DiversyFund Review: Pros, Cons & Expert Analysis

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Real estate is one of the most popular investment classes, but traditional real estate investments (like rental properties) present a number of barriers, including the large amount of capital required to invest in them. 

DiversyFund aims to open up private market real estate to everyday investors by lowering that barrier to entry. This DiversyFund review will explain how it works and answer some key questions about the platform.


DiversyFund has a solid investment approach, is open to non-accredited investors, and its $500 minimum investment is on the low end. The biggest downsides are that your funds are locked up for a minimum of five years and no dividends are paid during this period, making the platform most valuable to investors without the need for short-term liquidity or cash.

  • Allows for hands-off investment in commercial-grade real estate.
  • DiversyFund owns and manages the properties.
  • Open to all investors (not just accredited investors).
  • Potential for strong returns.
  • $500 minimum investment.
  • Lack of liquidity during the five-year investment term.
  • No option for cash dividends.
  • Limited investment options.
  • Portfolio is less diversified than many other REITs and eREITs.
  • No IRAs.
  • Limited track record.

DiversyFund At a Glance

DiversyFund offers a Growth REIT that allows you to invest in commercial-grade real estate. Unlike some crowdfunding platforms and alternative investments, DiversyFund is open to all U.S. investors with a minimum account of $500, not just accredited investors.

The Growth REIT is a long-term investment that aims to maximize investor ROI by purchasing, renovating, and eventually selling multi-family rental properties. They look for value-add opportunities with a potential annual IRR of 10% to 20%.

Note: Internal rate of return (IRR) is essentially the annual return. In this case, DiversyFund seeks investments that will produce 10% to 20% annual return for investors.

DiversyFund vets the properties and does all of the legwork, making it a completely hands-off investment. Once the property is purchased, DiversyFund also manages the project, including renovations and rental management. 

This is one of the major differences between DiversyFund and other platforms that merely function as middlemen between developers and investors. DiversyFund also has skin in the game alongside investors, providing them with added incentive to produce excellent returns.

Unlike most other REITs and crowdfunding platforms, DiversyFund does not allow investors to receive quarterly or annual dividends as cash payments. Instead, all dividends are automatically reinvested to buy more shares of the Growth REIT. Reinvesting is ideal for maximizing long-term growth, but not having the option for cash dividends removes the option of using the DiversyFund Growth REIT as a source of passive income. 

The target holding length is five years, but investors should be prepared to wait longer because properties will not be sold if market conditions are less than ideal, based on DiversyFund’s judgement. 

The investment is completely illiquid as DiversyFund does not offer premature withdrawals or a secondary market to sell your shares. With the five-year target hold and no option to receive cash dividends, that means investors won’t see any return until the properties are sold.

DiversyFund’s Growth REIT is very clearly a long-term investment for people who won’t need the money within the next few years. The goal is maximizing long-term returns, ideally somewhere in the 10% to 20% per year range. If you’re looking to get those types of returns from an alternative investment and you’re willing to wait five years for the payoff, DiversyFund could be a good fit for you.

The Growth REIT has only been around since 2018, so the initial investments haven’t come full circle yet. While the target IRR looks good, the limited track record requires some faith on the part of investors.

It’s worth noting that DIversyFund does provide some data on historical returns from 2017 and 2018, but those projects were separate from the Growth REIT, so the results are of limited usefulness.

The potential for outstanding returns makes DiversyFund an intriguing option. However, lack of liquidity, lack of cash dividends, and limited track record will give pause to some investors.

DiversyFund Key Facts

Fees:2% to 8% developer fees.
Account minimum:$500.
Account types:Taxable.

