Real estate has long been the cornerstone of wealth building for high-net-worth individuals and institutional investors. mogul's analysis of the 1993 to 2023 period reports that single-family rentals delivered a 13.8% IRR versus 9.8% for the S\&P 500, and that across a 30-year hold an allocation to single-family rentals rather than the S\&P 500 has on average returned approximately 190% more cumulatively with 45% less volatility.
Yet for most investors, the traditional path has remained out of reach: buying an investment property outright can require a substantial cash down payment, with the required amount depending on the property's price, unit count, financing, and borrower qualifications. Fannie Mae's April 2026 eligibility matrix, for example, allows maximum purchase LTVs of 85% for a one-unit investment property and 75% for a 2 to 4-unit investment property, subject to applicable underwriting requirements. Add the reality of fielding tenant calls at 3 AM, and direct ownership stops being practical for most people.
The good news: you no longer need to buy an entire property to access institutional-quality real estate exposure. A new generation of fractional real estate platforms allows investors to build diversified property portfolios in a headache-free way. From property-specific LLC membership interests to REIT ETFs and real estate debt notes, each approach offers distinct advantages depending on your investment goals, timeline, and risk tolerance.
This guide examines seven ways to invest in real estate without purchasing property outright, starting with mogul, a fractional real estate platform club founded by former Goldman Sachs executives that reports an 18.8% average IRR across its portfolio of income-generating residential properties.
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
Ownership structure is the biggest differentiator: Platforms like mogul offer membership interests in a property-specific LLC that owns an identifiable home, with pass-through tax reporting. Tax treatment depends on the vehicle: some partnership-structured pooled investments can pass through deductions on Schedule K-1, while REIT shareholders generally do not directly claim the underlying property's depreciation.
Fee structures are not directly comparable across product types: An ETF expense ratio, a fund-level asset management fee, per-transaction fees, note-level investor fees, and asset-level operating expenses are different analytical concepts. VNQ carries a 0.13% expense ratio; RealtyMogul's Income REIT applies a 1% annualized asset management fee based on total equity value; Groundfloor's current Notes materials describe no investor fees for those Notes; and mogul applies a capitalized upfront fee plus an ongoing fee on collected rental income rather than a recurring AUM fee.
Return metrics are not interchangeable: IRR, trailing total return, annualized distribution yield, fixed note coupons, and ETF year-to-date returns measure different things. They should be compared like-for-like, never ranked against one another.
Liquidity terms vary widely: Private real estate products and exchange-traded REIT ETFs operate under different liquidity structures. Return potential and realized performance vary independently of liquidity and should be evaluated on a consistent basis.
Risk mitigation features matter for new investors: mogul's $10,000 loss protection on first-week investments is a distinguishing feature among the options in this comparison.
1. mogul: Property-Specific LLC Ownership
mogul delivers fractional exposure to individual income-generating residential properties through property-specific LLC structures. Founded by former Goldman Sachs executives with a reported $10 billion-plus in collective deal experience, the platform brings institutional-grade underwriting to individual investors.
How mogul Works
When you invest through mogul, you purchase membership interests in a property-specific LLC that owns an identifiable home, not shares in a pooled fund. Each property is purchased by mogul, placed into a state-registered LLC, and fractionalized into shares, with the LLC structure delivering property-level economic and governance rights. This structure provides:
Monthly distributions of net rental income: Once a property is operational and has distributable cash flow, mogul generally distributes each investor's proportional share of net rental income monthly, calculated after applicable expenses, fees, and reserves. Amounts reflect actual operating performance.
Pass-through tax reporting: mogul's property LLCs use pass-through tax treatment, generally providing investors with a Schedule K-1 reflecting their share of income, expenses, and depreciation. Property-level tax benefits may reduce taxable rental income, with treatment depending on basis, at-risk limitations, participation, income, and each investor's circumstances.
Governance rights that are generally ownership-weighted, with significant decisions subject to owner voting
Participation in appreciation and sale proceeds: mogul describes a broad intended holding range of 3 to 10 years, with approximately 5 to 7 years typical. The specific offering documents govern.
