Arrived Review: More for Appreciation (Surprise), Than Income

How Arrived Works

For individual investors, having a large portion of their income tied up in one or two rental properties is risky. A single vacancy or tenant default can cause cash flow to vanish overnight.

Managing these properties yourself adds complexity, and while property managers can help, their fees (8% to 12% for long-term rentals or 15%+ for short-term rentals) and additional costs like cleaning and maintenance reduce profits.

Launched in 2021 and backed by Jeff Bezos through Bezos Expeditions (his personal investment company), Arrived offers an online platform for individual investors to diversify in residential real estate.

Through a curated platform, you can invest in:

• Single-Property Shares. Purchase shares of individual single-family homes, earning a portion of the rental income and appreciation.
• Diversified Properties Fund. Invest in a portfolio of properties for broader exposure and reduced risk compared to owning shares in a single property.
• Private Credit Fund. Earn secured, interest-based returns by funding renovations, rehabs, and new construction projects.

Arrived manages all operational logistics, including tenant management, maintenance, and taxes. You then earn monthly dividends from rental income, paid after covering property expenses.

If the property is sold, investors may also receive returns from any appreciation in property value. The typical holding period for long-term rentals is 5-7 years, while vacation rentals typically range from 5-15 years. Arrived decides when to sell based on market conditions and other factors, with the goal of maximizing investors’ returns.

The platform only offers single-family homes—no duplexes, townhomes, condos, or commercial properties. Homes typically range from $250,000 to $500,000, though some exceptions exist. Overall, the properties are mid-range rather than high-end.

How does Arrived choose what homes to invest in?

Arrived doesn’t operate as a marketplace where anyone can list their home for fractional ownership. Instead, it focuses on curating homes across the U.S. for investment. It works directly with agents and wholesalers to find homes at competitive prices and strategically invests in renovations to maximize returns.

Here’s how Arrived breaks down its home-buying process:

1. Identify the most lucrative markets. They list job growth, sustained economic development, rising population growth, and affordability as key factors. 
2. Narrow down the top neighborhoods. Within these markets, the goal is to identify the neighborhoods with good schools, low crime rates, and fast commutes to the city’s economic center.
3. Develop ideal home criteria. Within each neighborhood, they’re looking for homes that offer the ideal mix of price, bed/bath configuration, square footage, year built, and level of renovation.
4. Source deals to find hidden gems. They aim to be creative in sourcing their deals so they can purchase homes at the lowest possible price. This includes building relationships with experienced sales agents and property wholesalers and buying directly from sellers. 
5. Make the right offer on the right home. Once the ideal home is found, Arrived’s investment committee approves it and makes an offer. 
6. Invest in renovation strategically. Once the home is purchased, they focus on the upgrades that will net the highest return for rental income and appreciation value. 

Once on the platform, you’ll notice that investments can still sell out quickly—though this is a marked improvement from past years when properties often sold out within a day, with only one available at a time. For instance, I saw seven homes listed during a recent login, but they tend to go fast.

If you’re not actively checking, you might miss out on a deal you had your eye on. In such cases, the fund route offers a convenient way to gain broader exposure.

Are Arrived homes financed?

The individual properties on Arrived use one of three leverage ratios: 0%, 50%, or 70% of the purchase price. Each listing shows its specific leverage percentage.

For leveraged properties, Arrived secures a mortgage at the time of purchase. These mortgages are non-recourse, meaning investors bear no personal liability for the debt and don’t need to undergo credit checks.

Properties are designated in one of three ways:

1. Financed Properties. Have existing mortgages. May be refinanced if interest rates drop enough to justify the closing costs.
2. Unfinanced Properties. Operate without debt and will remain unleveraged unless marked explicitly for potential future financing.
3. Strategic Refinancing Properties. Currently unleveraged but may add financing if interest rates become favorable. If refinanced, the proceeds are typically distributed to investors.

Investors can view each property’s financing status and strategy in the Property Leverage section of its listing page.

Who can invest with Arrived?

Arrived is open to non-accredited investors over 18 in the U.S.

Who owns the home?

Each property in the Arrived platform operates as a separate Series LLC, creating a separate legal entity with its assets, liabilities, and bank accounts.

When you invest, you buy shares in the LLC of that property, with your ownership percentage directly tied to your investment amount. For example, a $5,000 investment in a property with a $100,000 total investment represents 5% ownership.

The LLC structure provides several key features:

• No personal liability for property obligations or mortgages
• Pass-through tax treatment for qualifying REIT properties
• Regular SEC financial reporting through 1-SA and 1-K filings
• Protection of ownership rights even if Arrived ceased operations

How share prices are calculated?

