HappyNest Review 2024

A real estate investment fund designed for smaller investors looking to get started with just $10, but note that HappyNest only offers one investment fund.

HappyNest runs a real estate investment fund designed for smaller investors. You can invest with HappyNest for just $10, versus the thousands required at many other real estate crowdfunding platforms.1 In exchange, HappyNest only offers one investment fund. It’s not ideal for investors with large portfolios looking for many options to customize.2

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Pros & Cons 

Pros Explained

• Low $10 investment minimum: While some crowdfunding platforms require a minimum contribution of thousands, HappyNest accepts investors starting with just $10. You don’t need to be an accredited investor to use this platform.3
• Decent target returns: HappyNest aims for a target internal rate of return (IRR) between 12% to 15% a year. This is higher than the S&P 500.2
• Pays quarterly dividends: HappyNest aims to pay investors a quarterly dividend from its real estate income. HappyNest automatically reinvests the dividends back into the fund for future growth.45
• Moderate fees: HappyNest charges a 0.5% asset management fee for running its REIT. Other crowdfunding platforms charge 1% to 2% a year.6
• AI assistant to answer questions: Besides phone and email customer support, HappyNest offers an AI assistant. This tool can answer questions about HappyNest, investing, and personal finance.

Cons Explained

• Minimal investment selection: HappyNest only runs one REIT for all its investors. There are no different options for different investment preferences. There also are no options designed for high-net-worth accredited investors.2
• No portfolio customization: HappyNest makes all the real estate investment decisions. You have no input over which properties go into your portfolio when you invest with HappyNest.2
• Has a three-year lock-up period: If you invest with HappyNest, you usually will not get your money back for three years. It’s not a good option if you need flexible access to your cash.7
• Not transparent about investment fees: HappyNest does not clearly disclose what it charges investors on its website. Instead, it refers potential users to a lengthy, technical SEC document, where this information is not easy to find.
• Minimal educational offerings: HappyNest runs a basic blog and frequently asked questions page. It doesn’t provide videos, live training, or its own market insights.

Company Overview

HappyNest is a crowdfunding platform that runs a real estate investment trust (REIT). The founders launched the company in 2017 to make commercial real estate investing available to smaller investors, who have traditionally been blocked out of these markets because of high contribution and income requirements.6

HappyNest is based in Charlotte, North Carolina. It recently launched a partnership with Rainbow Realty Group, a finance company focused on real estate opportunities in the cannabis space. Through this partnership, HappyNest added five properties to its investment fund. HappyNest does not disclose how many investors it has or how much money it manages. It does say that over 100,000 users have downloaded its app.2 HappyNest has not faced any significant regulatory action or scandals since its founding.

How Does HappyNest Work?

HappyNest works by collecting money from many small investors for its REIT. HappyNest then invests this money to acquire and manage a portfolio of real estate. It collects rental income from these properties and aims to sell them in the future for a profit before returning these profits to the investors. As a REIT, HappyNest must distribute at least 90% of its annual net income to the investors.5

HappyNest only offers one ongoing REIT. It constantly looks for new properties to acquire for the fund as it grows its user base and capital. As of January 2024, HappyNest’s REIT had 15 properties.2

HappyNest targets a 12% to 15% annual IRR for its investors. It also looks to generate ongoing cash flow from the properties to pay quarterly dividends. HappyNest automatically reinvests your dividends back into the REIT for more growth. You cannot receive them as cash.

HappyNest only requires a $10 minimum investment to get started and runs the program through its mobile app. There’s no desktop version. It also offers a Loose Change program to help users invest more. You connect your debit card, credit card, or bank account to your HappyNest account. After every purchase, HappyNest will round the transaction to the nearest dollar and put the extra money into your REIT investment. This feature is free for six months. After that, it costs $1 per month to use.8

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Key Features

HappyNest has some attractive features compared to the typical real estate crowdfunding platform or private REIT. First, HappyNest works with both non-accredited and accredited investors in the United States. It accepts investors willing to contribute as little as $10. Many other top real estate crowdfunding platforms only work with accredited investors (who must have a net worth of over $1 million, a single income of over $200,000 a year, or a joint married income of over $300,000 a year). If you’re in this group and would like a platform that focuses more on high-net-worth investors, consider CrowdStreet or DLP Capital.

