Investing can be a powerful tool for building a more secure financial future. But for generations, the opportunity to build wealth through investing has felt out of reach for many.
Traditional investing demands deep pockets to buy entire assets, such as a piece of real estate or an expensive share of stock, both of which typically require specialized knowledge of complex financial markets.
The high barrier to entry for investing has historically kept aspiring, non-accredited investors — and the capital they represent — on the sidelines.
This landscape began to change with key regulatory innovation. In 2012, the Jumpstart Our Business Startups Act — referred to as the JOBS Act — introduced new rules. Most notably among them was Regulation A, which was designed to modernize capital formation.
By creating a legal framework for companies to raise funds from the general public (and not just accredited investors), Regulation A has made it possible to truly democratize access to previously exclusive assets for everyday investors — and not just accredited investors. One example of an asset class now available to everyday investors? Real estate.
What is Fractional Investing?
Fractional investing means owning a share or a “fraction” of an asset, rather than the entire asset. This approach directly addresses the financial barrier to entry. Instead of needing the capital to purchase a full share of a costly asset, you can dedicate a specific dollar amount to buy a percentage of a share of that asset.
For example, this model was first popularized by brokerage platforms like Fidelity and Robinhood for stocks and ETFs. If a single share of a company trades at $1,000, an investor can still participate by purchasing $100 worth, thereby owning 10 percent of that share.
This type of fractional ownership has fundamentally broken down barriers to entry in the public markets, allowing investors to diversify their portfolios and gain exposure to assets that were once financially out of reach. It also means that new or non-accredited investors can begin building their portfolios with diversified risk compared to portfolios that focus solely on traditional stocks and bonds, beginning day one.
Now, through regulated platforms, you can buy a fractional share of a rare collectible, a vintage car, a piece of art, or — most notably — real estate.
Traditionally, direct investment in real estate requires a substantial upfront capital commitment, as well as ongoing carrying costs — from down payments and closing costs, to ongoing operational capital expenditures, maintenance work, renovations, and tenant management.
Despite these operational requirements, real estate investing has been known to be a wealth generator. But it comes with a high cost barrier, and requires active management that makes it largely inaccessible to the average person.
Fractional investing provides a compelling alternative to traditional investing by allowing investors to access shares of real estate properties, without the burden of ownership and management, or the large upfront capital commitments.
Let’s consider an individual, non-accredited investor. We’ll call her Maria.
As a first-time investor, Maria has saved $5,000, and wants exposure to real estate investments. Prior to Regulation A, Maria would not have had a path forward.
But through a fractional investing platform, Maria can now invest her $5,000 to gain a proportional equity interest in a newly-acquired apartment complex.
As a result, Maria receives a share of any income that’s been generated from the property (passive income, in this case), and the potential appreciation of the property, all while the platform handles any rehab or renovation work needed to the property, all tenant issues, maintenance, accounting and finance, and the exit of the property.
The fractional investment model offers perhaps the most transformative opportunities within the real estate asset class.
Accessibility & Lower Barrier-to-Entry
You can begin investing in real estate property shares with as little as a few hundred or a few thousand dollars, which is a drastic difference compared to the hundreds of thousands traditionally required for real estate investing.
Diversification Made Easy
Lower entry points allow investors to spread capital across multiple properties in different locations or asset types (residential, commercial, industrial), significantly mitigating risk.
Passive Income Potential
Investments are designed to generate passive income through rental yields. Investors receive their proportional share of the income without dealing with active property management.
Professional Management
Reputable platforms employ experts who identify, acquire, vet, and manage properties, ensuring investors benefit from professional due diligence and reduced operational burden.
Responsible Investing: Understanding Risk & Vetting
When making any type of investment, taking a balanced approach requires acknowledging the potential risks. While fractional investing offers numerous benefits, it’s not without its challenges.
These challenges may include:
Here’s where having a strong fractional investing platform can mitigate these risks by prioritizing rigorous, institutional-grade vetting.
Platforms such as Forte are building a more accessible financial future. We leverage Regulation A to make institutional-grade real estate accessible to both accredited and non-accredited investors. Our expert team handles all aspects of property identification, due diligence, financial transactions, and property development and management.
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