If you're an accredited investor looking to allocate capital to real estate, the landscape is wider than it's ever been — and more confusing. Here is a structured comparison of the main options available in 2026, with honest assessments of return profiles, liquidity, minimums, and risk.
All return figures are illustrative targets or historical ranges from publicly available sources. Not investment advice. See disclosures.
What it is: Shares of publicly traded trusts that own income-producing real estate.
Returns: Historically 8–12% total return (dividends + appreciation) over long periods. Varies significantly by sector and interest rate environment.
Liquidity: High — publicly traded, can be sold same day.
Minimum: $1 (fractional shares).
Key trade-off: Low barrier to entry and full liquidity, but you own a diversified basket with no control, no tax advantages beyond ordinary dividends, and significant correlation to equity markets during volatility.
What it is: A sponsor (operator) raises equity from passive investors to acquire a specific asset or portfolio. Investors receive preferred returns plus profit sharing.
Returns: Typically 6–9% preferred return + 15–20% IRR targets (deal-dependent).
Liquidity: Very low — typically 3–7 year hold periods with no secondary market.
Minimum: Usually $25,000–$100,000 per deal.
Key trade-off: Higher return potential and tax pass-through benefits, but you are entirely dependent on sponsor execution quality. Underwriting a sponsor is as important as underwriting the deal.
What it is: You lend capital to a real estate operator at a fixed rate, secured by the property as collateral. First-lien position means you are paid before equity.
Returns: 8–12% fixed APR, depending on loan-to-value and market.
Liquidity: Low — fixed term (typically 12–24 months), though shorter than equity.
Minimum: Varies — Equity Quarters minimum is disclosed in offering documents.
Key trade-off: Fixed, predictable return with collateral protection. You don't participate in upside, but you are insulated from operational execution risk. Best for capital preservation with yield.
What it is: You purchase an existing mortgage note — becoming the lender on an already-originated loan. Monthly payments flow to you at the note's interest rate.
Returns: 10–14% yield, depending on note terms and discount at acquisition.
Liquidity: Low-to-moderate — notes can be re-sold, but secondary market is thin.
Minimum: Varies by note size.
Key trade-off: High yield potential with collateral backing, plus potential tax deduction treatment depending on your situation. Requires confidence in the underlying property and borrower.
What it is: Direct equity ownership in co-living properties operated by a professional operator. Cash-on-cash distributions plus appreciation at exit.
Returns: Target 8% cash-on-cash + 10% annual appreciation in target metros = 18% blended IRR (illustrative, not guaranteed).
Liquidity: Very low — direct real estate ownership, 3–5 year target hold.
Minimum: Disclosed in offering documents.
Key trade-off: Highest return potential with direct asset ownership and tax benefits. Operationally dependent on the co-living operator's management quality and market execution.
Most accredited investors with real estate exposure use a combination of these structures — allocating to fixed-rate debt for yield and capital protection, direct equity for upside and tax benefits, and REITs for liquidity.
The co-living opportunity sits in the equity and lending buckets. It offers structural advantages that conventional SFR does not: revenue density, lower break-even occupancy, and a government-backed revenue floor from voucher integration.
Reg D 506(c) — accredited investors only. Not an offer to sell securities. See full disclosures.
This article is for informational purposes only and does not constitute investment advice or an offer of securities. See full disclosures.