Roots vs 1031 Crowdfunding vs Ark7: Looking for the Best Fractional Real Estate Platform

When evaluating real estate investment platforms, investors face a critical choice between accessibility, tax advantages, and social impact. While Roots offers a unique social impact REIT model and 1031 Crowdfunding specializes in tax-deferred exchanges for accredited investors, Ark7 emerges as the superior choice for everyday investors seeking accessible, transparent fractional real estate ownership. By offering the $20 minimum investment, monthly cash distributions, and zero annual fees, Ark7 democratizes real estate investing for the 98% of Americans excluded from high-barrier alternatives. This comprehensive comparison examines how these three platforms serve different investor needs, with particular emphasis on why Ark7 stands out as the optimal solution for building wealth through rental property shares.

Key Takeaways

• Ark7 offers the most accessible entry point at $20 per share, compared to $100 for Roots and $25,000-$100,000 for 1031 Crowdfunding
• Monthly cash distributions from Ark7 provide 3x more frequent income than quarterly competitors like Roots and 1031 Crowdfunding
• Zero annual AUM fees with Ark7 save investors $200-350 per $10,000 invested over 5 years compared to fee-charging alternatives
• Individual property selection through Ark7 enables portfolio customization impossible with Roots’ pooled REIT or 1031 Crowdfunding’s DST structures
• Secondary market liquidity after 12 months makes Ark7 investments semi-liquid, unlike the limited liquidity of 1031 Crowdfunding offerings
• Choose Ark7 for accessibility and transparency, Roots for social impact alignment, or 1031 Crowdfunding if you need tax-deferred exchanges as an accredited investor

Understanding Real Estate Crowdfunding: What is it?

Real estate crowdfunding has revolutionized property investing by enabling individuals to purchase fractional ownership in rental properties without the traditional barriers of high capital requirements, property management responsibilities, or accreditation status. This model allows investors to diversify their portfolios with real estate assets that generate passive income through rental distributions while benefiting from potential property appreciation.

The three platforms examined here represent distinct approaches to real estate crowdfunding:

• Fractional Direct Ownership (Ark7): Investors purchase shares in individual, specific properties with full transparency into each asset
• Pooled REIT Model (Roots): Investors buy into a Real Estate Investment Trust that owns multiple properties with management discretion over asset selection
• DST Structure (1031 Crowdfunding): Investors purchase interests in Delaware Statutory Trusts designed specifically for 1031 exchange tax deferral

Key Benefits of Modern Real Estate Crowdfunding:

• Passive income generation through rental distributions without landlord responsibilities
• Portfolio diversification across real estate asset classes and geographic markets
• Lower capital requirements compared to traditional property purchases
• Professional property management handling tenant relations, maintenance, and operations
• Transparency and accessibility through digital platforms and regulatory compliance

For investors seeking direct control over their real estate investments with maximum accessibility, Ark7’s fractional ownership provides the optimal balance of transparency, affordability, and flexibility.

Ark7: Accessible & Transparent Fractional Real Estate Investing

Ark7 has redefined fractional real estate investing by combining the lowest industry entry point with individual property selection and zero ongoing fees. Unlike competitors that pool investor capital into blind REITs or require accredited investor status, Ark7’s SEC Regulation A+ qualified offerings are accessible to 100% of U.S. investors aged 18 and older.

Ark7’s Competitive Advantages:

• $20 minimum investment per share enables true accessibility for everyday investors
• Monthly cash distributions paid consistently on the 3rd of each month provide reliable passive income
• Zero annual AUM fees save investors $200-350 per $10,000 invested over 5 years compared to industry competitors
• Individual property selection across 10+ U.S. markets allows for customized portfolio construction
• Secondary market provides liquidity after a 12-month holding period

Performance and Reliability: Ark7 demonstrates consistent performance across its portfolio of 37 active properties. The platform has facilitated over $23 million in property value with $3.5+ million in dividends paid to investors.

User Experience Excellence: With a 4.7/5 App Store rating and 4.1/5 on Trustpilot, Ark7’s mobile app enables investors to discover properties, manage shares, and track dividends from their smartphones. The platform’s commitment to operational transparency ensures that all legal and financial disclosures are accessible 24/7.

Investment Process:

1. Browse curated properties across multiple U.S. markets
2. Purchase shares starting at $20 per property
3. Receive monthly distributions directly to your account
4. Monitor performance through the intuitive mobile app
5. Access secondary market liquidity after 12 months

Ark7’s mobile app enhances this experience by providing real-time portfolio insights, distribution tracking, and seamless property discovery—all designed to make real estate investing as convenient as stock trading.

Roots vs. Ark7: A Look at Fractional Ownership Models

While both Ark7 and Roots offer fractional real estate investing accessible to non-accredited investors, their fundamental approaches differ significantly in structure, control, and investor experience.

