EquityMultiple vs Groundfloor vs Ark7: Choosing the Right Fractional Real Estate Platform

When evaluating real estate investment platforms, investors face a fundamental choice: seek sophisticated commercial deals for the wealthy, short-term debt instruments for the fee-conscious, or accessible, long-term equity ownership for everyone. EquityMultiple caters to accredited investors with $5,000+ to deploy, while Groundfloor offers fee-free, short-term loans. Ark7, however, has democratized real estate investing by allowing anyone to buy fractional shares in U.S. rental homes for as little as $20. This comprehensive guide compares these three platforms, positioning Ark7 as the superior choice for most investors seeking passive income, property appreciation, and liquidity.

Key Takeaways

• Ark7 is the most accessible and flexible platform, with a $20 minimum investment, no accreditation requirement, and a unique secondary market for selling shares after a 1-year hold.
• EquityMultiple is exclusively for accredited investors with $5,000+ to invest per deal, focusing on commercial real estate with no liquidity options.
• Groundfloor offers zero investor fees and short-term investment options, operating on a debt-only model with a 4.71% uncured default rate and fixed return structure without equity participation.
• Ark7 provides dual return potential through monthly cash distributions from rental income and long-term property appreciation, a combination not offered by Groundfloor’s interest-only loans.
• Investors should choose based on their profile: Ark7 for accessibility and simplicity, EquityMultiple for commercial exposure (if accredited), and Groundfloor for short-term, fee-free debt.

Understanding Real Estate Crowdfunding: EquityMultiple, Groundfloor, and Ark7 Explained

Real estate crowdfunding has opened doors for non-institutional investors to participate in property markets. The three platforms, however, serve vastly different investor needs through distinct models.

EquityMultiple operates as a private equity real estate firm for the accredited elite. It offers a range of investment structures—equity, preferred equity, and senior debt—in commercial properties like office buildings, industrial warehouses, and multifamily complexes. The barrier to entry is high, requiring both accredited investor status and a minimum investment of $5,000 to $30,000 per deal.

Groundfloor functions as a peer-to-peer lending marketplace. Investors provide capital for short-term, fix-and-flip or renovation loans to real estate developers, earning interest as the return. These are debt instruments called Limited Recourse Obligations (LROs), with terms ranging from 30 days to 24 months. The platform is open to nearly all investors and boasts zero fees for investors.

Ark7 pioneered a model of true fractional ownership in individual, cash-flowing residential properties. Instead of investing in a fund or a loan, you purchase shares representing direct equity in a specific single-family or townhome rental property. This model is open to all U.S. investors with a minimum of just $20 per share. Ark7 handles all property management, from tenant placement to maintenance, allowing investors to earn passive monthly rental income and benefit from any long-term appreciation in the property’s value. You can explore available investment properties on the Ark7 platform.

Ark7: Accessible Fractional Real Estate for Passive Income Seekers

Ark7’s core mission is to make real estate investment as easy as a stock investment. Its platform is built for passive income seekers who want to own a piece of tangible U.S. real estate without the headaches of being a landlord.

Key Ark7 Advantages:

• Share-by-Share Investment: Buy into high-yield rental properties for as little as $20 per share, making it the most accessible entry point in the industry.
• Monthly Cash Distributions: Receive passive income directly from the property’s rental revenue, paid out to your account monthly.
• Equity Ownership & Appreciation: As a shareholder, you benefit from both rental income and the potential long-term appreciation of the underlying asset.
• Full Operational Transparency: Access complete legal and financial disclosures for every property, 24/7, in your investor dashboard.
• Secondary Trading Market: After a 1-year minimum holding period, you can sell your shares on the PPEX ATS, a regulated alternative trading system, providing crucial liquidity that is absent on its competitors’ platforms.
• Professional End-to-End Management: Ark7 sources, acquires, leases, and manages every property, handling all operational complexities.
• AI-Driven Sourcing: The platform leverages technology and data to identify high-potential properties in strong markets.

The Ark7 Mobile App enhances this experience, allowing you to discover new properties, manage your portfolio, and track your dividend income from your phone, making real estate investing truly convenient.

EquityMultiple: Diversified Debt and Equity Options for Accredited Investors

EquityMultiple is a powerful platform, but its power is reserved for a select few. Its primary client is the accredited investor—someone with a net worth exceeding $1 million (excluding primary residence) or an annual income over $200,000.

Key EquityMultiple Features:

• Accredited-Only Access: The platform is not available to the general public, excluding over 90% of potential investors.
• High Minimums: Investments typically start at $5,000 and can go as high as $30,000 per deal, creating a significant capital barrier.
• Commercial Real Estate Focus: Offers exposure to asset classes like office, industrial, and data centers, which are typically out of reach for individual investors.
• Deal Structure Variety: Provides options for equity, preferred equity, and debt, allowing for sophisticated portfolio construction.
• Co-Investment: The platform invests its own capital in every deal, aligning its interests with its investors.

