Real Estate Investment Trusts (REITs) have long served as the default entry point for investors seeking real estate exposure without buying property outright. But REITs come with trade-offs. REITs are companies, trusts, or other entities that own or finance qualifying real estate and elect REIT tax treatment. Some trade on public exchanges, while others are nontraded or privately offered. In each case you own a security issued by the REIT, not an asset-specific interest in a particular building, and REIT shareholders generally do not receive direct property-level depreciation deductions.
REIT distributions are also more varied than they are often described. A single distribution may be characterized as ordinary dividends, capital-gain distributions, or nondividend return of capital, and qualified REIT dividends may be eligible for the Section 199A deduction, subject to applicable rules and limitations. For investors who want asset-level selection, transparent property economics, and pass-through tax reporting tied to a specific home, fractional real estate investing offers a compelling path forward.
This guide examines seven platforms investors commonly evaluate as alternatives to REITs. It starts with mogul, a fractional real estate platform club founded by former Goldman Sachs executives that delivers institutional-quality single-family rental investments to everyday investors.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Key Takeaways
Structure, not branding, determines tax treatment: Pass-through depreciation requires a property-owning entity taxed as a partnership or other qualifying pass-through and the corresponding investor tax reporting. Among the platforms reviewed here, Arrived's property series intend to elect REIT taxation and Ark7's current series have elected C-corporation taxation, while mogul describes its property entities as taxed as partnerships with annual Schedule K-1 reporting.
Eligible depreciation can offset taxable rental income, but the usable amount varies: Basis, at-risk, excess-business-loss, and rental-loss limitation rules can all affect an investor's ability to use reported losses and deductions, as explained in the IRS instructions for Schedule K-1 (Form 1065) and Schedule E.
Distribution frequency is a cash-flow feature rather than a return promise: Monthly distributions provide more frequent cash flow than quarterly distributions and may support more frequent reinvestment, but frequency alone does not establish higher total returns. Arrived now pays monthly on income-generating individual properties, while Fundrise-managed funds generally distribute quarterly.
Institutional underwriting is now accessible to retail investors: mogul states that fewer than 1% of the thousands of opportunities it reviews pass a process that includes market screening, financial analysis, inspections, appraisals, third-party diligence, and investment-committee review.
First $10k protection for new members: mogul covers up to $10,000 in losses for new members on investments made within their first 7 days, subject to the program's terms.
1. mogul
mogul delivers institutional-quality fractional real estate investing through property-specific investment-club LLCs that own individual single-family rentals. Founded by former Goldman Sachs executives with more than $10 billion in collective real estate investing experience, the platform brings the same rigor applied to institutional acquisitions to professionally vetted and managed properties, with an average investment of about $10k.
How mogul Works
mogul acquires income-generating residential properties, places each into a state-registered property-owning entity, and offers ownership through an investment-club LLC structure. Investors purchase membership interests tied to a specific property rather than shares in a blind pooled fund. Investors do not ordinarily hold direct individual title to the home, but they receive:
Monthly rental payouts once a property is operational and generates distributable net rental income. Amounts vary with property performance.
Annual Schedule K-1 reporting, with property LLC income, expenses, and depreciation passed through to investors. Residential depreciation is generally calculated over a 27.5-year schedule and may offset some or all rental income, though the timing and value of any benefit depend on the offering and the investor's individual tax circumstances. Here is more on how depreciation works in real estate.
Ownership-weighted governance rights on significant property decisions, with routine matters handled by licensed property managers and larger expenditures generally requiring a vote.
Proportional participation in net sale proceeds, subject to the applicable operating agreement and owner-approval process. mogul's How It Works page and current documentation describe a typical hold of five to seven years within a broader three to ten year range.
The platform handles sourcing, diligence, financing coordination, and day-to-day property management. Investors do not field tenant calls or coordinate repairs, which is how mogul makes real estate investing more accessible and headache-free.
Performance and Member Metrics
mogul reports an 18.8% average annual IRR across its portfolio and a record monthly yield of 2.6% reported as of June 1, 2026. mogul has $40mm+ of assets on the platform, 13,000+ investors, and more than 65 properties under management. Member behavior reinforces the experience: 90% of mogul investors invest a second time, and when they do, it is typically 3x their first investment.