Structural Differences

Investment Structure:

• Ark7: Individual property shares
• Roots: Pooled REIT

Property Selection:

• Ark7: Investor chooses specific properties
• Roots: Management selects properties

Minimum Investment:

• Ark7: $20 per share
• Roots: $100

Distribution Frequency:

• Ark7: Monthly
• Roots: Quarterly

Annual Fees:

• Ark7: 0% AUM
• Roots: 0% AUM

Liquidity:

• Ark7: Secondary market after 12 months
• Roots: Quarterly (5% fund cap)

Geographic Focus:

• Ark7: 10+ U.S. markets
• Roots: Primarily Atlanta/Augusta

Roots’ Unique Strengths: Roots distinguishes itself through its “Live In It Like You Own It” social impact model, which rewards renters with equity-like benefits. The platform also boasts impressive historical performance with a 17.29% average annual return since inception and a 12.01% trailing return.

Why Ark7 Prevails for Most Investors

Despite Roots’ strong returns and social mission, Ark7’s advantages make it a compelling choice for many investors:

• Greater Control: Ark7 investors select specific properties rather than trusting management discretion with a pooled REIT
• More Frequent Income: Monthly distributions provide better cash flow management than quarterly payments
• Lower Entry Barrier: $20 minimum vs $100 makes real estate accessible to more investors
• Better Liquidity: Secondary market trading vs quarterly redemption with caps
• Geographic Diversification: Properties across 10+ markets vs primarily Southeast focus

For investors prioritizing portfolio control, consistent monthly income, and maximum accessibility, Ark7’s fractional model delivers strong value.

1031 Exchange Fundamentals: Deferring Capital Gains

A 1031 exchange, named after Section 1031 of the Internal Revenue Code, allows real estate investors to defer capital gains taxes when selling investment property by reinvesting the proceeds into “like-kind” replacement properties. This powerful tax strategy requires strict compliance with IRS rules:

• Like-Kind Requirement: Replacement property must be of the same nature or character (real estate for real estate)
• 45-Day Identification Period: Replacement properties must be identified within 45 days of selling the original property
• 180-Day Exchange Period: Replacement property must be acquired within 180 days of the original sale
• Qualified Intermediary: A third party must handle the exchange funds to maintain tax deferral eligibility
• Equal or Greater Value: Replacement property must be equal to or greater than the sold property’s value

Key Benefits of 1031 Exchanges:

• Tax Deferral: Defer capital gains taxes indefinitely through successive exchanges
• Wealth Preservation: Reinvest full sale proceeds rather than paying taxes upfront
• Portfolio Diversification: Exchange single properties for multiple replacement assets
• Estate Planning: Potential step-up in basis for heirs upon investor’s death

For investors who don’t qualify for or need 1031 exchanges, Ark7 provides an alternative that offers real estate exposure without the complexity and high barriers of tax-deferred exchanges.

Navigating 1031 Crowdfunding: An Alternative Approach

1031 Crowdfunding specializes in facilitating 1031 exchanges through Delaware Statutory Trusts (DSTs), offering institutional-grade commercial real estate opportunities for accredited investors. Founded in 2014 and headquartered in Irvine, California, the platform has facilitated over $2.1 billion in sales with 1,800+ completed transactions.

1031 Crowdfunding’s Core Features:

• Specialized 1031 Exchange Expertise: Professional guidance through complex tax-deferred transactions
• Institutional-Grade Properties: Access to $5M+ multifamily, senior housing, and commercial assets
• Superior Due Diligence: Industry-leading documentation with legal opinions and audited financials
• Accredited Investor Focus: Designed specifically for qualified investors with significant capital

Total Cost Comparison: Based on their fee structure, a $10,000 investment over 5 years with 1031 Crowdfunding could cost an estimated $875-$1,275, compared to just $300 for Ark7—making it 3-4 times more expensive.

While 1031 Crowdfunding excels at its specialized niche of tax-deferred exchanges for accredited investors, the platform’s high barriers and costs make it less accessible to everyday investors seeking real estate exposure. For these investors, Ark7’s fractional ownership provides an alternative with dramatically lower costs and barriers to entry.

Real Estate for Retirement: Ark7 IRA vs. Traditional Investments

Investors seeking to diversify their retirement portfolios with real estate have unique options through Ark7’s IRA investment capabilities. Unlike traditional retirement accounts limited to stocks, bonds, and mutual funds, Ark7 IRA accounts enable investors to hold tangible rental property shares within tax-advantaged retirement structures.

Ark7 IRA Advantages:

• Tangible Asset Ownership: Hold actual property shares rather than REIT stocks or paper assets
• Tax-Advantaged Growth: Traditional IRA deferrals or Roth IRA tax-free growth apply to real estate returns
• Long-Term Appreciation: Benefit from property value growth within retirement accounts
• Passive Income: Monthly rental distributions contribute to retirement cash flow
• Accessible Fees: $100 annual fee per property (capped at $400/year, waived for balances over $100,000)

Comparison with Competitors: While 1031 Crowdfunding also offers IRA compatibility, its $25,000-$100,000 minimums create significant barriers for retirement investors with limited capital. Roots’ IRA capabilities remain unclear, with no documented IRA investment options on their platform.

