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In the real estate crowdfunding world of long-term commitments, Concreit stands out by letting you withdraw your money at any time.
Of course, that liquidity comes at a cost. Don’t expect whoop-worthy returns from Concreit.
Concreit lets you start investing in real estate with just $1, without the long-term commitment of most crowdfunding platforms. Every week they pay a consistent 5.5% annual interest, which you can boost to 6.5% by referring others to the platform.
Just beware that withdrawing money could take a month or two, and your earned interest takes a hit if you withdraw funds within the first year.
- Strong(ish) liquidity
- No minimum investment
- Non-accredited investors allowed
- Weekly dividends
- Referral rewards for higher interest
- Automated investing
- Intuitive mobile app
- Strong customer support
- No guarantee of liquidity
- Modest returns
- Interest penalty on early withdrawals
- Only one investment option
- Mobile app only
What Is Concreit?
Concreit is a crowdfunding platform that offers a pooled fund for investing. That fund owns a series of hard money loans secured against residential properties and, more recently, has added commercial properties such as apartment complexes into the mix.
When you invest in Concreit, you buy shares in this fund.
Concreit pays an annual 5.5% interest rate in weekly distributions. If that sounds low, you can boost that to 6.5% by referring friends and family members to the platform.
How Concreit Works
To keep it simple, Concreit prices its shares at $1 apiece. You can start investing for as little as $1, making it the market's most accessible real estate crowdfunding investment.
Continuing on that theme of simplicity, Concreit offers a sleek, user-friendly mobile app. You download the app, connect your bank account, and run off. You can schedule one-time or recurring transfers for automated investing and select to receive dividends in your bank account or reinvest them.
Concreit only offers one fund, so you don’t have to (or get to) pick and choose investments.
Each week, you get a pleasant email noting exactly how much you earned in dividends over the last seven days. Few emails bring such reliably good news.
You submit a withdrawal request whenever you want to sell shares and withdraw money. Concreit doesn’t guarantee a specific time frame for withdrawals, but it typically ranges between one and eight weeks (more on that shortly).
While Concreit charges a 1% assets under management fee, that’s already factored into the 5.5% interest rate you earn from it.
Concreit offers plenty of advantages for investors looking for an alternative place to stash cash. Consider the following as you give it the once-over.
Concreit pitches itself as an alternative to savings accounts and money market accounts. In doing so, it boasts dramatically higher interest rates.
Of course, your money isn’t backed by the FDIC the way savings accounts are. And you also don’t have instant liquidity as it can take up to eight weeks to get your money out.
Still, that’s faster than other real estate crowdfunding platforms. Some platforms lock up your money for years, with either no way to access it early or with heavy penalties for doing so.
Concreit explains the withdrawal policy like this:
“Customers may request a withdrawal at any time. Rather than waiting for the fund to only sell assets, we are able to fund withdrawals through cash on hand, income from the assets, and return of principal when loans are paid off. Since these sources of funds are irregular, we'll sometimes delay withdrawals until we have funds to cover a withdrawal request – in periods of high requests, such as downturns, the waiting list for withdrawals may be long. In normal times, the wait is about a week.”
The legal language in its Withdrawal Policy is less rosy, but that’s lawyerly C-Y-A legalese for you.
No Minimum Investment
Technically, there’s a minimum investment of $1. But at this point, we’re splitting hairs.
Since Concreit fixes share prices at $1, you can invest in any round dollar amount you like. You can’t use the excuse “I can’t afford to invest in real estate” anymore. Just skip dessert or the Starbucks latte this week, and invest the money instead. Your waistline will thank you in addition to your wallet.
As much as we talk about ways to invest in real estate with no money, if you want to buy properties directly, you’re probably looking at coughing up thousands of dollars. Concreit truly lets you invest with spare change from under the couch cushion.
Concreit holds over 150 loans, and in 2022 they added ownership of an apartment complex to the fund's portfolio.
Because hard money loans turn over quickly, it keeps plenty of liquidity in their portfolio. That, in turn, gives Concreit the flexibility to pay withdrawals relatively quickly.
It won't sink the ship if one loan defaults, or even 10 or 20. By spreading the fund’s money across many loans and properties, Concreit creates diversification and room for the occasional loss.
For retirees and anyone who loves passive income as regular as clockwork, weekly dividends offer a welcome change from the typical quarterly payments by most funds.
The frequent payments also mean weekly compounding interest, for higher annualized returns.
You can lift your interest rate from 5.5% to 6.5% by referring others to the platform.
Each referral who opens and funds an account earns you $10. However, Concreit caps your referral rewards at no more than 1% of your account balance each year.
If you exceed that cap, your rewards do continue accruing, and they carry over to the next year.
Technically, the referral rewards program works by Concreit waiving its 1% AUM fee in $10 increments. But that’s more relevant to Concreit for legal reasons than it is to you.
Non-Accredited Investors Allowed
No other advantages to Concreit would matter if you couldn’t invest because you’re not an accredited investor.
