Ark7 vs DiversyFund

Choosing between fractional real estate platforms can significantly impact your passive income strategy and investment flexibility. While DiversyFund offers pooled multifamily REIT investments with long-term appreciation focus, Ark7 provides individual property shares with monthly cash distributions and greater investor control. Understanding these fundamental differences—between blind pooled funds and transparent property-level investing—helps investors select the approach that matches their income needs, risk tolerance, and investment timeline.

Key Takeaways

• Ark7 delivers monthly cash flow while DiversyFund provides none – Ark7 investors receive monthly dividends generating annualized yields, compared to DiversyFund’s reinvested income with zero cash distributions until property sale after 5-7 years
• Ark7 offers superior accessibility with $20 minimum investment – Investors can diversify $100 across 5 different properties on Ark7 versus DiversyFund’s $500 minimum for a single pooled fund with no property selection
• Ark7 provides earlier liquidity through secondary market – Shares can be traded after 1 year on Ark7 versus DiversyFund’s typically long‑term illiquidity until property sales
• Ark7 delivers property-level transparency – Monthly operating statements for each property with 24/7 document access versus DiversyFund’s aggregated REIT reporting with limited performance details
• Ark7 aligns incentives through equity model – No ongoing AUM fees with platform holding 1-20% equity stake versus DiversyFund’s 2% annual asset management fee plus undisclosed developer fees

When investors seek real estate exposure that balances passive income with flexibility, the choice between individual property platforms and pooled REITs becomes critical. Two distinct approaches—Ark7 and DiversyFund—represent fundamentally different philosophies toward fractional real estate investing. While DiversyFund operates as a multifamily REIT with income reinvestment and long-term holds, Ark7 provides direct access to curated rental properties with monthly cash distributions. This comparison reveals why Ark7’s investor-aligned model delivers superior value for those prioritizing income, control, and liquidity.

Understanding Each Platform’s Core Positioning

DiversyFund positions itself as a multifamily REIT focused on long-term appreciation through apartment complex investments. Founded in 2016, DiversyFund has built its reputation on providing accredited and non-accredited investors access to multifamily real estate through pooled funds. The platform serves investors with a hands-off approach that reinvests all rental income for compounding growth, targeting 10-20% IRR with a 7% preferred return structure.

Ark7 takes a radically different approach. Founded in 2018, Ark7 specializes in fractional ownership of individual single-family and townhome rental properties across high-growth Sunbelt markets. Rather than pooling investor capital into blind funds, Ark7 allows investors to select specific properties from a curated pipeline, providing monthly cash distributions and property-level transparency. The platform has attracted over 220,000 active investors and funded $23 million+ in property value, paying $3.5 million+ in total dividends.

The fundamental difference lies in investor experience: DiversyFund provides a blind REIT investment with reinvested income and long lockups, while Ark7 delivers property-specific ownership with monthly cash flow and earlier liquidity options.

Investment Structure and Access Show Distinct Strategic Approaches

DiversyFund’s investment structure includes:

• Pooled multifamily REIT with no individual property selection
• $500 minimum investment requirement
• All rental income reinvested (no cash distributions)
• 5-7 year hold period with no early withdrawal options
• 2% annual asset management fee plus developer fees
• Aggregated performance reporting with limited transparency
• K-1 tax forms requiring complex filing

This pooled approach works for investors seeking long-term appreciation without needing current income, but sacrifices control, liquidity, and transparency.

Ark7’s investment structure focuses on individual property ownership:

• Individual property selection from curated high-yield rentals
• $20 minimum investment per share
• Monthly cash distributions providing immediate income
• Secondary market liquidity after 1-year minimum hold
• No ongoing AUM fees (platform holds equity stake instead)
• Property-level monthly statements
• Simple 1099 tax forms for easier filing

The individual property model eliminates the blind pool risk that challenges REIT approaches.

For example, while DiversyFund investors commit $500 to an undifferentiated REIT with no control over asset selection, Ark7 investors can allocate $100 across 5 different properties in markets like Atlanta, Dallas, and Tampa, selecting based on yield, occupancy, and growth potential. This control advantage becomes crucial for investors building diversified real estate portfolios.

Cash Flow and Income Generation Reveal Fundamental Differences

The income generation approach represents the most significant distinction between these platforms.