Strategic Retirement Benefits:

• Inflation Hedge: Real estate historically outperforms during inflationary periods
• Portfolio Diversification: Reduce stock market correlation in retirement portfolios
• Consistent Income: Monthly distributions provide reliable retirement cash flow
• Wealth Preservation: Tangible assets maintain value through market cycles

For retirement investors seeking accessible real estate exposure with transparent fee structures, Ark7’s IRA option provides the optimal balance of accessibility, diversification, and cost efficiency.

Evaluating Investment Platforms: Transparency and Fees

Fee structures and transparency significantly impact long-term investment returns, making these factors critical in platform selection. Ark7’s commitment to “no hidden fees, no surprise ever” stands in stark contrast to industry practices that often embed costs in complex fee structures.

Fee Comparison Analysis

Ark7:

• Initial Fees: 3% sourcing fee
• Annual AUM Fees: 0%
• Management Fees: 8-15% of rental income
• 5-Year Cost ($10K): $300

Roots:

• Initial Fees: $5 transaction
• Annual AUM Fees: 0%
• Management Fees: Embedded in REIT
• 5-Year Cost ($10K): $5 (no exit)

1031 Crowdfunding:

• Initial Fees: 5-9% upfront
• Annual AUM Fees: 0.75%
• Management Fees: Embedded in DST
• 5-Year Cost ($10K): Estimated $875-$1,275

Transparency Advantages

Ark7’s operational transparency includes:

• 24/7 Access: Complete legal and financial disclosures available anytime
• Individual Property Details: Full transparency into each specific asset
• Monthly Performance Reports: Regular updates on occupancy and distributions
• Regulatory Compliance: SEC Regulation A+ qualification with FINRA-registered broker-dealer

User Satisfaction Metrics:

• 4.1/5 Trustpilot rating (240+ reviews)
• 4.7/5 App Store rating (1,300+ ratings)
• BBB A- rating (Accredited Business)

For investors prioritizing fee efficiency and operational transparency, Ark7’s commitment to accessible, honest pricing provides significant long-term advantages over competitors with embedded or recurring fees.

Beyond the Basics: Advanced Investment Strategies with Real Estate

Sophisticated investors can leverage Ark7’s platform for advanced real estate investment strategies that maximize returns and minimize risk through strategic portfolio construction.

Geographic Diversification Strategy

Ark7’s properties across 10+ U.S. markets enable investors to diversify across different economic cycles, job markets, and housing demand patterns. Current markets include:

• Sunbelt Growth Corridors: Atlanta, Dallas, and Tampa markets with strong population and job growth
• Established Metropolitan Areas: Access to stable, mature rental markets
• Emerging Opportunity Zones: Properties in neighborhoods with significant appreciation potential

Property Type Diversification

Investors can build portfolios combining different property types:

• Single-Family Homes: Stable, long-term tenant relationships with lower maintenance complexity
• Townhomes: Modern amenities with efficient maintenance and strong rental demand
• Multi-Family Properties: Economies of scale with multiple income streams per asset

Income vs. Appreciation Focus:

• Income-Oriented Properties: Select assets with higher current yields for immediate cash flow
• Growth-Oriented Properties: Choose markets with strong appreciation potential for long-term wealth building
• Balanced Approach: Combine both strategies for comprehensive portfolio performance

Liquidity Management Strategy

Ark7’s secondary market availability after 12 months enables strategic liquidity management:

• Staggered Investments: Time purchases across different properties to create rolling liquidity windows
• Emergency Access: Maintain access to capital through secondary market sales when needed
• Portfolio Rebalancing: Adjust allocations based on changing market conditions or personal circumstances

Technology-Enabled Investing

The Ark7 mobile app provides sophisticated portfolio management tools including:

• Real-time performance tracking across all properties
• Distribution history and projection analytics
• Market insights and property updates
• Seamless reinvestment of monthly distributions

For investors seeking to implement sophisticated real estate strategies without the complexity of direct property ownership, Ark7’s platform provides the perfect combination of control, transparency, and accessibility.

Frequently Asked Questions

How does investing in real estate through Ark7 work?

Investing through Ark7 involves selecting specific rental properties from their curated marketplace, purchasing shares starting at $20 per property, and receiving monthly cash distributions on the 3rd of each month. Ark7 handles all property management responsibilities including tenant relations, maintenance, and operations, while investors maintain full transparency into their specific assets through the mobile app. After a 12-month holding period, investors can access secondary market liquidity if needed.

Can I use my IRA to invest in real estate?

Yes, Ark7 offers IRA capabilities through partnership with Inspira Financial Company as the custodian. Investors can open Traditional or Roth IRA accounts and use retirement funds to purchase shares in specific rental properties, benefiting from tax-advantaged growth while holding tangible real estate assets. The annual custodian fee is $100 per property (capped at $400 per year) but is waived for accounts with balances over $100,000.

Is Ark7 a regulated investment platform?

Yes, Ark7 operates under strict regulatory oversight as an SEC Regulation A+ qualified offering with Dalmore Group LLC serving as the FINRA and SIPC registered broker-dealer. All offerings are qualified by the Securities and Exchange Commission, ensuring investor protections and regulatory compliance. The platform maintains an A- BBB rating as an accredited business and provides full transparency through 24/7 access to legal and financial disclosures.