Pros and Cons Explained

DiversyFund Pros

  • Hands-off investment in commercial grade real estate. DiversyFund identifies and vets the properties on behalf of investors, which is ideal for those who don’t have experience with real estate investing.
  • DiversyFund owns and manages the properties. Unlike most crowdfunding platforms, DiversyFund is not simply a middleman. They also make more money if the investments are successful, instead of benefitting only from fees.
  • Open to all investors (not just accredited investors). DiversyFund is open to all U.S. investors, which is not the case with some real estate investments.
  • Potential for strong returns. DiversyFund targets properties with potential IRR of 10% to 20% (net of fees). The sole focus of the Growth REIT is maximizing long-term returns.
  • $500 minimum investment. Many real estate investments, including some crowdfunding platforms, have significantly higher minimums. The $500 minimum investment with DiversyFund is very reasonable and makes it a realistic option for most investors.

DiversyFund Cons

  • Investment term of at least five years. Each property has a target hold of five years, but the exact length could be longer or shorter depending on factors like market conditions for selling the property.
  • Lack of liquidity. DiversyFund does not support premature withdrawals. Once you invest, you’re committed for at least five years, and it could be longer.
  • No option for cash distributions of dividends. Growth REIT investors earn quarterly dividends, but those dividends are automatically reinvested with no option for a cash payout. That means investors won’t see any cash from their investment until properties are sold.
  • Limited investment options. Currently, DiversyFund only offers the Growth REIT.
  • The portfolio is less diversified than many other REITs and eREITs. Investors benefit from the diversity of owning several income-generating properties, but DiversyFund’s portfolio is much smaller than many other real estate investments. All of the properties are multifamily rentals, so some other investments offer a more diversified portfolio as well.
  • No IRAs. Currently, there is no option to invest in an IRA directly through DiversyFund. However, they are on the list of approved partners for Alto IRA, a self-directed IRA provider. See our Alto IRA review to learn more.
  • Limited track record. DiversyFund was founded in 2016 and the Growth REIT started in 2018. With a five-year target hold for each property, deals have not gone through the full life cycle at this time. As a result, it may be a few years before DiversyFund has much of a track record that can be reported.

DiversyFund Historical Returns

Limited information on DiversyFund’s past performance is available, due to the fact that the company has only been in operation for a few years. Since the Growth REIT invests in properties with a target hold of about five years, the properties purchased in 2018 (when the growth REIT started) should be sold somewhere around 2023. 

DiversyFund does state that investors earned average annualized returns of 18% in 2017 and 17.3% in 2018. However, these results are from projects offered before the REIT started and not from the Growth REIT itself.

According to DiversyFund, investors saw 5% dividends in 2019. However, Growth REIT investors do not receive cash dividends. All dividends are automatically reinvested, so investors don’t see any cash until the properties are sold. 

When properties are sold for a profit, investors will get their principal plus 7% preferred return before DiversyFund receives a share of the profits.

Additional profits are split between DiversyFund and the investors. The split will be 65% to investors and 35% to DiversyFund, until the investor’s return equals 12% annually. All profit beyond that will be split 50/50 between DiversyFund and investors.

DiversyFund Liquidity

DiversyFund makes it clear that an investment in their Growth REIT is illiquid. The properties are purchased with a target timeframe of about five years to renovate, increase the value of the property, collect rental income, and sell the property for a profit (hopefully). 

However, the five-year target is an estimate, and the actual length of time could be longer or shorter, depending on market conditions and other factors. 

There’s no secondary market available for selling your shares, so it’s critical that you only invest in the Growth REIT if you’re able and willing to lose all access to the money for five years, and possibly longer. 

It’s also important to note that dividends from rental income are automatically reinvested with no option to receive a cash payment. Since the dividends are automatically reinvested, investors will not see any return until the properties are sold. 

Alternatives to DiversyFund

Check out our list of the best crowdfunded real estate sites to learn about the top alternatives.

DiversyFund vs. Fundrise

Fundrise is one of the leading real estate crowdfunding platforms. Like DiversyFund, Fundrise is open to non-accredited investors and offers access to a portfolio of income-generating properties. 

However, there are also several key differences between DiversyFund and Fundrise. The portfolio of Fundrise is far more diverse, with properties spread throughout the U.S., and it has a much larger number of properties.