This level of sophistication is accompanied by certain structural considerations. EquityMultiple does not currently offer a secondary market, so invested capital is typically committed for the full investment term, which often ranges from 2 to 7 years. Additionally, the platform’s accreditation requirements and $5,000 minimum investment may limit accessibility for some investors.

Groundfloor: Short-Term Loans and Income Generation for All Investor Types

Groundfloor has carved out a niche as a fee-free, short-term lending platform. It’s a compelling choice for investors who prioritize capital recycling and are comfortable with a pure debt model.

Key Groundfloor Features:

• $0 Investor Fees: Groundfloor charges no fees to investors; its costs are covered by the borrowers.
• Ultra-Low Minimums: You can invest as little as $10 per loan, allowing for extreme portfolio diversification even on a small budget.
• Short-Term Horizon: Loan terms are brief, ranging from just 30 days to a maximum of 24 months, enabling quick capital turnover.
• High Stated Returns: The platform advertises target returns of 7-14%, among the highest in the space.
• Open to Most: Unlike EquityMultiple, it does not require accreditation for its standard loan products.

Groundfloor offers a debt-only investment structure, meaning returns are limited to the pre-determined interest without participation in property appreciation. The platform has a 4.71% uncured default rate. While investment terms are relatively short, there is no secondary market, so capital remains tied up until the specific loan reaches its maturity date.

Comparing Investment Minimums and Accessibility: Where Do They Stand?

The gap in accessibility between these platforms is stark. It fundamentally determines who can participate in the real estate market they offer.

Accreditation Required

• Ark7: No
• EquityMultiple: Yes
• Groundfloor: No (mostly)

Minimum to Start

• Ark7: $20
• EquityMultiple: $5,000+
• Groundfloor: $10

Investment Type

• Ark7: Equity shares
• EquityMultiple: Equity and debt (commercial real estate)
• Groundfloor: Debt (LROs)

For the vast majority of investors—students, young professionals, or those looking to start small—EquityMultiple is off the table. While Groundfloor’s $10 minimum is technically lower than Ark7’s $20, the nature of the investment is entirely different. A $20 investment in Ark7 buys a piece of a real asset with appreciation potential, while a $10 investment in Groundfloor is a small slice of a short-term, high-risk loan.

Ark7’s model is explicitly designed for inclusive investing and financial freedom for everyone, not just the wealthy. Its low barrier to entry allows investors to build a diversified real estate portfolio over time without a large initial capital outlay.

Fees and Transparency: What You Need to Know Before Investing

Fees and transparency are critical factors in long-term investment success.

• Ark7 is clear about its fee structure: it charges a management fee of 8-15% on the rental income generated by the property. This fee covers all the professional property management services—leasing, maintenance, accounting—that make the investment truly passive. Crucially, Ark7 emphasizes “no hidden fees”. You can also open a self-directed IRA to invest in real estate with $0 in Ark7 platform fees. However, there is a mandatory annual custodian fee of $100 per property, capped at $400 per year (waived for accounts over $100,000).
• EquityMultiple‘s fee structure is more complex, often involving a “double layer” of fees from both the platform and the underlying deal sponsor. These can include annual asset management fees (0.5-2%) and promote fees, which can significantly eat into net returns and reduce overall transparency.
• Groundfloor stands out by charging $0 in fees to investors. This is a major advantage, as 100% of the stated interest goes directly to you. However, this simplicity is balanced by the higher risk of default and the lack of any equity upside.

For an investor who values a completely hands-off experience and predictable monthly income, Ark7’s fee-for-service model provides clear value. You are paying for a full suite of professional services that allow you to be a passive property owner.

Liquidity Options: Reselling Shares and Investment Horizon

Liquidity is the Achilles’ heel of traditional real estate, and it remains a key differentiator among these platforms.

• Ark7 is the only one of the three to offer a secondary trading market. After holding your shares for a minimum of one year, you can list them for sale on the PPEX ATS. While an active market is not guaranteed, this feature provides a potential exit strategy for life changes, emergencies, or portfolio rebalancing that its competitors simply cannot match. Investors must still be prepared to hold their shares indefinitely, but the option to sell is a significant advantage.
• EquityMultiple and Groundfloor both structure investments around defined holding periods. With EquityMultiple, capital is typically committed for the full duration of a commercial real estate project, which often spans multiple years. Groundfloor investments are tied to the term of individual loans, generally ranging from one month to two years. At present, neither platform offers a secondary market or early-exit mechanism, so investments are generally held until project completion or loan maturity.

This liquidity feature makes Ark7 a more flexible and lower-risk choice for investors who are wary of having their capital completely locked up for an extended, fixed period.

Risk Assessment: Understanding the Potential for Loss in Real Estate Investments

All real estate investments are speculative and carry substantial risks, including the potential for complete loss of capital. However, the risk profiles of these platforms differ.