Member Protection and Rewards
mogul offers first $10k protection for new members. If the total return on your first 7 days of investments is a loss of $10,000 in the first year, mogul covers up to $10,000 of that loss with its own balance sheet capital, subject to the program's terms.
Members can also refer a friend and get $50 when that friend invests, under the referral program terms. Community features like mogul Clubs distribute up to 2% in rewards to members.
Selection Standards
mogul states that fewer than 1% of reviewed properties pass its diligence process. The company invests its own capital in every property offered, aligning management interests with member returns. This co-investment model means the team has capital at risk alongside members.
mogul focuses on single-family rentals operated across mid-term and short-term rental strategies in high-growth secondary markets with strong price-to-rent dislocation, including Charlotte, Atlanta, Nashville, Phoenix, Houston, Dallas, and Denver. Target properties fall in a $500k to $2mm strike price range and are frequently sourced off market at 8% to 10% below market value with verified operating actuals, which is where much of the underwriting advantage is created.
Fee Structure
mogul's homepage and How It Works page describe a one-time fee of up to 5% capitalized into the property's initial deal structure rather than billed separately out of pocket. Its legal terms specify a 3% fee at closing plus a potential additional 2% setup fee where a property requires extra setup. mogul also states that it collects 2.5% of rental income and does not charge a traditional recurring AUM fee calculated on invested equity. Applicable fees are detailed in each offering's documents.
Ownership Records on Avalanche
mogul records ownership information on the Avalanche network, allowing investors to review ownership records through Snowtrace, with wallet infrastructure provided by Fireblocks. Using blockchain, mogul reduces operational costs and lowers fees, and members need no blockchain knowledge to participate. Property valuations, rental distributions, and performance information are presented through mogul's dashboard.
Best For: Investors seeking property-specific single-family rental exposure with monthly payout cadence, partnership-style K-1 reporting, governance rights, and loss protection on their first investments. Use mogul's free investment property calculator to analyze any U.S. address, or browse available properties on the platform.
2. Arrived
Arrived offers investments connected to individual single-family homes and vacation rentals. As of November 6, 2025, Arrived reported that more than 885,000 investors had signed up and more than $300 million had been invested across over 550 properties in 65 cities.
Core Features
$100 minimum investment for accessible entry
Property-specific series securities: Investors purchase securities issued by a property-specific series of a Delaware series LLC that owns the home. Investors do not hold deeded title, and each series intends to elect and qualify as a separate REIT for federal tax purposes rather than partnership pass-through taxation.
Monthly dividend distributions: Income-generating individual properties and Arrived's current funds generally pay or expect to pay dividends monthly, although the first payment may be delayed while a property is leased or capital is deployed.
Both long-term and vacation rental property options
Secondary market: Arrived launched a peer-to-peer secondary market in 2025, with trading during applicable windows.
Investment Approach
Arrived acquires properties and handles sourcing and operations through its management structure. Investors may participate economically in rental distributions and net sale proceeds.
Fee Structure
Arrived's fees are offering-specific. Relevant filings disclose a 3.5% sourcing fee, ongoing asset-management compensation including a disclosed 0.6% annual figure in the cited offering, property-management economics, possible offering-expense reimbursement, and disposition-related expenses. Fee schedules can differ by issuer and series, so total estimated fees and net returns for equivalent properties are more informative than headline percentages applied to different bases.
Best For: Investors wanting property-specific fractional exposure at a $100 minimum who do not require partnership-style depreciation pass-through, since the series intend to elect REIT taxation.
3. Lofty.ai
Lofty.ai uses blockchain-based tokens and smart contracts for real estate ownership, with daily income distributions and an always-open peer-to-peer secondary market. Its protocol was initially deployed on Algorand and, under its 2026 terms, can operate across multiple public blockchain networks.
Key Features
$50 minimum investment for entry
Daily rental income distributions, among the more frequent payout schedules offered by fractional real-estate platforms. Lofty states that rental income is distributed daily after relevant property expenses.
Always-open peer-to-peer marketplace for submitting buy and sell orders
Property-specific investor-owned LLCs with investor governance, per Lofty's 2026 platform disclosures
USDC settlement through blockchain smart contracts on the marketplace
Liquidity Considerations
Investors can submit orders through an always-open peer-to-peer market, where execution time and sale price depend on available buyers and market conditions.