DiversyFund’s cash flow model:

• Zero monthly or quarterly distributions
• All rental income reinvested into the REIT
• Returns realized only upon property sale (5-7 years minimum)
• 7% preferred return paid before platform profits (at exit only)
• No immediate passive income for investors

Ark7’s cash flow model:

• Monthly dividend distributions starting ~30 days after property funding
• Annualized dividend yields on rental properties
• Top-performing properties yielding competitive returns
• Consistent monthly dividends paid to investors
• Immediate passive income stream for investors

This income difference proves critical for investors seeking current cash flow. According to performance data, a $10,000 investment on Ark7 generates immediate income distributed monthly, while the same investment on DiversyFund produces $0 in cash flow for 5-7 years. For income-dependent investors or those practicing dollar-cost averaging with dividends, Ark7’s monthly distributions provide significant advantages over DiversyFund’s income reinvestment model.

Liquidity and Exit Options Highlight Flexibility Advantages

The ability to access invested capital represents another major differentiator.

DiversyFund’s liquidity constraints:

• 5-7 year mandatory hold period
• No early withdrawal or redemption options
• Capital locked until property sale
• No secondary market for share trading
• Illiquidity risk for emergency needs

Ark7’s liquidity advantages:

• 1-year minimum hold period before secondary market access
• Regulated secondary trading platform (PPEX ATS)
• Ability to rebalance portfolio based on performance
• Exit options for changing life circumstances
• Reduced illiquidity risk compared to competitors

The liquidity difference proves critical for risk management. While DiversyFund investors must commit capital for half a decade with no early exit options, Ark7 investors gain trading flexibility after just 12 months. This shorter lockup period enables portfolio optimization, emergency access, and tactical reallocation—features essential for prudent investment management.

Transparency and Reporting Show Information Access Differences

Investor transparency varies dramatically between these platforms.

DiversyFund’s transparency limitations:

• Aggregated REIT performance reporting only
• Limited property-level details
• Unclear actual returns
• As of early 2024, only 12 properties in reported portfolio
• Restricted access to operational documents

Ark7’s transparency advantages:

• Property-level monthly operating statements showing income, expenses, occupancy
• High portfolio occupancy rates
• 24/7 access to legal and financial documents
• Detailed property performance tracking
• Full disclosure of fees and management costs

This transparency difference enables informed decision-making. Ark7 investors can track individual property performance, identify trends, and make data-driven allocation decisions, while DiversyFund investors receive only aggregated REIT metrics with limited insight into underlying asset performance.

User Experience and Platform Quality Demonstrate Service Differences

Platform usability and user satisfaction reveal significant quality gaps.

DiversyFund’s user experience:

• 2.5/5 Trustpilot rating (537 reviews)
• 2.9/5 iOS app rating
• 3.1/5 Android app rating
• Limited mobile functionality
• User complaints about communication and support

Ark7’s user experience:

• 4.1/5 Trustpilot rating (243 reviews)
• 4.7/5 iOS app rating
• 4.2/5 Android app rating
• Full-featured mobile app with investing and tracking capabilities
• Consistent praise for customer service and platform usability

The user experience advantage extends to platform functionality. Ark7’s mobile app enables property discovery, share purchase, dividend tracking, and secondary market trading in one secure interface, while DiversyFund’s lower-rated apps provide more limited functionality. For mobile-first investors, Ark7’s superior platform quality enhances the overall investment experience.

Fees and Total Cost of Ownership Reveal Value Differences

The fee structures reflect different value propositions.

DiversyFund’s cost structure:

• No upfront broker fees
• 2% annual asset management fee
• Undisclosed developer fees at project level
• Higher total cost when combining all fees
• K-1 tax forms requiring additional accounting costs

Ark7’s cost structure:

• 3% one-time sourcing fee
• No ongoing AUM fees (equity model instead)
• 8-15% property management fee (industry standard)
• Platform holds 1-20% equity stake (aligns incentives)
• Simple 1099 tax forms reducing accounting complexity

When calculating total cost of ownership, Ark7’s transparent fee structure provides better value. While DiversyFund avoids upfront broker fees, their 2% annual asset management fee plus undisclosed developer fees create higher ongoing costs. More importantly, Ark7’s equity model ensures the platform profits only when investors profit, creating true alignment of interests versus DiversyFund’s fee-based revenue model.