Performance and Protection
mogul reports an 18.8% average IRR across its portfolio, along with a record monthly yield of 2.6% as of June 1, 2026. Its current underwriting targets are approximately 10% to 12% levered yield for short-term rentals, 12% to 14% for mid-term rentals, and 11% to 13% on a weighted-average basis. These are underwriting targets and vary by property. mogul currently identifies Phoenix, Houston, and Dallas among its targeted high-growth secondary markets, subject to inventory changing over time.
What sets mogul apart is its $10,000 loss protection for new members. If investments made within your first seven days result in a net loss after one year, mogul covers up to $10,000 from its own balance sheet capital.
Fee Structure
mogul does not charge a traditional recurring AUM fee on invested principal. Its current disclosed structure includes a 3% capitalized platform fee, a conditional 2% property setup or rent-ready fee where applicable, and an ongoing 2.5% fee on collected rental income. mogul's offering-specific documents govern in every case.
For context on the AUM question specifically: on a constant $10,000 balance, a hypothetical 1% to 1.25% annual AUM fee would total $500 to $625 over five years before considering changes in asset value. mogul does not apply that AUM charge; its structure instead uses capitalized upfront fees and an ongoing fee on collected rental income. Total comparative cost depends on rental income, conditional setup fees, capitalization, holding period, and other costs.
Technology and Transparency
mogul records ownership information tied to property-specific LLC interests on the Avalanche blockchain, using Fireblocks infrastructure, with records investors can independently verify. These blockchain records supplement conventional LLC, operating-agreement, and property-title documentation rather than replacing the underlying legal structure, and investors separately receive legal ownership documentation. The platform also offers a free investment property calculator that analyzes potential returns for any U.S. address.
Best For: Investors seeking property-specific residential exposure with institutional underwriting return targets, monthly income potential, and pass-through tax reporting across an intended 3 to 10-year hold.
2. Vanguard VNQ: REIT ETF With Daily Exchange Liquidity
The Vanguard Real Estate ETF (VNQ) provides broad exposure to U.S. real estate by owning a portfolio of publicly traded REITs and other qualifying real estate companies. Vanguard's 2026 profile reported $69.8 billion in fund total net assets and $37.0 billion in VNQ share-class net assets as of May 31, 2026, with daily trading volume in the millions of shares. VNQ offers daily exchange-traded liquidity.
Key Features
Diversification: 145 stocks as of May 31, 2026 across office, retail, residential, and specialty property types (its benchmark held 143 constituents on the same reporting date)
Daily liquidity: Buy or sell during market hours with no redemption restrictions
Low costs: 0.13% expense ratio
Low minimum: Vanguard's 2026 page lists a $1 minimum investment
Quarterly distributions: VNQ pays quarterly, and yield measures vary by calculation methodology
Performance Context
Vanguard reported VNQ year-to-date returns of 12.05% on a market-price basis and 12.09% on a NAV basis as of July 6, 2026. VNQ's 2025 market-price total return was 3.26%. These figures are total returns over the stated periods and are not comparable to IRR targets, note coupons, or distribution yields quoted elsewhere in this article. VNQ provides real estate exposure through daily exchange trading.
Structure and Tax Reporting
Because VNQ is exchange traded and invests in publicly traded real estate securities, its market price reflects public-market pricing and sentiment. Vanguard's 2026 profile reported a beta of approximately 0.91 and R-squared of approximately 0.55 against the Dow Jones U.S. Total Stock Market Index for the period shown. Investors receive 1099-DIV tax reporting rather than the pass-through K-1 reporting available through property-specific LLC structures, and the character of those distributions varies: Vanguard's 2026 Form 8937 for VNQ documents a non-taxable return-of-capital component in certain 2025 distributions.
Best For: Investors prioritizing daily liquidity and broad public-market diversification, or those using real estate as a portfolio allocation alongside stocks and bonds.
3. Fundrise: Automated Diversification
Fundrise operates private real estate funds and eREITs accessible to both accredited and non-accredited investors. Fundrise reports more than 385,000 investors.
Core Offerings
eREITs: Diversified portfolios of commercial and residential properties
Income Fund: Focuses on real estate credit for yield-oriented investors
Flagship Fund: Core equity portfolio targeting appreciation
Entry Point and Fees
Fundrise offers a $10 minimum investment, making it accessible to beginners. The platform charges 0.15% advisory plus a 0.85% real estate fund fee. At a constant $10,000 balance and a constant 1% annual fee, the arithmetic would equal $500 over five years, though real fee dollars change as account value and allocations change.