Fee Considerations
Lofty charges 2.5% on purchases and 3% on sales, which the company describes as roughly a 5.5% round-trip cost before considering any change in the share price. The exact economic cost can differ because the two fees apply to different transaction values. Lofty states that it charges no AUM fee.
Best For: Investors prioritizing daily distributions and order-book access who are comfortable with blockchain-based platforms and round-trip transaction costs.
4. Ark7
Ark7 provides property-specific series securities in rental properties with a low per-security entry point and a transfer mechanism that may become available after a 12-month hold.
Platform Highlights
Offering-specific minimums: Ark7's June 2026 offering circular lists current series interests at $20 per security with a minimum investment of one series interest. Older or other series have been priced differently, including at $100.
Monthly dividend distributions from rental income
Property-specific series securities: Investors acquire series interests in a property-owning series. They do not personally hold deeded title.
C-corporation tax treatment: Under the same offering circular, the current series have affirmatively elected to be taxed as C corporations. The series pay corporate tax on their income and distributions from earnings and profits are generally treated as dividends, so property depreciation is not passed through to investors on a partnership K-1.
Transfer mechanism after 12 months: Ark7 describes PPEX as an alternative trading system operated within the broker-dealer regulatory framework. Its filing states that transfers are subject to a 12-month holding period and written consent from the managing member.
Fee Structure
Ark7 fees vary by series. Its offering circular discloses a sourcing fee of no more than 3% of the offering size for the identified series and an asset-management fee of up to 15% of free cash flow available for distribution, with a 15% fee for the specifically identified current series. Free cash flow is calculated after specified income and expense adjustments and is not the same base as gross rental income. No annual AUM fee applies to holdings.
Best For: Investors seeking a very low entry point for property-specific exposure who do not require depreciation pass-through and are comfortable with transfer restrictions.
5. Fundrise (Fund-Based, Not Direct Ownership)
Fundrise does not satisfy this guide's direct-ownership test. It is included because investors frequently compare it, and its investors generally own interests in pooled investment vehicles rather than asset-specific ownership interests.
As of March 31, 2026, Fundrise reported $3.4 billion in AUM, more than 402,000 active investor accounts, and approximately 2.411 million active users. The platform offers a $10 minimum to start investing in its current Flagship Fund access.
Important Distinction
Fundrise uses a fund-based structure rather than property-specific ownership. Investors own shares in diversified portfolios managed by Fundrise, not fractional interests in specific properties. This means:
No individual property selection: managers choose the portfolio
Fund-level tax reporting: Investors generally own fund shares rather than receiving property-level partnership deductions. Fundrise's own disclosure says fund distributions may consist of ordinary dividends, capital gains, and nondividend distributions, and the character varies by fund and year.
Quarterly distributions: Fundrise-managed funds generally make quarterly distributions. Liquidity and redemption provisions vary by vehicle.
Track Record
In its Q1 2026 investor letter, Fundrise said it launched with its mission almost 15 years ago and referred to more than 15 years running the business, giving it a long operating record across multiple market cycles.
Returns vary by fund and period rather than following a single platform-wide range. As of June 30, 2026, Fundrise reported that its Flagship Fund returned 6.39% over the preceding 12 months, 0.93% annualized over five years, and 1.23% since inception, while its Income Fund returned 9.11% over the preceding 12 months and 7.81% since inception.
Best For: Investors prioritizing a low entry minimum and a diversified, hands-off fund approach who do not require property-specific ownership or partnership depreciation reporting.
6. EquityMultiple (Mixed Structures)
EquityMultiple provides accredited investors with online access to private commercial real estate equity, preferred equity, debt, notes, and fund opportunities. Only selected property-level equity or syndication offerings fit a direct-ownership comparison. Its notes, debt instruments, and diversified funds do not, since debt investors are creditors and fund investors own fund interests.
Focus Areas
Commercial real estate including multifamily, industrial, and office
Accredited investors only: EquityMultiple confirms it accepts accredited investors. Eligibility may be based on income, net worth, specified professional credentials, or qualifying entity status under SEC rules.