HappyNest is also easy to use, with a simple, clean app that walks investors through the process. It seems geared towards investors who may not be experienced with real estate investing and need help. 

HappyNest simplifies the investment process because it only offers one REIT. It curates this portfolio and decides which properties to include. In exchange, you don’t have any investment flexibility. You can’t pick between different investment funds with HappyNest REITs. You also cannot design your own customized portfolio by picking between individual properties.2 

Fees

HappyNest does not charge a monthly platform fee or commissions when you buy or sell shares of its REIT.9 As a user, you could owe a $1 per month administration fee for having an account. HappyNest will deduct this monthly fee from your linked bank account.

The REIT itself charges a 0.5% annual management fee. HappyNest could also deduct 3% of the value of every property it acquires for the fund and 3% of the value of every property it disposes/sells for the fund. The REIT deducts these HappyNest fees before distributing the remaining profits to investors.6 

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Transparency

HappyNest does a good job disclosing its reporting options and frequency of sharing information about fund performance and taxes with investors. HappyNest also does a good job explaining the liquidity risks of investing in its fund, clearly warning investors that its system may not be a fit for those with short-term objectives or who may need to cash out quickly.

However, HappyNest scores poorly when it comes to fee-related transparency. Its website promotes that it doesn’t charge a platform fee or commissions. However, it doesn’t share the other HappyNest fees on its website, making it seem like the service is free. Instead, it directs possible investors to a lengthy, complex SEC document to find this information.

Liquidity

Since buying real estate is a long-term investment, HappyNest restricts liquidity. When you invest, the fund gives you a lock-up period for when you will get your money back. It’s usually three years. During this lock-up period, HappyNest may decide to allow an early redemption option for investors. It’s up to the board’s discretion, so there is no guarantee this will happen after you sign up.7

If HappyNest permits an early redemption option, it could deduct a penalty of 1% to 3% of the value of the shares you sell early. The less time you’ve held the shares, the larger the penalty:

• 6 months to a year = 3% penalty, 97% returned
• 1 to 2 years = 2% penalty, 98% returned
• 2 to 3 years = 1% penalty, 99% returned

You need to wait until the end of the three-year lock-up period to get the full value of your investment back without penalty.6

Investment Selection

The HappyNest real estate investment selection is minimal. It only offers one private REIT for all investors. HappyNest does not provide different funds for different investor goals. It also doesn’t offer other real estate investments besides REITs. Finally, it does not offer other alternative investments besides real estate. You can’t buy into artwork, venture capital, wine, or other assets like you can with other companies such as DiversyFund and Yieldstreet.

Sectors and Domains

HappyNest primarily invests in commercial real estate. It focuses on single-tenant properties with short-to-medium-term leases. Its goal is to balance ongoing cash flow and asset appreciation for long-term gains. HappyNest has begun expanding its portfolio to other properties, including industrial and multi-family residential properties. It believes diversifying into other sectors and domains will reduce market risk and increase long-term returns. Ultimately, the HappyNest real estate portfolio only invests in 15 properties. Given this small portfolio size, it doesn’t have the broadest scope of investments.2

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Educational Offerings 

HappyNest only offers basic educational materials for its users. It also publishes a blog with articles on real estate investing and a more comprehensive guide/white paper on investing in real estate for beginners. HappyNest does not offer videos or live training to teach its users. It also does not publish its own investment market research and analysis.

Since investors with HappyNest don’t have to make any decisions for the properties, they might not need as much educational support and research. Competitors like Arrived and EquityMultiple offer considerably stronger educational offerings than HappyNest.

Customer Support 

HappyNest provides customer support by phone or email. It also has an online FAQ answering questions about the system. If you can’t find the answer you’re looking for on the FAQ, you can try using HappyNest’s AI smart assistant called Eggmund. It can answer questions about using HappyNest, general investing, and personal finance. 