Recent Developments
Fundrise reports average annual returns of advisory client accounts of 6.24% in 2025 and 5.75% in 2024. These are advisory client account figures rather than the individual or aggregate performance of its Regulation A funds, so they are not the returns of a specific Fundrise real estate fund.
Fundrise Equity REIT also ceased to exist as a separate entity when it merged into Fundrise eREIT on April 29, 2026, with Fundrise eREIT surviving. Current liquidity therefore reflects the surviving Fundrise eREIT's redemption terms rather than any prior Equity REIT program status.
Best For: Beginning investors seeking automated, diversified real estate exposure with minimal active management required.
4. Roots REIT: Community-Focused Investing
Roots operates a private REIT focused on single-family rental properties with a workforce-housing and community impact angle. As of its July 10, 2026 update, Roots reported approximately $134.3 million in net asset value across 626 properties, and its current website reports 31,800-plus investors.
Investment Structure
Private REIT: Non-traded shares with quarterly liquidity, subject to program limits
Focus: Workforce housing and community-oriented residential properties
Minimum: $100
Distributions: Quarterly
Returns and Fees
Roots reports an 85.30% total return since inception and a 12.01% trailing 12-month return for July 10, 2025 through July 10, 2026. Roots describes that trailing figure as a total return incorporating its investment performance, not a dividend yield.
On fees, Roots charges $5 for each one-time investment and $3 for each recurring investment, subject to any current fee-waiver program. Roots also currently advertises a Roots Growth option with no transaction fees. There is no ongoing AUM charge at the investor level.
Redemption Terms
Quarterly liquidity is available subject to program limits. Redemptions within an investment's first 12 months incur an 8% early-withdrawal penalty, which drops to 0% after one year. This structure encourages longer holding periods while providing periodic liquidity.
Best For: Investors interested in residential real estate with a community impact focus who prefer a REIT structure over property-specific ownership.
5. Groundfloor: Short-Term Real Estate Debt
Groundfloor offers real estate debt exposure through two distinct product families: Notes and Individual Loans. The platform reports more than $2.2 billion in real estate loans originated.
How It Works
Notes are Groundfloor's fixed-income products. Current advertised rates run 5% to 8.5%, with terms and minimums varying by Note. Minimums for the core Notes currently range from approximately $100 to $1,000 depending on the product, and Groundfloor's current Notes materials describe no investor fees for those Notes.
Individual Loans are separate: investors select specific short-term real estate loans, typically funding residential renovation projects, with a $10 minimum per loan. Returns come from interest as borrowers repay.
Groundfloor also runs periodic offerings separate from its core Notes and Individual Loans. Its August 2026 Bond Note advertises 9.5% annualized over a six-month term and is available to accredited investors only.
Risk Considerations
Groundfloor products are debt instruments, meaning returns come from interest payments rather than property appreciation, and depend on borrower repayment.
Best For: Investors seeking short-term debt exposure with higher stated rates than traditional fixed income, who understand the credit risk involved in construction lending.
6. RealtyMogul: Commercial Real Estate Access
RealtyMogul provides access to commercial real estate through non-traded REITs and individual private placements. The platform has offered properties with over $8 billion in total value, and a RealtyMogul article published in August 2026 states 280,000-plus platform members.
Investment Options
Income REIT: Diversified commercial portfolio targeting current income
Apartment Growth REIT: Focused on multifamily appreciation
Individual Deals: Direct private placements, accredited investors only
Fees and Minimums
The Income REIT's asset management fee is 1% annualized based on total equity value. Its 0.5% servicing fee applies specifically to certain performing loans and preferred equity investments rather than as a blanket charge against the entire investor account, and variable operating reimbursements and other fees also apply. The Apartment Growth REIT uses a different fee schedule.
Both REITs list a $5,000 minimum. On availability, the Income REIT is paused for new investors while its offering circular is refreshed, and the Apartment Growth REIT is likewise paused for new investors as of August 2026.
Recent Performance
The Income REIT's distribution rate was approximately 1.5% annualized in Q2 2026. Its stated NAV and purchase-price basis was $7.49 for April and May 2026, moving to $6.85 effective June 1, 2026. Both RealtyMogul REITs suspended their share-repurchase programs effective April 21, 2026, with the Apartment Growth REIT suspending on the same date, citing preservation of liquidity and financial flexibility during portfolio transition.