When you invest in an Arrived property, you purchase shares at $10 each, with a minimum investment of 10 shares ($100) per property. Like tracking a stock portfolio, share prices help you monitor the value of your property investment over time.

Share price updates begin:

• 6 months after closing for residential properties
• 12 months after closing for vacation rentals
• Quarterly updates thereafter

The share price reflects your property’s current value through a comprehensive calculation:

Property Equity Value = Property Value + Cash Reserves – Outstanding Debt Share Price = Property Equity Value ÷ Total Number of Shares

For example, consider a property worth $400,000 with $40,000 in reserves and a $280,000 mortgage, divided into 40,000 shares: ($400,000 + $40,000 – $280,000) ÷ 40,000 = $4 per share

Share prices often decrease below $10 early in the investment period due to:

• Initial operating costs reducing cash reserves
• Property value fluctuations
• Pro-rated investment fees
• Startup costs (especially significant for vacation rentals)

While share prices regularly update your investment’s current value, your ultimate return depends primarily on the property’s sale price.

Who is responsible for repairs and other expenses?

Each property’s LLC maintains dedicated cash reserves (typically 2% of the home’s value) to cover operating expenses and unexpected costs. Professional property managers handle day-to-day operations, including:

• Tenant sourcing and management
• Rent collection
• Maintenance coordination
• Regular property inspections

Operating costs are deducted from rental income before dividend distributions:

• Property management fees (8% for residential, 15-25% for vacation rentals)
• Property taxes and insurance
• Regular maintenance and repairs
• HOA fees (where applicable)
• One-time expenses like tenant turnover or major repairs

If expenses exceed available cash reserves, Arrived may provide a short-term loan to the property’s LLC, repaid through future rental income. This structure protects investors from capital calls.

Your monthly dividend payments reflect the property’s actual free cash flow after all expenses and reserve allocations. While distributions may fluctuate based on property performance and expenses, you’re not responsible for out-of-pocket costs beyond your initial investment.

What type of return should you expect?

As of Q4 2023, Arrived had 324 operational properties paying dividends and 358 properties completing their IPO.

For single-family homes, annualized returns from dividend income over the quarter averaged between 1.2% and 9.1%, with a mean of 3.9%. Vacation rentals averaged 3.5% (the range was 2.0% to 6.0%).

In Q4 2023, 205 existing properties saw share price changes between -17.9% and +14.1%, with a mean decrease of -2.0%. Additionally, 35 properties received their first valuations, ranging from -17.8% to +2.9%, averaging -3.1%.

Arrived’s first completed property sale in October 2024 generated a total return of 34.7% (11.2% annualized) for investors.

However, this single sale should not be considered representative of expected returns—it represents the property Arrived deemed most advantageous to sell out of its portfolio of 358 properties, likely due to its strong performance relative to other holdings.

The Arrived Single Family Residential Fund, launched in Q4 2023, currently provides exposure to properties across 19 markets. As of October 2024, the occupancy rate was 98% stabilized. While it is too early to determine long-term performance patterns, the fund follows similar fundamentals to individual property investments.

The Arrived Private Credit Fund, with over 11,100 investors and $21 million invested, currently yields 8.1% annually by providing loans for real estate projects. The fund holds 42 loans across renovation, bridge financing, and new construction projects.

What happens when you want to sell your shares prior to Arrived selling the property?

The expected hold period varies by investment type:

• Individual properties. Five to seven years for residential, five to fifteen years for vacation rentals
• Single Family Residential Fund. Quarterly redemption opportunities after six months, limited to 5% of fund shares per quarter
• Private Credit Fund. Quarterly redemption opportunities after six months, limited to 5% of fund shares per quarter

For individual properties, while Arrived plans to offer a secondary market for trading shares, this feature is not yet available. It would be best if you planned to hold these investments for the full investment period until the property sells.

Both funds offer more structured liquidity through quarterly redemption programs, but with limitations:

• Six-month minimum holding period
• Redemptions limited to 5% of fund shares per quarter
• 20% maximum redemptions per calendar year
• Redemptions are subject to fund approval and available liquidity
• Early redemption fees may apply
• Current share price/NAV determines redemption value

In other words, while the funds offer some liquidity options, any Arrived investment should be viewed as a long-term commitment aligned with the stated hold periods. The redemption programs should be considered backup options rather than guaranteed exit strategies.

What fees does Arrived charge?

Fees vary based on the property type (e.g., single-family homes, vacation rentals, or funds) and are disclosed under the “Deal Terms” section at the bottom of each listing. Here’s what you should know:

One-Time Sourcing Fee

Arrived charges a one-time sourcing fee as part of the initial property acquisition. This fee typically ranges between 3.5% to 4.75% of the total purchase price. It covers the costs of identifying, underwriting, and setting up the property as an investment opportunity.