Another key difference is that Fundrise now allows investors to get started with just $10 (the minimum used to be $500, like DiversyFund), making it accessible to a greater number of people.

Fundrise also offers more options to investors. Those who are able to invest a minimum of $5,000 will get access to three different core portfolios: growth, income and balanced. Investors can choose the portfolio that best fits with their own goals. 

Liquidity is also a difference between the two. DiversyFund offers no premature withdrawals. Fundrise investors can request an early withdrawal of shares that have been held for less than five years. Fundrise does not guarantee liquidity and fees may apply for early withdrawals.

The fee structure is also different between these two investments. Fundrise charges a 0.15% annual advisory fee and a 0.85% annual management fee. DiversyFund does not charge advisory fees, but they do charge a 2% to 8% developer fee (although the exact fee can vary). 

Thanks to a longer track record, Fundrise offers more detail to investors in terms of historical returns. Since each investor’s portfolio will be different, the results will vary, but average returns across the platform are publicly available on the track record page.

In addition to taxable accounts, Fundrise also offers self-directed IRAs (minimum investment of $1,000). DiversyFund does not offer IRAs.

Learn more in our Fundrise review.

DiversyFund vs. Arrived

Arrived is a unique platform that allows investors to own a share of a single-family home rental property. It’s basically a hands-off way to own rental property without the time and commitment that comes with being a landlord.

The most significant difference between these two platforms is that Arrived pays investors quarterly with cash distributions from rental income generated. Due to the quarterly payouts, Arrived is appropriate for someone looking for an income-generating investment.

DiversyFund automatically reinvests all dividends into its Growth REIT. The reinvestment purchases more shares for the investor, but this takes away the option for generating income through cash payouts. As a result, the DiversyFund Growth REIT is appropriate for long-term investors instead of income investors.

The investment experience between the two platforms is also different. With Arrived, investors can view the details of specific properties that are available and choose a property to invest in. 

Of course, you can invest in multiple properties if you like, but you’ll choose the specific properties. With DiversyFund, you’ll invest in a portfolio that includes several properties, but you’ll have no influence on the exact properties in the portfolio. 

Learn more in our Arrived review.

DiversyFund vs. Publicly Traded REITs

Publicly traded REITs (real estate investment trusts) can be bought or sold at any time, just like a stock or ETF. As a result, a publicly traded REIT is a liquid investment, unlike the DiversyFund Growth REIT. 

The value of a publicly traded REIT will change all the time. As a DiversyFund investor, short-term fluctuations won’t be an issue. You won’t really know the value or return of your investment until the properties are sold and investors are paid back.

Another significant difference is that publicly traded REITs tend to have very large portfolios that include many different properties, while DiversyFund’s portfolio is comparatively small.

They also usually pay relatively high cash dividends, compared to the broader stock market.

Whether you’re investing in a publicly traded REIT or DiversyFund’s non-traded REIT, you’ll get access to a portfolio of properties without the need to vet or select properties on your own.

DiversyFund Investment Options

DiversyFund’s investment options are very limited. However, that may not be an issue if you fall into their target audience of investors looking for an alternative to the stock market for long-term growth. Currently, there’s only one REIT or fund to choose (the Growth REIT). 

It would be nice to have the option for investing in an IRA, but currently, the only option is a taxable account.

DiversyFund Investment Methodology

DiversyFund has very clear goals and criteria for the properties held within the Growth REIT. They look for properties that can produce 10% to 20% IRR, and they have a target timeframe of five years. DiversyFund looks for opportunities to add value through renovations and improvements. 

This is clearly a long-term investment that’s focused on maximizing the eventual returns. This approach won’t be the right fit for every investor, but those who are willing to wait five years or more to see the return may be intrigued by the possibility of strong return outside of the stock market.

DiversyFund Fees

DiversyFund’s fee structure is somewhat confusing. They don’t charge broker fees to investors. However, DiversyFund is also the developer of the projects in their portfolio and they charge a 2% to 8% developer fee. This includes a 2% asset management fee as well as variable fees for offering and organization expense reimbursement, acquisition fees, and finance fees.