Best For: Investors seeking commercial real estate asset classes beyond single-family residential, noting that RealtyMogul's individual private placements are accredited-investor-only while its Regulation A REITs have historically permitted qualifying non-accredited investors. Both REIT offerings are currently paused to new investors as of August 2026.
7. Concreit: Mobile-First Non-Traded REIT
Concreit offers app-based access to real estate through Concreit Fund I, a non-traded vehicle that has elected REIT treatment. Investors purchase Investor Shares in the fund rather than individual debt instruments. As of December 31, 2025, the fund held 24 secured loans and three private equity investments, and its offering documents permit a broader set of real estate investments. The portfolio is therefore substantially exposed to real estate credit, but the investor's holding is an equity security in the fund.
Platform Features
Minimum: One Investor Share, priced at $0.96 as of July 1, 2026
Frequent distributions: The July 2026 supplement shows distributions paid on several weekly payment dates
Mobile interface: Primary access through iOS and Android apps
Liquidity: Limited monthly redemptions through the fund's Redemption Plan, subject to that plan's restrictions and available liquidity. Distribution frequency and redemption frequency are not the same thing.
Returns and Fees
Concreit's July 2026 SEC supplement reports a 6.30% annualized distribution yield for the July distribution periods. A distribution yield is not the same as a total return.
The fund charges a 1% annual NAV-based management fee, with additional fund-level and asset-level fees or expenses potentially applicable, including acquisition, origination, financing, property management, servicing, and disposition expenses. The redemption fee schedule is 2% for redemptions before one year, 1% from one to two years, and 0% from two years onward.
Best For: Mobile-native investors seeking frequent income distributions with a very low entry point, who understand they are buying shares in a non-traded REIT whose portfolio is credit-heavy rather than owning debt directly.
Why mogul Stands Out for Real Estate Investors
A Structure Built Around Property-Level Ownership
mogul is the only option in this comparison built on membership interests in a property-specific LLC that owns an identifiable home. Every other vehicle covered here is a pooled or public structure: VNQ is an ETF holding publicly traded real estate securities, Fundrise operates pooled private real estate funds and eREITs, Roots operates a non-traded private REIT, RealtyMogul offers non-traded REITs and private placements, Concreit's investors hold shares in a non-traded REIT, and Groundfloor's investors hold notes or individual loan positions.
That structural difference is what unlocks mogul's pass-through K-1 reporting, property-level transparency, and ownership-weighted governance rights. Tax treatment still depends on the vehicle and the investor: some partnership-structured pooled investments can also pass through deductions on Schedule K-1, while REIT shareholders generally do not directly claim the underlying property's depreciation. Learn more about how depreciation works in real estate investing.
On Comparing Returns Across These Platforms
Return figures across these seven options cannot be validly ranked against one another, and this article does not attempt to. mogul reports an 18.8% average IRR, a money-weighted metric. Roots reports a 12.01% trailing 12-month total return and 85.30% since inception. Groundfloor advertises fixed Note rates of 5% to 8.5% plus a separate accredited-only 9.5% Bond Note. Vanguard reports VNQ total returns. Fundrise reports advisory client account returns. Concreit reports an annualized distribution yield. IRR, distribution yield, fixed note coupons, ETF year-to-date returns, and advisory-account returns should never occupy the same ranking. Any meaningful comparison must normalize by security type, measurement period, total-return methodology, leverage, fee treatment, and whether the metric is realized, historical, targeted, or a current distribution or coupon rate.
Institutional Selectivity
mogul reports reviewing thousands of properties supplied by inventory partners, with fewer than 1% passing its diligence process. mogul says its founders deployed billions of dollars into real estate while at Goldman Sachs and consistently hit 12% to 20% IRRs on institutional deals, and that this institutional experience informs its current underwriting process.
No Recurring AUM Fee
While many platforms apply an annual fee on assets, mogul does not charge a recurring AUM fee on invested principal. Its structure instead consists of a 3% capitalized platform fee, a conditional 2% property setup fee where applicable, and an ongoing 2.5% fee on collected rental income. When comparing total cost, weigh all three components over your expected holding period; the right comparison depends on rental income, capitalization, and hold length.
