Origin Investments Review 2024

Origin Investments offers closed-end funds for accredited investors to participate in multi-family real estate investment opportunities. Its formula for success includes data-driven algorithms to guide fund managers’ decisions on whether to acquire existing properties or build them from the ground up. This approach helps the company maintain a sharp focus on managing the risk of commercial real estate while providing attractive returns to investors. The funds also remain well positioned to potentially outperform similar investment opportunities in multi-family real estate despite some formidable challenges that lie ahead.

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Pros & Cons 

Pros Explained

• Minimum investment of $50,000 for accredited investors: Founders and co-CEOs David Scherer and Michael Episcope wanted to make real-estate investments available beyond institutional-level investment. However, Origin Investments makes its services available to accredited investors only.1  
• Long track record of managing property risk: The company’s founding in 2007 might seem like the worst possible time to start a real estate investment company, but the experience fashioned Origin Investments’ approach of managing risk from the ground up. The company’s innovative use of data and its Origin Multilytics forecast has helped its fund managers create successful offerings over the years since its founding.
• Funds target an internal rate of return (IRR) of 9% to 12%: Origin Investment’s offerings change over the years to meet the shifting investment landscape, with the current two offerings being closed-end funds. The IncomePlus Fund targets 9% to 11% IRR from growth and income opportunity, while the QOZ Fund III focuses strictly on growth to target 10% to 12% IRR.
• Funds are structured for tax efficiency: The funds currently offered provide tax benefits. The IncomePlus Fund is structured as a real estate investment trust (REIT) to allow dividends to be paid at long-term capital gains rates, while the QOZ Fund III provides investors the potential for tax elimination if they keep their investments with the fund for 10 years or more.
• Fund managers seek growth opportunities: Data-driven approaches guide fund managers to seek out multi-family properties in areas that have already shown a pattern of growth and are forecasted to continue growing. This projection is calculated independently from the impact of any government incentives from Qualified Opportunity Zones (QOZs).

Cons Explained

• Highly illiquid investments with no secondary market available: The common challenge for any real estate investment is the illiquidity of the underlying assets. While some investment companies try to provide a secondary market for their investors to make an early exit, Origin Investments has no available secondary market.
• Long investment lock-up periods: The funds offered by the company have terms dictated in a private placement memorandum (PPM) available only to accredited investors. These terms specify a holding period of either five or 10 years, with procedures and penalties spelled out for withdrawing from the fund before the holding period ends.
• Multi-family investments may face unusually difficult challenges: 2022 brought multi-family real estate to a 50-year high in supply of new rental units, an oversupply that had a negative impact on rent growth during 2023.23 According to the company, this impact could spill into 2024 and create challenges for fund managers to deliver target returns.4

Company Overview

Origin Investments was founded on the premise of making commercial real estate investing more accessible to individuals who could weather the risks of illiquid investment. After more than a decade in business and three major market shocks, their business model seems to work. 

So what does Origin Investments do? The company seeks out apartment complexes to buy or build in desirable areas that show a trend of increasing demand. They also look for tax incentive opportunities in those same areas. They raise money from accredited investors into closed-end funds and work to assemble a portfolio of multi-family properties that they believe will likely outperform similar investments over the coming five to 10 years. 

Accredited investors who can be patient and keep their money in place for several years could participate in profits from multi-family real estate in the same way institutional investors have done for decades. The company has built a reputation for offering unique, data-driven forecasts that inform its own investing decisions, and this is its primary differentiator.

How Does Origin Investments Work?

Origin Investments seeks to keep things simple for investors while still giving them access to sophisticated real estate investments. Its management teams work to assemble a well-constructed portfolio of properties that offer the right mix of opportunity and value. They rely heavily on proprietary analytical models that forecast potential rent prices and property values in the years ahead based on millions of data points.5 This allows the company to offer two closed-end funds, IncomePlus and QOZ Fund III, at reasonable rates of expense, while controlling for market risks as much as possible. 

Key Features

Real estate funds bundled as REITs or LLPs are not new, but the key features of Origin Investments’ offerings boil down to the company’s proprietary analytic and forecasting models. That’s what gives the funds their unique value proposition. As a result, some of the following features, found in competing funds, are absent from the IncomePlus and QOZ funds, but the company believes the value is more than compensated for by the quality of the investment portfolios in each fund.