Product-specific minimums: EquityMultiple has stated that investors could participate starting at $5,000, though the $5,000 products shown include short-term notes or debt funds. Individual property-equity offerings may require substantially more.
Mixed tax reporting: EquityMultiple's guidance says LLC SPV investments may issue K-1s while certain non-LLC dependent-note investments issue Form 1099-INT.
Investment Approach
EquityMultiple offers both equity investments in properties and real estate debt instruments, with returns and timelines varying by investment and structure.
Best For: Accredited investors seeking commercial real estate exposure beyond single-family residential, where minimums are higher, hold periods are longer, and offerings span a range of structures.
7. RealtyMogul (REITs and Private Placements)
RealtyMogul was founded in 2012 and has operated for approximately 14 years. Its two specifically discussed retail products are REITs, which do not qualify as REIT alternatives under this guide's test. Its private placements are the portion of its lineup that can offer property-level equity exposure.
Platform Structure
Historical $5,000 REIT minimum: A 2025 offering document supports a $5,000 minimum for the relevant REIT offering. Offering availability changes over time.
Deal-specific private-placement minimums: These are offering-specific and often begin around $25,000 or more. The platform presents multiple investment structures, so a single universal threshold does not apply.
Commercial and multifamily property focus
Variable distribution schedules: Distribution cadence depends on the specific REIT or private placement, may be monthly, quarterly, or otherwise structured, and is generally subject to board or manager authorization.
Recent Developments
RealtyMogul underwent a change of control effective November 6, 2025, through a merger of Realty Mogul, Co. into RM Investor, LLC, which is managed by The Wideman Company and owned by RM Venture Partners LLC. RealtyMogul described the transaction as an acquisition by The Wideman Company alongside a strategic investor group.
Liquidity terms vary across the lineup, since REITs and private placements operate under separate provisions.
Best For: Investors with higher capital seeking commercial real estate access through an established platform.
Why mogul Stands Out for REIT Alternatives
Goldman Sachs Pedigree with Retail Accessibility
mogul's founding team brings institutional-grade expertise to retail investors. mogul reports more than $10 billion in collective real estate investing experience, and co-founder Joey Gumataotao grew Goldman Sachs' single-family rental platform from $0 to $1 billion in under 12 months with three individuals. The team applies a documented process that includes market screening, financial analysis, inspections, appraisals, third-party diligence, and investment-committee review, and mogul states that fewer than 1% of reviewed opportunities make it through.
Returns Across Asset Classes
Drawing on Fed historical mortgage rates, the Case-Shiller Home Index, NAREIT performance, and Bloomberg public market data, mogul's comparison of annual returns from 1993 to 2025 shows mogul at 18.8%, single-family rentals at 13.8%, the S\&P 500 at 9.8%, REITs at 9.3%, gold at 5.7%, and corporate bonds at 5.2%. Those figures do not factor in the tax benefits of the underlying asset class. Here is more on why real estate is the world's largest wealth generator, and on how IRR is measured.
Partnership-Style Tax Reporting Tied to a Specific Home
This is the structural difference that sets mogul apart in the category. mogul describes its property entities as taxed as partnerships, with income, expenses, and depreciation passed through to investors on an annual Schedule K-1. By comparison, Arrived's series intend to elect REIT taxation and Ark7's current series have elected C-corporation taxation, neither of which passes property depreciation through to individual investors.
Depreciation may offset some or all rental income, but the timing and value of any tax benefit depend on the offering and the investor's individual tax circumstances, including rental-loss limitations, basis and at-risk limitations, depreciation recapture, and state taxes. mogul does not provide tax advice, and investors should consult qualified professionals. Learn more about the tax benefits of real estate investing.
Monthly Cash Flow Cadence
Once a property is operational and generates distributable net rental income, mogul generally makes proportional rental payouts monthly. The combination of monthly dividends, real-time appreciation, and tax benefits is the core of the member experience, and monthly payouts may provide more frequent opportunities to reinvest than quarterly payouts.
First $10k Protection for New Investors
mogul covers up to $10,000 in losses on investments made within your first 7 days if those investments show a loss after year one, subject to the program's terms. This lowers a common barrier for first-time investors concerned about market timing.
