7 1031 Crowdfunding Alternatives

When evaluating alternatives to 1031 Crowdfunding for real estate investment, the choice ultimately comes down to whether you need specialized tax-deferred exchange solutions or accessible, transparent fractional ownership with monthly income. While 1031 Crowdfunding excels at Delaware Statutory Trust offerings for accredited investors completing 1031 exchanges, many investors seek platforms offering lower minimums, monthly cash flow, and true liquidity. This comprehensive guide examines the top 1031 Crowdfunding alternatives, with particular emphasis on why Ark7 emerges as the superior choice for fractional real estate investing.

Key Takeaways

• Ark7 leads as the top 1031 Crowdfunding alternative – Offers $20 minimum investments, monthly cash distributions, zero AUM fees, and secondary market liquidity
• 1031 Crowdfunding focuses on tax-deferred exchanges – Specializes in Delaware Statutory Trusts for accredited investors with $25,000+ minimums
• Accessibility defines Ark7 – SEC Reg A+ qualification opens real estate investing to all U.S. investors 18+
• Monthly income advantage – Only major platform offering consistent monthly distributions vs quarterly competitors
• Choose by use case – 1031 Crowdfunding for tax deferral; Ark7 for accessible wealth building with monthly cash flow

Understanding 1031 Crowdfunding: A specialized tax-deferral platform

1031 Crowdfunding positions itself as a specialized platform focused on facilitating tax-deferred exchanges through Delaware Statutory Trusts (DSTs) and other qualified offerings. Serving accredited investors seeking to defer capital gains taxes after selling investment property, the platform combines institutional-grade commercial real estate with 1031 exchange expertise.

Key 1031 Crowdfunding Strengths:

• Specialized 1031 exchange expertise – #1 rated platform for tax-deferred exchanges since 2014
• $2.1B+ in equity raised with 1,500+ successful transactions
• Diverse offering types including DSTs, REITs, Opportunity Zone funds, and bridge financing
• Institutional-grade properties – access to senior housing, multifamily, and medical office assets
• White-glove service – personalized support for complex tax-deferred transactions

Platform Considerations:

• High minimum investments – $25,000-$100,000 minimums exclude most investors
• Accredited investor only – Most offerings restricted to accredited investors
• Illiquid investments – DST investments typically require 5-7 year holding periods
• Opaque fee structure – 5-7% fees embedded in offerings with limited transparency
• No mobile app – Web-only platform with no dedicated mobile applications

With pricing requiring $25,000+ minimum investments and accreditation requirements, 1031 Crowdfunding offers specialized tax-deferral solutions but stops short of serving the broader market of income-focused investors seeking accessible real estate exposure.

Top 7 1031 Crowdfunding Alternatives Ranked

1. Ark7: The best overall alternative for accessible fractional ownership

Ark7 revolutionizes real estate investing by offering fractional ownership in individual rental properties with SEC Reg A+ qualification, enabling anyone to build wealth through real estate. With shares starting at just $20, monthly cash distributions, and a secondary trading market, Ark7 eliminates the traditional barriers to real estate investment while maintaining full transparency and professional property management.

Key Ark7 Advantages:

• Industry-lowest entry barrier – $20 minimum investment vs $25,000+ for competitors
• Monthly cash distributions – Consistent monthly dividends from rental income vs quarterly competitors
• Zero AUM fees – No ongoing asset management fees (only 3% one-time sourcing fee)
• True secondary market liquidity – Sell shares on PPEX ATS after 12-month hold with $0 transaction fees
• Individual property selection – Choose specific rental properties vs forced fund allocation

Accessible Fractional Ownership:

Unlike 1031 Crowdfunding’s high-barrier approach, Ark7’s fractional real estate investment model enables investors to build diversified portfolios across multiple properties with limited capital. The platform’s transparency extends to complete access to legal and financial documents 24/7, empowering investors to make informed decisions about their real estate holdings.

Proven Performance:

Ark7’s effectiveness is validated by consistent performance metrics:

• 94.81% portfolio occupancy
• $23MM+ in property value funded through the platform
• 230,000+ active investors 

Integration Ecosystem:

Ark7’s mobile app enables investors to discover, purchase, and manage rental properties entirely from their smartphones. The platform also supports IRA investing through Inspira Financial Company, allowing investors to use retirement funds for real estate investment with tax advantages.

2. Fundrise: The passive fund management alternative

Fundrise serves as a comprehensive real estate investment platform combining eREITs and direct property funds with professional portfolio management. With 400,000+ investors and $1B+ annual deployment, Fundrise offers an affordable entry point for investors seeking completely passive real estate exposure.