User reviews on the Apple App Store and Google Play are mostly positive about HappyNest’s customer support. Reviewers said the human customer support specialists were easy to reach and responsive to issues.1011

The Bottom Line

If you’re new to investing in real estate and don’t have much money in your portfolio, HappyNest could be a solid way to get started. You only need $10 to open an account. HappyNest’s REIT has a decent target return, pays quarterly dividends, and has reasonable overall fees. Just be warned that if you use HappyNest, you’re likely locking up your money for three years, a common industry feature of real estate investing that can catch new investors off-guard.

If you’re a more sophisticated real estate investor who wants more investment flexibility, HappyNest likely is not for you. It only offers one REIT and there’s no investment selection or option to customize your portfolio. HappyNest also focuses on smaller investors. High-net-worth accredited investors would likely benefit from using a crowdfunding platform made for this different market.

Why You Should Trust Us

Investopedia analyzed 19 real estate crowdfunding companies and scored each based on eight major categories and 38 criteria that are crucial in evaluating the offerings and usability of these platforms. We used this data to review each company for their fees, investment selection, transparency, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best real estate crowdfunding platforms since 2020.

What Is HappyNest?

HappyNest is a REIT and real estate crowdfunding platform. It focuses on attracting smaller investors who may be new to investing in real estate. HappyNest only requires a minimum contribution of $10 to get started. HappyNest then uses this money to buy properties for its REIT. It pays dividends and profits to investors based on the performance of the real estate portfolio.

Is HappyNest Legit?

Yes, HappyNest is legit. It has filed its offering statement with the SEC, and the offer qualified under Regulation A. HappyNest discloses all the key details about its investments and fees in this filing. HappyNest’s leadership team has over 100 years of real estate experience. This team carefully screens each investment, as HappyNest only has 15 properties in its portfolio.12

HappyNest also invests in considerable app security measures to protect its users.13 Finally, HappyNest has not run into any significant scandals or disciplinary actions. Just because HappyNest is a legit investment opportunity does not guarantee you will make money using it. Your returns depend on the performance of HappyNest’s real estate portfolio.

Is HappyNest Worth It?

HappyNest could be worth it if you have a small portfolio and want to invest in real estate long-term. HappyNest has a target annual return of 12% to 15%, higher than the S&P 500 historic return. Although you only need $10 to invest, HappyNest does lock up your money for three years. You can’t cash out whenever you want, like with a mutual fund or public REIT. You need to decide whether the lower liquidity is worth higher potential returns.

Is Crowdfunding a Good Idea?

Crowdfunding is a good idea for investors who understand what they are buying into. With crowdfunding, you combine your money with many other investors to buy into projects you couldn’t afford on your own. You could use crowdfunding to buy into large real estate properties or to fund a startup. However, the risk of investment losses is higher with crowdfunding. You also give up control because it’s not your effort alone but a group effort managed by the crowdfunding platform.

How Much Do You Make From Real Estate Crowdfunding?

Real estate crowdfunding platforms typically aim for returns between 10% to 15% a year. Some projects and funds aim for even higher returns. You usually agree to lock up your money for several years in exchange for higher returns. Your return is also not guaranteed. You could earn less or even lose money if real estate investments do poorly. Before joining, you must carefully research which platform you use and the investment options. 

How We Review Real Estate Crowdfunding Platforms

To evaluate and review real estate crowdfunding platforms, Investopedia’s team of researchers, data collectors, and industry experts spent nearly two months conducting in-depth industry research, company survey data collection, and hands-on evaluations of 19 companies. We grouped the 38 criteria that we collected, like investment selection and minimums, holding periods, and curated portfolios, into eight categories. We then scored these criteria and weighted the categories to determine which real estate crowdfunding platforms are best for both accredited and non-accredited investors:

• Fees: 15%
• Account Services: 15%
• Investment Selection: 15%
• Liquidity: 12.5% 
• Transparency: 12.5%
• Sectors and Domains: 12.5%
• Customer Support and Usability: 10%
• Educational Offerings: 7.5%

Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of real estate crowdfunding platforms. Read our full process for more information on how we review real estate crowdfunding platforms.