Ongoing Asset Management Fee (AUM Fee)

Arrived charges a quarterly asset management fee to cover services such as tax preparation, accounting, insurance procurement, payment of property taxes and mortgages, and managing the property manager relationship. The fee depends on the product type:

• Single-Family Residential Properties: 0.15% of the asset purchase price per quarter (0.6% per year).
• Arrived Single Family Residential Fund (SFR Fund): 0.25% of net assets per quarter (1% per year).
• PCF Fund: 0.3% of net assets per quarter (1.2% per year).
• Vacation Rentals: A variable fee based on rental income that has historically averaged around 0.1% of the initial investment amount per quarter (0.4% per year).

Property-Level Operating Expenses

Ongoing operating expenses—such as property taxes, insurance, maintenance, and property management fees—are paid out of the property’s rental income. A professional property manager handles day-to-day operations, covering expenses before distributing dividends to investors.

Arrived Alternatives

Arrived isn’t your only option if you’re interested in investing in single-family rental homes or real estate as an asset class. Let’s look at the main ways you can invest in residential real estate and what makes each different.

Big Public Housing Companies (REITs)

Think of these as mutual funds but for rental homes. Two major players dominate this space: American Homes 4 Rent and Invitation Homes.

These companies own and manage massive portfolios of rental homes.

You can buy shares through any brokerage account and typically earn around 2.5-3% per year in dividends.

The big advantage here is flexibility – you can sell your shares anytime the market is open. The downside? You have no say in which properties they buy or sell, and share prices can swing wildly with the stock market, even when house values aren’t changing.

Other Real Estate Platforms

Although there are now dozens of real estate investment platforms, the ones most similar to Arrived include:

• Ark7 works similarly to Arrived, letting you buy pieces of individual homes starting at $20. They have a secondary market where you can sell shares after a minimum holding period, though there’s no guarantee of finding a buyer. Some offerings are limited to accredited investors.
• Roofstock is a specialized marketplace for buying complete rental properties, not just shares. They’ve helped facilitate over $6 billion in property transactions by creating a platform to browse tenant-occupied homes, analyze their financial performance, and purchase them entirely – just like buying a house through a real estate agent, but with tools specifically designed for rental investors. While they offer support services and can connect you with property managers, you’ll need a traditional mortgage (meaning a 20-25% down payment). You will be responsible for all aspects of property ownership. Think of it as a modernized way to become a landlord, but you’ll still need significant capital – typically $40,000 or more for the down payment on a single property.
• Percent.com also allows investors to participate in real estate debt products like Arrived’s Private Credit Fund. However, while Arrived focuses primarily on residential properties, Percent offers a broader array of private credit investment opportunities across multiple sectors. See our Precent.com Investing Review.
• Fundrise’s approach to single-family home investing differs from Arrived in several ways. While Arrived offers fractionalized shares of individual properties and allows investors to pick specific homes, Fundrise primarily operates through diversified funds that pool capital to invest in large-scale residential portfolios—often build-for-rent communities and multifamily assets located in rapidly growing markets. Rather than selecting individual properties, Fundrise investors rely on the platform’s internal investment team to source and manage portfolios. See our Fundrise Review, or we wrote up a detailed comparison of Arrived vs. Fundrise to learn more.

How Arrived Fits In

Arrived bridges the gap between traditional REITs and direct property ownership. Like REITs, you can start with just $100 and don’t have to manage anything yourself. Like direct ownership, you can choose specific properties to invest in. The trade-offs? You won’t have the instant liquidity of REITs or the complete control of direct ownership.

Your best option depends on your priorities. Choose REITs if you want to buy and sell easily, Roofstock if you have the capital ($40,000+) and want full control, or Arrived if you want to pick specific properties but prefer starting with smaller amounts. What makes Arrived unique is that it’s open to all investors, not just accredited ones.

Is Arrived a Good Investment?

Arrived has grown quite a bit since inception. However, growth in investor base and total deals doesn’t necessarily equate to financial success for investors. 

Since it’s new, their track record on dividend payments is minimal. Regarding their ability to pick rental properties that appreciate, it will be a few years before we can judge their performance. Just one property has sold so far.

With that in mind, while I like what the platform brings to the table in real estate, investors should realize that it’s still very early for this company. 

Suppose you have a properly diversified portfolio of stocks and bonds, and your time frame is five years or more. In that case, Arrived is a solid choice for adding more diversification to your portfolio and one of the best ways to invest in real estate with little money.  But it’s not really a passive income investment compared to traditional real estate investments since yield is in the 2% to 5% range.