Key Fundrise Advantages:

• Lowest ongoing fees – 1% total annual fees vs 5-9% effective for other platforms
• Largest user base – 400,000+ investors with 13-year track record
• Professional fund management – Diversified eREIT portfolios across multiple property types
• Low minimum investment – $10 entry point for new investors
• SEC Reg A+ qualification – Open to non-accredited investors

Platform Considerations:

• No property selection – Forced fund allocation vs individual property control
• Quarterly distributions – Less frequent cash flow than Ark7’s monthly payments
• Limited liquidity – Quarterly redemption windows vs Ark7’s continuous secondary market
• Embedded fees – Management fees embedded in the 1% annual structure

Fundrise represents a solid choice for investors prioritizing completely passive fund management with low fees, but it doesn’t offer the individual property control and monthly income of Ark7.

3. RealtyMogul: The accredited investor REIT platform

RealtyMogul serves as a real estate investment platform combining REITs and private placement offerings for accredited investors. With access to both income-focused and growth-oriented real estate investments, RealtyMogul provides diversified exposure to commercial and residential properties.

Key RealtyMogul Advantages:

• Strong historical returns – 12% average reported returns
• Diversified REIT options – Income REIT and Apartment Growth REIT offerings
• Monthly distributions – Income REIT offers monthly payouts (109 consecutive months)
• Professional property management – End-to-end management included
• IRA eligibility – Supports self-directed IRA investments

Platform Considerations:

• Accredited investors only – Most offerings restricted to accredited investors
• High minimum investments – $5,000+ minimums per offering
• Annual AUM fees – 1-1.25% annual management fees
• Limited property selection – REIT structure provides less control than individual properties
• No mobile app – Web-only platform functionality

RealtyMogul excels for accredited investors seeking diversified REIT exposure with professional management, but it doesn’t provide the accessibility and individual property control of Ark7.

4. CrowdStreet: The institutional commercial real estate alternative

CrowdStreet specializes in institutional-quality commercial real estate investments, offering access to office, retail, and industrial properties through a rigorous vetting process. With $4.4B+ raised across 800+ projects, CrowdStreet serves accredited investors seeking exposure to commercial real estate.

Key CrowdStreet Strengths:

• Institutional-quality deals – Access to $4.4B+ in commercial real estate projects
• Rigorous vetting process – Only 5% of reviewed deals make it onto the platform
• Deal-by-deal control – Select individual commercial projects aligned with your thesis
• Professional property management – Comprehensive management included
• 1031 exchange compatibility – Some offerings qualified for tax-deferred exchanges

Platform Considerations:

• Accredited investors only – No access for non-accredited investors
• High minimum investments – $25,000+ per deal
• Illiquid investments – 5+ year holds typical with no secondary market
• Complex investment structures – Requires sophisticated understanding of commercial real estate
• No mobile app – Web-only platform functionality

CrowdStreet excels for accredited investors seeking large-scale commercial projects, but it doesn’t serve the 98% of investors excluded by accreditation requirements like Ark7 does.

5. Arrived Homes: The individual SFR selection platform

Arrived Homes focuses on individual single-family rental (SFR) properties with fractional ownership opportunities. With 731,000+ users and $240M+ invested across 440+ properties, Arrived provides access to residential real estate with celebrity backing from Jeff Bezos.

Key Arrived Homes Advantages:

• Individual property selection – Choose specific single-family homes
• Large user base – 731,000+ investors with strong backing
• Proven exit track record – 173 properties sold with 18.6% average total return
• SEC Reg A+ qualification – Open to non-accredited investors
• Mobile app available – Full platform functionality on mobile devices

Platform Considerations:

• Higher minimum investments – $100 minimum vs Ark7’s $20 (5x higher barrier)
• Quarterly distributions – Less frequent than Ark7’s monthly cash flow
• Higher total fees – 3.5-5% sourcing fee plus 0.15-0.30% quarterly AUM fees
• Limited liquidity – Secondary market available after 6 months but with restrictions
• Smaller property portfolio – Focused primarily on single-family homes

Arrived Homes serves investors seeking individual SFR selection with proven exits, but it doesn’t match Ark7’s lower minimums, monthly distributions, and zero AUM fees.

6. EquityMultiple: The accredited investor private equity alternative

EquityMultiple serves as a real estate investment platform focused on private equity-style offerings for accredited investors. With 48,000+ investors and access to both debt and equity real estate investments, EquityMultiple provides institutional-quality opportunities with professional management.

Key EquityMultiple Advantages:

• Diverse investment types – Access to both debt and equity real estate investments
• Professional underwriting – Rigorous vetting and due diligence process
• Institutional partnerships – Access to institutional-quality deals
• Accredited investor focus – Tailored offerings for high-net-worth investors
• Professional property management – Comprehensive management included

Platform Considerations:

• Accredited investors only – No access for non-accredited investors
• High minimum investments – $5,000-$25,000+ minimums
• Illiquid investments – Multi-year holds with limited exit options
• Complex fee structures – Variable fees depending on investment type
• No mobile app – Web-only platform functionality

EquityMultiple excels for accredited investors seeking private equity-style real estate exposure, but it doesn’t provide the accessibility and monthly income of Ark7.