Acknowledging DiversyFund’s Strengths While Highlighting Ark7’s Advantages

DiversyFund does offer certain advantages worth acknowledging:

• No upfront broker fees – Developer fees are built into projects rather than charged separately
• 7% preferred return structure – Investors receive 7% returns before platform profits (though only at exit)
• Multifamily specialization – Dedicated expertise in apartment complex investing
• Over $224M in assets under management (as of March 2023) – Significant asset scale demonstrating market presence

However, these advantages are outweighed by Ark7’s superior features for most investors. While DiversyFund avoids broker fees, Ark7’s 3% sourcing fee is transparent and one-time. More importantly, Ark7 provides monthly cash flow starting immediately versus DiversyFund’s zero distributions for 5-7 years. For investors needing passive income, Ark7 delivers consistent annual returns on investment versus DiversyFund’s $0 for half a decade.

The 7% preferred return sounds attractive but only materializes at property sale after 5-7 years, while Ark7’s monthly distributions provide immediate utility and compounding opportunities. Additionally, Ark7’s individual property selection allows investors to target specific markets and property types based on their strategy, while DiversyFund’s pooled fund offers no control over asset allocation.

Why Ark7 Delivers Superior Value for Most Real Estate Investors

Most investors benefit more from Ark7’s investor-aligned model than DiversyFund’s REIT approach. The combination of monthly income, property-level control, earlier liquidity, and superior transparency creates compelling advantages.

Key advantages of Ark7’s approach:

• Immediate cash flow: Generates monthly passive income starting ~30 days after investment versus DiversyFund’s 5-7 year wait for any returns. This velocity enables income reinvestment and financial flexibility.

• Superior accessibility: $20 minimum investment allows diversification across multiple properties with limited capital, while DiversyFund’s $500 minimum restricts portfolio breadth for small investors.

• Enhanced control: Individual property selection enables strategic allocation based on market, yield, and growth potential versus DiversyFund’s blind pool with no asset choice.

• Earlier liquidity: Secondary market access after 1 year provides emergency exit options and portfolio rebalancing capabilities versus DiversyFund’s typically long‑term illiquidity until property sales.

• Better transparency: Property-level monthly statements enable informed decision-making versus DiversyFund’s aggregated reporting with limited details.

For investors seeking real estate exposure that balances income, control, and flexibility, Ark7 represents the superior choice. The platform’s combination of monthly dividends, individual property selection, and earlier liquidity creates value that DiversyFund’s REIT model cannot match.

Frequently Asked Questions

What is the minimum investment required to start with Ark7?

Ark7 offers one of the lowest barriers to entry in fractional real estate investing with a minimum investment of just $20 per share. This allows investors to diversify even small amounts of capital across multiple properties. For example, with $100, you could invest in 5 different properties across various markets like Atlanta, Dallas, and Tampa, spreading risk while building a diversified real estate portfolio.

How does Ark7 generate passive income for investors?

Ark7 generates passive income through monthly cash distributions from rental properties. When you purchase shares in a specific property, you receive a proportional share of the rental income after expenses. Ark7 pays monthly dividends with competitive annualized yields, with some top-performing properties delivering strong returns. These distributions are deposited directly into your Ark7 account and can be reinvested or withdrawn.

Can I sell my Ark7 shares if I need to access my funds?

Yes, Ark7 provides liquidity options that most fractional real estate platforms don’t offer. After a 1-year minimum holding period, you can sell your shares on the regulated secondary trading platform (PPEX ATS). This provides significantly more flexibility than platforms like DiversyFund, which lock up capital for 5-7 years with no early withdrawal options. However, it’s important to note that secondary market liquidity isn’t guaranteed, so investors should be prepared to hold shares long-term.

Does Ark7 offer IRA investment options?

Yes, Ark7 offers both Traditional and Roth IRA accounts through their partnership with Inspira Financial Company as the custodian. This allows investors to use tax-advantaged retirement accounts to invest in real estate fractional shares. The Ark7 IRA has no opening fee from Ark7, though Inspira charges a $100 annual fee per property (capped at $400 annually) that’s waived if your account balance exceeds $100,000.

What kind of transparency can I expect from Ark7 regarding property performance?

Ark7 provides exceptional transparency compared to most fractional real estate platforms. Investors receive property-level monthly operating statements that detail income, expenses, occupancy rates, maintenance costs, and management fees for each property. You also have 24/7 access to all legal and financial documents through your account dashboard. This level of transparency allows you to make informed decisions about your investments and track performance over time.