-driven decision making
  • Legal home co-ownership through LLC
  • Tax benefits for individual home rentals

Cons:

  • Costly fees
  • Illiquid investment
  • No auto dividend reinvesting yet
  • Limited vacation rental offerings
  • Unable to sell shares until the property is sold

How To Get Started

If you want to start investing in Arrived, simply follow these steps:

  1. Create an account on their website
    Input your personal information and financial goals.

  2. Confirm details for your investment account
    To get started with your investment account, fill out the Know-Your-Customer (KYC) and Anti-Money Laundering (AML) questionnaire. You can skip this and get back to it later if you're not sure yet.

  3. Fund your account
    Link a valid bank account for deposits and withdrawals.

  4. Invest in homes
    Browse their website for properties that are not completely funded yet. These are the ones available for investment.

You can create an account in just 10 minutes, but it might take up to 5 days to verify your account.

Is Arrived Homes Legitimate and Safe?

Yes. Arrived is registered with SEC, backed by notable individuals such as Jeff Bezos, and rated A+ by the Better Business Bureau. Plus, investors have the legal ownership of each house, not Arrived.

Despite starting only in 2019, Arrived has a promising track record. Arguably, being a new player can be seen as a drawback when compared to its established competitors.

For example, its offerings are designed to be long-term investments (from 5 to 15 years) but its oldest listing is only in its 2nd year as of December 2023. So in that sense, some say it's too early to know if Arrived is a good investment or not.

Nonetheless, there are signs that Arrived's assets are well-managed. Most of their vacation rentals receive good feedback. In fact, some units even get the Guest Favorite badge from Airbnb.

As for account security, you can enable the 2-step verification which can help prevent unauthorized access.

Types of Accounts

Arrived currently offers 3 types of accounts: Individual, Entity, and Checkbook IRA.

They only support one account type per email address. If you wish to invest through a self-directed IRA and individual account, you have to create two separate accounts.

Checkbook IRA is a type of self-directed IRA that lets you write checks directly through a single-member LLC to make investments.

If you don't have one yet, Arrived has partnered with Rocket Dollar who can assist in setting up your checkbook IRA account.

Customer Support

For questions on account and transaction issues, you can send an email directly to their support team. They also have a chatbot and live chat support on their website. In the official subreddit, you can ask general questions about Arrived and real estate investing.

For FAQ on Arrived, visit their Help Center.

How Does It Compare?

Arrived Homes isn't the only company offering pooled real estate investing to everyday people. Let's see how they differ.

Fundrise
Fundrise is a real estate investing platform. The minimum is only $10, making it even more accessible to small investors than Arrived.

Instead of investing in individual single-family homes, Fundrise automatically invests in a wide variety of real estate projects for you across the US. They have everything from residential, commercial, to industrial properties.

It's completely automatic, so you don't have to research and choose projects. This is good if you're not sure what to invest in. There is also an optional Fundrise Pro membership if you are an active investor who wants to customize your portfolio to your preferences.

Fundrise pays quarterly dividends. Plus you'll earn returns when the properties appreciate. Fundrise's historical annualized returns from 2017 to 2021 ranged from around 1.50% - 22.99%,[4] which may be higher than the rates that Arrived can offer for now.

Fundrise has a 1% annual fee for managing your portfolio. And each project has an origination fee usually between 0-2%. This pricing is comparable to Arrived, possibly a little cheaper.

Groundfloor
If you're looking for quick returns, you may like Groundfloor. The real estate projects last only 12 to 18 months.

Groundfloor works a little differently. Instead of owning a piece of a house, you're lending money to borrowers for fix-and-flip housing projects. Each loan has a fixed interest rate and projected term, so you know beforehand what to expect.

The average returns to date so far are 10%.[5] You can pick your own projects, or you can even set up automated investing. Groundfloor will automatically invest in loans for you based on the portfolio profile you set up.

Groundfloor loans are relatively safe because they're backed by the actual property. If the borrower defaults, Groundfloor can claim the property to pay back investors.

The minimum investment per loan is only $10. Plus, there are $0 fees for investors.

Bottom Line

Despite being a new player in the modern real estate investing industry, Arrived has a promising future thanks to its good management of rental properties and backing from sophisticated investors.

If you want the freedom to invest in specific rental properties and don't mind the illiquidity, try Arrived. But if you want a more established platform, Fundrise would be a better option.

Ethically, it is debated whether this type of business model can further contribute to the American affordable housing crisis. But some would say, it is better to have the ownership of these rental properties spread across many individuals instead of just a few wealthy investors and corporations.

Whichever you choose, investing in real estate has long proven to be a sound financial decision, and we can only hope to benefit from more options in the space.

References

  1. ^ Arrived. How does share redemption for the Fund work?, Retrieved 01/22/24
  2. ^ Arrived. How does Arrived make money?, Retrieved 01/22/24
  3. ^ Arrived. What fees do investors pay to property managers?, Retrieved 01/22/24
  4. ^ Fundrise. Explore client performance over time, Retrieved 01/22/24
  5. ^ Groundfloor. Groundfloor for investors, Retrieved 01/22/24
Arrived Homes

Invest in Rental Homes with $100+

Browse rental home investments for free. No bank account required

Fundrise

Invest in Real Estate with $10+

  • Only $10 minimum investment
  • Get a diversified portfolio of real estate projects across the US
  • Open to all investors
GROUNDFLOOR

Invest in Real Estate with $10

The minimum investment amount is only $10. (Though most transfer $100 for better diversification; subsequent transfers can be for any amount)

  • Short-term real estate investments lasting just 12-18 months
  • Open to non-accredited investors
  • No investor fees

Jeremy Harshman is a creative assistant at CreditDonkey, a personal finance comparison and reviews website. Write to Jeremy Harshman at jeremy.harshman@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

Fundrise, LLC ("Fundrise") compensates CreditDonkey Inc for new leads. CreditDonkey Inc is not an investment client of Fundrise.

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Have you ever invested in real estate?
44% Never!
38% Not yet but I want to
18% Yes
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