Unique Risk Protection
mogul's $10,000 loss protection, covering first-week investments for the entire first year, is a distinguishing feature among the options in this comparison. This alignment of interests demonstrates confidence in the underwriting process.
Monthly Income Distributions
Once a property is operational and has distributable cash flow, mogul distributes each investor's proportional share of net rental income monthly, after applicable expenses, fees, and reserves. A monthly cadence can provide more frequent reinvestment opportunities than quarterly schedules, though actual amounts depend on property performance.
For investors ready to build a property portfolio, mogul combines fractional access with an institutional-style underwriting process informed by its team's prior institutional real estate experience. Explore available properties or use mogul's free Airbnb calculator to analyze potential investments.
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 is the difference between investing in a REIT and property-specific LLC ownership?
REITs and REIT funds provide indirect real estate exposure. A REIT may own properties or real-estate-related investments such as debt and preferred equity, while an ETF like VNQ owns a portfolio of publicly traded real estate securities rather than operating buildings directly. In each case you own shares in the fund. Fractional ownership through mogul instead provides membership interests in a property-specific LLC that owns an identifiable home, giving you property-level economic and governance rights, pass-through K-1 reporting, and transparency into individual asset performance.
Can I invest in real estate without being an accredited investor?
In most cases yes, but eligibility is set product by product rather than platform by platform, and current availability matters as much as accreditation: mogul states its offerings are available to accredited and non-accredited investors, subject to onboarding, KYC verification, applicable legal requirements, and offering-specific eligibility; Fundrise and Roots accept non-accredited investors in their primary Regulation A offerings; Groundfloor has a mix of broadly accessible and accredited-only offerings, its August 2026 9.5% Bond Note is accredited-only; Concreit's Regulation A shares allow qualifying non-accredited investors subject to applicable investment limits; RealtyMogul's REIT structure can accommodate qualifying non-accredited investors, but both the Income REIT and Apartment Growth REIT are currently paused to new investors. Its individual private placements are accredited-only; and, VNQ is an exchange-traded fund rather than a platform, purchasable through any brokerage account.
How do real estate debt investments generate income?
Structures differ meaningfully. With Groundfloor's Individual Loans and Notes, investors hold debt securities and earn interest tied to borrower repayment. With Concreit, investors instead own Investor Shares in a non-traded REIT whose portfolio holds secured loans and other investments; an investor does not receive a proportional share of loan principal each time an underlying borrower's loan matures. Rates are not universal across private real estate credit: returns depend on the specific security, maturity, seniority, borrower risk, collateral, and market conditions, and current Groundfloor offerings alone span from 5% Notes to a 9.5% accredited-only Bond Note.
What are the tax implications of these alternative real estate investments?
Tax treatment varies significantly, and the form you receive does not by itself determine the character of the income. mogul's property LLCs provide K-1 tax documents reflecting your share of income, expenses, and depreciation, though actual deductibility depends on basis, at-risk limitations, participation, income, and your circumstances. REIT and REIT-fund distributions are reported on Form 1099-DIV, which the IRS uses for several types of dividend and distribution reporting: RealtyMogul states its REIT distributions may consist of ordinary income, capital gain, and/or return of capital, and Vanguard's 2026 Form 8937 documents a return-of-capital component in certain 2025 VNQ distributions. Directly held debt instruments such as Groundfloor's produce interest reporting. Review tax strategies for real estate investors to understand how each structure affects your situation.
How liquid are these real estate investments?
Liquidity ranges widely, and private-vehicle terms change. VNQ trades daily on exchanges with immediate access. Concreit offers limited monthly redemptions through its Redemption Plan, subject to restrictions and available liquidity, with a 2% fee before one year, 1% from one to two years, and 0% from two years onward. Roots offers quarterly liquidity subject to program limits, with an 8% penalty within the first 12 months. Fundrise advertises quarterly liquidity subject to applicable fund terms following the April 29, 2026 merger of Fundrise Equity REIT into Fundrise eREIT. RealtyMogul's two REIT share-repurchase programs have been suspended since April 21, 2026. mogul investments are held to property sale across a broad 3 to 10-year range with roughly 5 to 7 years typical, and a secondary trading market is in development. Liquidity terms and realized performance vary independently, so neither should be used to infer the other.