7. DiversyFund: The growth-focused REIT alternative

DiversyFund specializes in growth-oriented real estate investment funds focused on value-add opportunities. With a focus on long-term appreciation rather than immediate income, DiversyFund serves investors seeking capital appreciation through professionally managed real estate portfolios.

Key DiversyFund Advantages:

• Growth-focused strategy – Emphasis on long-term appreciation vs immediate income
• Professional fund management – Experienced team managing value-add opportunities
• Diversified portfolios – Exposure to multiple property types and markets
• Accredited investor offerings – Tailored for sophisticated investors
• Professional property management – Comprehensive management included

Platform Considerations:

• Accredited investors only – No access for non-accredited investors
• Income-focused limitations – Less emphasis on immediate cash flow
• Fund allocation only – No individual property selection
• Illiquid investments – Multi-year holds with limited exit options
• Limited platform information – Less transparent than leading competitors

DiversyFund serves accredited investors seeking growth-focused real estate exposure, but it doesn’t match Ark7’s accessibility, monthly income, and individual property control.

Why Ark7 stands out for accessible fractional ownership

Ark7’s dominance in accessible fractional ownership stems from several unique advantages. The platform’s industry-lowest entry barrier ensures real estate investing is available to virtually anyone, with $20 minimum investments versus $25,000+ for competitors like 1031 Crowdfunding.

Monthly cash flow advantage represents Ark7’s killer feature, enabling income-focused investors to receive consistent monthly distributions versus the quarterly standard of competitors. This provides superior cash flow management and faster reinvestment compounding for investors building passive income streams.

The true secondary market liquidity through PPEX ATS integration transforms historically illiquid real estate into semi-liquid investment with exit options after 12 months. This removes forced 5-7 year hold periods and provides emergency liquidity unavailable to 1031 Crowdfunding’s illiquid DST investments.

Zero AUM fees preserve investor returns over long-term holds, eliminating the 1-2% annual drag that compounds over time. On a $10,000 investment over 10 years, this saves $1,000-$2,000 versus platforms charging 1% annual fees.

Specific use cases where each platform excels

Choose Ark7 when:

• Building accessible real estate portfolios with limited capital ($20 minimum)
• Requiring monthly passive income vs quarterly distributions
• Seeking true liquidity with secondary market trading after 12 months
• Wanting individual property selection vs forced fund allocation
• Prioritizing zero AUM fees to preserve long-term returns
• Needing mobile-first platform experience with full functionality

Select other platforms for:

• Tax-deferred 1031 exchanges with existing property sale proceeds (1031 Crowdfunding)
• Completely passive fund management with lowest ongoing fees (Fundrise)
• Accredited investor REIT exposure with monthly income (RealtyMogul)
• Institutional commercial real estate access (CrowdStreet)
• Individual SFR selection with higher minimums (Arrived Homes)
• Private equity-style real estate investments (EquityMultiple)
• Growth-focused real estate funds (DiversyFund)

Technical capabilities showdown

Accessibility and Minimums:

• Ark7: $20 minimum, non-accredited access, SEC Reg A+ qualified
• 1031 Crowdfunding: $25,000+ minimum, accredited only, DST-focused
• Fundrise: $10 minimum, non-accredited access, fund allocation only
• Arrived Homes: $100 minimum, non-accredited access, individual properties

Income and Distributions:

• Ark7: Monthly cash distributions from rental income
• 1031 Crowdfunding: Variable cash flow depending on DST structure
• Fundrise: Quarterly distributions from fund performance
• RealtyMogul: Monthly (Income REIT) or quarterly (other offerings)

Liquidity and Exit Options:

• Ark7: PPEX ATS secondary market after 12 months, $0 transaction fees
• 1031 Crowdfunding: Illiquid DSTs with 5-7 year holding periods
• Fundrise: Quarterly redemption windows with potential penalties
• Other platforms: Limited or no secondary market liquidity

Fees and Costs:

• Ark7: 3% one-time sourcing fee, $0 annual AUM fees
• 1031 Crowdfunding: 5-7% embedded fees, opaque structure
• Fundrise: 1% total annual fees, embedded structure
• Arrived Homes: 3.5-5% sourcing fee plus 0.15-0.30% quarterly AUM fees

Making the Right Choice

Selecting the ideal 1031 Crowdfunding alternative depends on your specific requirements, investment goals, and capital availability. Ark7 emerges as the clear winner for accessible fractional ownership, combining industry-lowest minimums with monthly cash flow, true liquidity, and zero AUM fees.