• Ark7‘s risk is tied to the performance of a specific residential rental property. Risks include tenant vacancy, property damage, and market fluctuations. However, residential rentals in strong markets are generally considered a more stable asset class. Ark7’s retention of a 1-20% minority stake in each property also aligns its interests with its investors.
• EquityMultiple deals with commercial real estate, which can be more sensitive to economic cycles. However, its rigorous underwriting process, accepting only about 5% of proposed deals, and its co-investment policy are designed to mitigate this risk.
• Groundfloor‘s primary risk is borrower default. Its 4.71% default rate is a concrete measure of this risk, which is significantly higher than many other lending platforms. While short-term loans can be less exposed to long-term market downturns, they are highly dependent on the success of the individual flip or renovation project.

For a new investor, the tangible nature of owning a share of a physical home may feel less abstract and potentially less risky than an anonymous commercial debt note or a short-term loan to an unknown developer.

IRA Investing with Real Estate: Tax Benefits and Opportunities

All three platforms support self-directed IRA investing, allowing your real estate investments to grow either tax-deferred (Traditional IRA) or tax-free (Roth IRA). This is a powerful tool for long-term wealth building.

For Ark7 investors, this means you can use your retirement funds to purchase shares in a tangible asset that generates monthly rental income, all within a tax-advantaged structure. Opening an Ark7 IRA is straightforward, with a $0 platform fee to get started. The annual custodian fee is a standard cost of managing a self-directed IRA and is not unique to Ark7. This feature allows investors to supercharge their retirement savings by adding a high-yield, income-generating real estate asset to their portfolio.

Making Your Decision: Which Platform Aligns with Your Investment Goals?

The best platform is the one that aligns with your financial situation, risk tolerance, and investment goals.

Choose Ark7 if you are:

• A non-accredited investor or a beginner with limited capital.
• Seeking passive monthly income from real estate.
• Looking for an investment with both income and long-term appreciation potential.
• Valuing flexibility and the possibility of liquidity through a secondary market.
• Wanting a simple, transparent, and hands-off investment experience.

Consider EquityMultiple if you are:

• An accredited investor with a significant capital base to deploy.
• Seeking exposure to institutional-grade commercial real estate.
• Comfortable with a long-term, completely illiquid investment.
• Sophisticated enough to navigate its complex deal structures and fee arrangements.

Consider Groundfloor if you are:

• Prioritizing a $0 fee structure above all else.
• Comfortable with a pure debt instrument and its associated default risk.
• Looking for short-term investments to recycle capital quickly.
• Seeking to build a highly diversified portfolio of small loans.

For the vast majority of investors seeking a balanced, accessible, and truly passive way to build wealth through real estate, Ark7 offers the most compelling and well-rounded solution. Its focus on fractional ownership of managed, income-producing homes, combined with its low entry point and unique liquidity option, makes it the clear choice for building a modern, diversified portfolio.

Frequently Asked Questions

What is the difference between fractional real estate investing and REITs?

Fractional real estate investing, like on Ark7, allows you to buy shares in a specific, individual property. You know exactly what you own and benefit directly from its rental income and appreciation. A REIT (Real Estate Investment Trust), by contrast, is a fund that owns a large, diversified portfolio of properties. You own a share of the entire fund, not a specific asset, and your returns are based on the fund’s overall performance.

Do I need to be an accredited investor to use EquityMultiple, Groundfloor, or Ark7?

You need to be an accredited investor to use EquityMultiple. Groundfloor is open to all investors with the exception of its “Anchor” loan product, which requires accreditation. Ark7 is also open to all U.S. investors and does not require accreditation, making it accessible to a much wider audience. This distinction is crucial for investors who want to participate in real estate investing but don’t meet the high net worth or income requirements for accredited status.

How does the secondary trading market work for Ark7 properties?

After holding your Ark7 shares for a minimum of one year, you can list them for sale on the PPEX ATS, a SEC-registered alternative trading system. You can set your own price, and other investors on the platform can purchase your shares. However, there is no guarantee that a buyer will be found, so you should be prepared to hold your investment long-term. The full details are available in Ark7’s offering documents.

Can I invest in real estate through an IRA on these platforms?

Yes, all three platforms—Ark7, EquityMultiple, and Groundfloor—support self-directed IRA accounts. This allows you to use your retirement funds to invest in real estate and enjoy the associated tax advantages. For Ark7 specifically, you can open a self-directed IRA with no platform fees, though you will pay an annual custodian fee.

What are the main risks involved in real estate crowdfunding investments?

All these investments are speculative and involve substantial risks. Key risks include illiquidity, as it may be difficult to sell your investment even with a secondary market. Lack of diversification is a concern if you only own one or two assets. Market fluctuations can affect property values and rental income. There is also the potential for a complete loss of your invested capital. It’s crucial to review all offering materials and consult with a financial advisor before investing.