Risk Management Built Into Every Property
mogul capitalizes reserves at the property level, including 12 months of operating reserves per asset, and capitalizes future maintenance, vacancies, insurance payments, and closing costs. It carries property and business interruption insurance, so market rent can continue to be received while a property is being repaired. It also creates economies of scale with inventory partners and obtains wholesale discounts with property management companies, and uses blockchain to reduce operational costs and lower fees.
Verifiable Ownership Records
Through its Avalanche network integration, mogul records ownership information on chain and lets investors inspect those records through Snowtrace, with wallet infrastructure provided by Fireblocks. Property valuations, rental distributions, and performance information are reported through mogul's dashboard.
Aligned Incentives
mogul invests its own capital in every property alongside members. This co-investment model creates accountability and keeps the team's outcomes tied to member outcomes.
For investors ready to move beyond REITs into property-specific residential ownership, mogul combines institutional experience, partnership-style K-1 reporting, governance rights, and member protection in a package designed for building long-term wealth through real estate.
Disclaimer: The information provided in this guide is for educational purposes only and does not constitute financial, tax, or legal advice. Always consult with a licensed professional before making any financial or investment decisions.
Frequently Asked Questions
What are the main differences between investing in REITs and property-specific fractional ownership?
REITs are companies, trusts, or other entities that own or finance qualifying real estate and elect REIT tax treatment. Some trade on public exchanges, while others are nontraded or privately offered. You own a security issued by the REIT, not an asset-specific interest in a particular building. Property-specific platforms like mogul let you hold membership interests in an entity that owns one identified home. The key differences are tax reporting (partnership pass-through with K-1 reporting versus REIT distribution characterization, which may include ordinary dividends, capital-gain distributions, or return of capital), asset-level selection, and asset-level transparency versus portfolio reporting. Selecting a security is also not the same as operating a property. With mogul, licensed property managers handle leasing, maintenance, and day-to-day operations, while members hold ownership-weighted voting rights on significant property decisions as set out in the governing documents.
How does fractional real estate ownership work, and is it truly hands-off?
Fractional platforms use materially different legal and tax structures, including property-specific LLC or series interests, partnership SPVs, corporations, REITs, funds, and debt securities. The issuer, underlying asset ownership, tax election, voting rights, and tax form differ from one offering to the next. On the operational side, mogul handles sourcing, diligence, financing coordination, property management, and tenant coordination, so investors do not field tenant calls or coordinate repairs. mogul also capitalizes operating reserves at the property level, holding 12 months of operating reserves per asset to cover debt service and fixed costs, and carries property and business interruption insurance so that market rent can continue to be received while a property is repaired. The mogul help center covers the mechanics in more detail.
Are there risks associated with fractional real estate investing, and how are they mitigated?
Real estate investments carry risks including vacancy, market movement, and illiquidity, as covered in this overview of real estate investing risks. mogul addresses these through selective underwriting, professional management, prefunded reserves of 12 months of operating costs per asset, property and business interruption insurance, economies of scale with inventory partners, and co-investment in every property. It also offers up to $10,000 in loss protection for qualifying new member investments. Holding positions across multiple properties further reduces single-asset concentration.
Can international investors participate in platforms offering U.S. fractional real estate?
Some platforms permit certain non-U.S. investors, subject to platform eligibility, securities laws, tax-identification requirements, sanctions screening, withholding, and cross-border tax rules. Eligibility across the category commonly depends on tax identification and, for some offerings, accredited-investor status. mogul's public materials reference international users and international payment use cases, and its platform is currently built for investors located in the United States, which its Terms of Service reflect. Non-U.S. persons interested in mogul can book a call with the team and obtain jurisdiction-specific legal and tax advice.
How do platforms like mogul provide liquidity for fractional real estate investments?
mogul says a secondary market is under development and currently marks it "coming soon." The proposed feature would permit eligible investors to sell shares at a fair market value informed by third-party appraisal-level data calculated monthly. Until then, investments are held through the property's lifecycle, which mogul's documentation describes as typically five to seven years within a broader three to ten year range. This overview of liquidity in real estate investing adds helpful context. Across the wider category, approaches differ. Some platforms operate peer-to-peer marketplaces where execution and pricing depend on available buyers, some permit transfers through an alternative trading system after a holding period and with managing-member consent, and others rely on periodic trading windows.