For investors prioritizing accessibility, requiring monthly passive income, or seeking to build diversified real estate portfolios with limited capital, Ark7 provides the optimal balance of power and simplicity. The platform’s proven track record with 230,000+ investors, comprehensive transparency, and mobile-first approach ensure successful real estate investing for everyone.

The future of real estate investing is accessible, and Ark7 leads the charge in democratizing fractional ownership for every investor. Start building your rental property portfolio today with Ark7’s $20 minimum and join the growing community of successful investors who’ve chosen the platform for their real estate wealth building needs.

Frequently Asked Questions

What is the main difference between a 1031 exchange and real estate crowdfunding for tax deferral?

The main difference is that 1031 exchanges provide direct tax deferral on capital gains from property sales by reinvesting in like-kind properties, while real estate crowdfunding platforms like Ark7 offer accessible fractional ownership for general wealth building. 1031 Crowdfunding specializes in Delaware Statutory Trusts that qualify for 1031 exchanges, serving accredited investors with high minimums and tax-deferral needs. In contrast, Ark7 focuses on accessible fractional real estate investment with monthly income for all investors, regardless of accreditation status. Both approaches serve real estate investors but with fundamentally different objectives and accessibility profiles.

Can fractional real estate investments be used in a 1031 exchange?

Most fractional real estate investments, including Ark7 shares, cannot be used directly in a 1031 exchange because they don’t qualify as like-kind property under IRS rules. The IRS requires that replacement property in a 1031 exchange must be direct real estate ownership, not securities or fractional interests in pooled investments. Platforms like 1031 Crowdfunding offer specialized Delaware Statutory Trusts designed specifically to meet IRS requirements for 1031 exchanges, serving investors who need to defer capital gains from property sales. Meanwhile, Ark7 provides accessible real estate ownership for investors not completing property exchanges but seeking to build wealth through fractional ownership.

What are the typical fees associated with real estate crowdfunding platforms like Ark7?

Ark7 charges a 3% one-time sourcing fee with zero annual AUM fees, preserving investor returns over long-term holds without recurring charges. This contrasts sharply with competitors like Fundrise (1% annual fees), Arrived Homes (3.5-5% sourcing plus 0.15-0.30% quarterly AUM fees), and 1031 Crowdfunding (5-7% embedded fees). Ark7’s transparent fee structure eliminates the recurring annual charges that compound over time and erode returns. On a $10,000 investment held for 10 years, Ark7’s zero AUM fee structure saves investors $1,000-$2,000 compared to platforms charging 1% annual fees, making it one of the most cost-effective options for long-term real estate investing.

How does investing in real estate through an IRA differ from a 1031 exchange?

Investing through an Ark7 IRA allows you to use retirement funds for real estate investment with tax advantages, but it doesn’t provide the immediate capital gains tax deferral of a 1031 exchange. 1031 exchanges defer taxes on property sale proceeds by reinvesting in like-kind properties within strict timelines, serving investors who have recently sold investment property. IRA investing provides tax-advantaged growth within retirement accounts, either tax-deferred (Traditional IRA) or tax-free (Roth IRA), depending on the account type. Ark7’s IRA option has no opening fee and annual custodian fees of $100 per property (capped at $400, waived for balances over $100,000), making it an accessible way to add real estate to retirement portfolios.

What are the liquidity options for fractional real estate shares?

Ark7 offers true secondary market liquidity through the PPEX ATS after a 12-month holding period with zero transaction fees, transforming historically illiquid real estate into semi-liquid investment. This secondary marketplace allows investors to list shares for sale and exit positions when needed, providing emergency liquidity and portfolio rebalancing capabilities. Most competitors like 1031 Crowdfunding offer illiquid investments with 5-7 year holding periods and no exit options before property sale. Fundrise provides limited quarterly redemption windows that may be suspended during market downturns, while some platforms charge redemption fees. Ark7’s continuous secondary market represents a significant advantage for investors who value flexibility and potential liquidity in their real estate investments.

Are crowdfunding platforms suitable for both accredited and non-accredited investors?

Ark7 is suitable for both accredited and non-accredited investors, with SEC Reg A+ qualification opening the platform to all U.S. investors 18 and older. This regulatory structure democratizes access to real estate investment opportunities that were historically reserved for wealthy individuals meeting accreditation requirements. In contrast, platforms like 1031 Crowdfunding, CrowdStreet, and EquityMultiple restrict most offerings to accredited investors only, excluding approximately 98% of Americans. Ark7’s inclusive approach aligns with its mission to make real estate investment accessible to everyone, not just high-net-worth individuals. The platform maintains institutional-quality property selection and professional management while opening opportunities to all investors regardless of income or net worth.