DiversyFund Reputation

The co-founders of DiversyFund, Craig Cecilio and Alan Lewis, are defendants in three lawsuits (at the time the company’s 2020 annual report was published). While the lawsuits all involve real estate transactions, it’s important to note that none of these lawsuits involve DiversyFund and that Mr. Cecilio and Mr. Lewis are “vigorously defending” themselves. However, the lawsuits may be a red flag for investors. 

Even though the lawsuits don’t directly involve DiversyFund, the most recent annual report (available at points out that judgements against Cecilio and/or Lewis could adversely impact DiversyFund if their credit is damaged, if lenders choose not to lend to them in the future, or if they are forced into bankruptcy.

Cecilio was also the subject of government action related to Coastal California Funding Group (CCFG), a company that he ran prior to DiversyFund. Cecilio was charged by the California Bureau of Real Estate (BRE) with “failure to supervise.” As a result, he was issued a minor fine of $3,000 and his BRE license was suspended for 30 days. Other charges initially filed by the BRE were dropped after investigation and a sufficient response from Cecilio.

DiversyFund FAQ 

Does DiversyFund pay dividends?

All dividends are automatically reinvested to buy more shares of the Growth REIT. DiversyFund does not give investors the option to receive dividends as cash payouts. As a result, investors will not see any return on investment until properties are sold, and the Growth REIT should not be used as an income-generating investment.

Is DiversyFund open to people outside the United States?

To invest in DiversyFund, you must be a U.S. citizen, permanent resident, or have a valid U.S. visa. You will need a valid Social Security Number, and a U.S. residential address within the 50 states or Puerto Rico.

Is DiversyFund a legit company?

Yes, DiversyFund is a legit company with an A+ rating from the Better Business Bureau. However, it has a very limited track record, and its founders don’t have the most sterling reputation in the industry (see our notes here).

How much can you make on DiversyFund?

DiversyFund aims to find properties with potential for 10% to 20% IRR. Because the offering began in 2018 and the investment timeframe is approximately five years, there’s very little historical data available at this time to determine the actual performance.

How does DiversyFund make money?

DiversyFund makes money through platform and acquisition fees. Additionally, DiversyFund owns and operates the Growth REIT and its assets. The owners of the company have “skin in the game” alongside investors. 

How long has DiversyFund been around?

DiversyFund was founded in 2016 and the Growth REIT was qualified by the SEC in November of 2018. However, co-founders Craig Cecilio and Alan Lewis have nearly four decades of combined experience in real estate.

Our Review Methodology

Our review methodology is an independent assessment by The Ways To Wealth team, overseen by CERTIFIED FINANCIAL PLANNER™ and site founder R.J. Weiss. Our end goal is to publish fair, honest and unbiased assessments of financial products and services, offering our readers the same analysis we provide to friends and family. You can read more about our review methodology here.

Is DiversyFund Right For You?

DiversyFund’s Growth REIT is a long-term investment that offers no liquidity. The goal of the fund is to maximize return at the expense of liquidity and dividend income throughout the duration of the investment. The ideal investor for the fund prioritizes long-term returns and is looking to add diversification to their portfolio.

If you’re an accredited investor, a similar type of platform is Cadre, which has a long-term time horizon. Read our Cadre review to learn more.

If your goal is to maximize ROI, you’re willing to wait at least five years for any payout, and the lack of liquidity is not a concern, DiversyFund is an investment you might want to consider.

However, if you might need access to your money within the next few years or you don’t like the idea of having zero liquidity, you may prefer alternatives like Fundrise or publicly traded REITs.

With the lack of liquidity, it’s especially important to do your own due diligence and decide if this investment is right for you.

Learn more at the DiversyFund website.

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Marc Andre
Marc Andre is a personal finance blogger at Vital Dollar, where he writes about saving, managing and making money. He lives in Pennsylvania with his wife and two kids, and has been a full-time blogger and internet marketer since 2008.

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