In keeping with their commitment to simplicity and accessibility, Concreit allows all adult legal residents of the U.S. to invest.
Investing in Concreit is 100% passive. You don’t have to find deals, don’t have to hassle with financing, and don’t have to manage properties or tenants or contractors.
You just schedule recurring (or one-time) investments and select whether or not to reinvest dividends automatically.
Intuitive Mobile App
Few financial apps are as simple to use as Concreit’s.
Granted, the app doesn't offer many options or customization. You connect your bank account, fund the account, and view your returns. Other functionality includes viewing the current fund assets, chatting with customer support, and reading Help articles.
But Concreit still does an admirable job of keeping the app intuitive, sleek, and simple.
Strong Customer Support
You can connect with a support agent directly from the app to answer your questions in real-time. During off-hours, Concreit offers an AI support chat. Concreit representatives can email you any answers their bot couldn’t provide.
Most real estate crowdfunding platforms don’t offer that level of support.
For all those advantages, Concreit comes with plenty of downsides.
Watch out for the following before investing money with Concreit.
No Guarantee of Liquidity
Concreit’s main sales pitch revolves around its liquidity. The platform makes the case that you should accept lower returns than other crowdfunding platforms because it lets you pull out your money anytime.
But when you go to actually withdraw funds on the Concreit app, the following warning appears:
“From start to finish, withdrawals usually take 4-8 weeks to complete.”
That’s a far cry from savings accounts, with their instant liquidity.
Plus, if they don’t have enough cash to satisfy all withdrawal requests, they don’t. It could theoretically take many months before you get your money back, even if that’s unlikely.
The notion of earning 5.5% returns doesn’t exactly get my heart pumping. That goes doubly in an era of 8% to 9% inflation.
I have some money parked with Concreit as a temporary holding place for money I plan to invest in real estate elsewhere. But a 4- to 8-week withdrawal delay puts a dent in even that strategy.
Worse, Concreit claws back some of these modest returns if you withdraw money within a year of investing.
Interest Penalty on Early Withdrawals
If you withdraw money held in Concreit for less than a year, it charges you a fee equal to 20% of the interest you’ve earned.
That drops your effective interest rate from 5.5% to 4.4%.
On the plus side, Concreit doesn't base the penalty on your principal. Most other crowdfunding platforms do if you withdraw sooner than three or five years.
Only One Investment Option
Some investors like multiple options and like to customize their investments. If you’re one of them, Concreit will let you down.
It offers exactly one fund—hard stop.
I don’t particularly fault Concreit for this, however. It aligns with its commitment to simplicity. And because Concreit requires a minimum investment, your investment with Concreit can make up as little or large a portion of your asset allocation as you like.
Mobile App Only
Concreit doesn’t offer a desktop dashboard for logging in and managing your investments.
For people who prefer to do their banking and investing on their computer rather than their phone, that adds some inconvenience. But because Concreit keeps its platform simple, with only one investment option, I don’t find it an enormous downside.
How Concreit Compares
For a while, Concreit made better promises about liquidity than “4-8 weeks total for withdrawals.” You can still see it in its FAQ: “In normal times, the wait is about a week.”
I don’t mind temporarily parking money in places like Concreit for less-than-exhilarating returns. As a real estate investor, I don’t always know when I’ll need cash—and I need a lot of it at once. But the 4 to 8 weeks’ delay gives me pause.
So when Groundfloor launched its competing Stairs app it piqued my interest. I signed up for the waitlist and recently got approved to join. Stairs operates on a similar model: you buy shares in a pooled fund of hard money loans, you earn moderate interest, and you can withdraw funds at any time.
The main differentiator? Stairs lets you withdraw money instantly, with no penalty whatsoever.
Sure, the starting interest rate is only 4%. But if you agree to recurring monthly investments, that rises to 5%. If you agree to round up your purchases and invest the difference with Stairs, the interest rate rises to 6%, beating out Concreit. And you don’t even have to annoy your friends by trying to get them to sign up with your referral code.
That said, Stairs remains in beta testing with limited access. There’s a waiting list to join, and even once you get approved, you can only invest up to $5,000 initially.
Concreit offers far better liquidity than nearly every other competitor. The only other I can think of that offers fast liquidity is LEX Markets, with their secondary market for buying and selling shares in properties.
Most other crowdfunding platforms do pay higher returns, however. Check out Seth’s review of Fundrise, having earned an average return of around 14% over five years. Or the 10% to 11% average returns on Groundfloor, or the 7% to 10% dividend yield on Streitwise.
I’ve invested money with Concreit but never actually withdrawn it, so I can’t speak from experience whether the timeline falls closer to one week or eight.
I appreciate the liquidity and the weekly interest payments like clockwork. For my money, I can live with a fixed 4.4% to 5.5% net interest on short-to-medium-term parking. But if I need to put my hands on my money quickly, within the next week or two, I worry Concreit won’t deliver.
It might take a month or two for my money to get back into my checking account, so I need to plan my withdrawals more carefully. If you can do that, consider Concreit a viable option for parking money while saving up for your next real estate investment.