• Available to accredited investors: The SEC defines accredited investors as those with a net worth of more than $1 million or an annual income north of $200,000. This is also the group most likely to be looking for longer-term, stable returns and income-producing investments.
• Investment minimum of $50,000: The fund makes investment opportunities available starting at $50,000. This amount is reasonable for accredited investors yet large enough to be beyond most retail investors. That’s because it is also tailored for investors who are willing to hold their investments for five or 10 years, so the higher starting point makes sense.
• Ease of use: The simplicity involved in these funds includes the fact that real estate investment and management, in all its complexity, is distilled down to holding units in one of the two funds. The choice is easy to make based on whether your goals are to return income or gain capital appreciation.
• Curated portfolios: Origin Investments offers value through its two funds, both of which are curated to a specific investor objective. The choices are limited to these two funds based on the need for a monthly income or capital gain.
• Customizable portfolios: The carefully constructed portfolios for each fund at Origin Investments offer value to all potential investors in the fund. The company does not offer investors the opportunity to select a curated portfolio of assets from among the company’s investments.
• Reinvestment opportunities: Whether investors in either fund can select to have dividends reinvested in the same fund, or transferred to another open fund once their holding period has completed, is not specifically disclosed in the company’s promotional material.
• Countries where accounts are available: Origin Investments currently allows accounts to be open within the U.S. only. That said, most U.S.-based real estate crowdfunding platforms do not allow international investors to use their platforms. International investors should look to real estate crowdfunding platforms such as Cityvest and DiversyFund to get into the space.6   

Fees

Unfortunately, management fees are not listed on the website but are available to accredited investors through the PPM documentation. The documentation should take you through everything you need to know to decide whether or not the investment is a good fit for you.

Transparency

While Origin Investments mentions risk management topics in its education and promotional materials, it isn’t fully transparent about the liquidity of investors’ cash being held in the funds. The company does explain that procedures exist for withdrawing money from investment accounts, and mentions that penalties are applied for doing so, but doesn’t divulge what the procedures are or what the amount of the penalty is except within the PPM documentation. It also doesn’t make mention of reporting procedures and frequency.

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Liquidity

Real Estate funds are typically constructed of illiquid assets such as commercial properties or multi-family structures. These funds are no exception to that. Some funds make policies about redemptions and place restrictions on withdrawals, while this company’s funds encapsulate all such requirements into one: the holding period. Restrictions on investment caps, redemption options, and the total number of investors within the fund are not disclosed publicly. The PPM documentation may include some details about redemption procedures and penalties. The holding (lock-up) period is five years for the IncomePlus fund and 10 years for QOZ Fund III.

Investment Selection

Origin Investments’ funds are narrowly focused on multi-family assets. Other types of investment selection, whether for accredited or non-accredited investors, are not applicable to these funds. The funds target apartment complexes ranging from a few dozen units and larger. Existing listings for open and closed funds show that the company has built portfolios from apartment buildings primarily located in southern U.S. states, with additional properties in Colorado, Phoenix, and Las Vegas.

IncomePlus Fund

This fund is tailored with the objective of providing investors with both monthly income and opportunities for investment growth. The fund seeks to provide a 9% to 11% net annual return from a selection of multi-family properties in key target markets. The market locations are selected based on sub-ZIP code research and a wide range of data sources that indicate a strong expectation for relatively strong rent growth and housing demand.7

QOZ Fund III

The Qualified Opportunity Zone (QOZ) funds offered by Origin Investments operate as standalone funds, but can also work as a series of limited liability partnerships (LLP). When one closes and another opens, it allows previous investors to re-invest their money without tax consequences, provided they meet the holding period requirements. 

The QOZ Fund III is constructed for capital growth opportunities selected exclusively from properties likely to maintain good cash flow while capturing appreciation from rising demand for rental property and rising rent prices. QOZ funds also attempt to take advantage of government incentives provided to specific cities or regions. The incentives allow investors that remain in the fund for the entire holding period of 10 years favorable tax treatment and, in some cases, eliminate federal income tax.8

Educational Offerings

The company offers a variety of educational resources including articles, videos, and live presentations. The information covered is tailored to investors, advisors, or both and covers both market trends and investing strategy discussions. One particularly useful resource for all potential investors in real estate is “The Comprehensive Guide to Investing in Private Real Estate,” written by company co-founder Michael Episcope.9

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Customer Support 

Customer support is available through email, chat form, live chat, and a toll-free phone number. The company also has a few regional offices that make face-to-face contact possible for investors who insist on conversing with staff.10

The Bottom Line

Origin Investments offers a narrow focus on multi-family building investment. It uses proprietary market analytics to decide whether to buy existing properties or build from the ground up. From millions of data points, it forecasts the likely trend of rent prices and apartment demand. This method has served the company well and helped it to thrive and perform well even through market stresses such as the pandemic and recent interest-rate fluctuations. The offerings look attractive for someone who wants to invest in commercial real estate but is concerned about the potential for high risk in the current economic environment.

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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 Origin Investments?

Origin Investments is a focused investment company offering closed-end funds structured as a REIT or LLP. It uses its own sophisticated analytics to forecast rent and pricing trends to help mitigate the risk of holding its curated portfolios.

Is Origin Investment Legit?

Yes. The company has been around since 2007. It survived the financial crisis, the pandemic, and the sharp rise in interest rates in 2022 and 2023. Its posted track record shows that it has weathered challenges over the years, but still managed to deliver significant returns.

What Are the Fees for Origin Investment?

Fund management fees are not disclosed on the website, but are made available in private placement memorandums to accredited investors considering the company’s offerings.

Who Can Invest With Origin Investments?

Currently, the company only caters to accredited investors. Investors who are not accredited may want to look into Fundrise or Arrived Homes.

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.

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