DLP Capital Review 2024

How Does DLP Capital Work?

DLP Capital works by raising money from investors for real estate funds. It uses this money to finance real estate investments for the funds and then pays out the project returns to the investors. DLP Capital also uses investor contributions to offer loans to companies in real estate construction and management. DLP Capital has four different real estate funds with different investments, target returns, and goals.

• The DLP Housing Fund focuses on acquiring, improving, and managing income-producing rental properties, usually multi-family. Investors buy ownership equity in these properties through the fund. This fund has a target return of 10% to 12% per year.
• The DLP Building Communities Fund also focuses on equity investments in residential properties, with the side goal of creating more affordable housing. This fund is more growth-focused and has annual target returns of 11% to 13%.
• The Preferred Credit Fund invests in the origination and acquisition of mortgage loans for residential properties. This fund doesn’t invest in properties directly, but instead lends money to real estate operators and builders. The loans have a preferred creditor status secured by the real estate properties and often a personal guarantee from the borrower. This fund has a target return between 10% and 11% a year.
• The Lending Fund makes short-term bridge loans lasting six to 24 months to real estate businesses. The fund has a target return between 9% and 10% a year.

These four funds represent a wide range of possible investment strategies and opportunities for investors. For this reason, we rated DLP Capital as the best fund for real estate investment selection.

Key Features

DLP Capital only works with accredited investors in the United States. You must qualify either by having a net worth over $1 million (excluding your primary residence), an individual income over $200,000 a year, or a joint income with your spouse over $300,000 a year. If you aren’t an accredited investor, you could consider DiversyFund, Fundrise, or Yieldstreet instead.

DLP Capital requires a per-fund minimum investment of $200,000. If you want to invest in more than one, each will require at least $200,000. Once you’ve met the initial minimum investment, you can make future contributions for any amount.

DLP Capital only offers curated portfolios, which it builds for investors. You can’t pick between individual properties and projects to invest in. If you’d like to build your own portfolio, consider CrowdStreet or EquityMultiple. While DLP Capital doesn’t offer much investment flexibility, the system is easy to research and use.

The DLP Capital funds are constantly looking for new projects and investment opportunities. You can automatically reinvest your dividends and profits into a fund for future growth. 

Fees

DLP Capital only charges fees after delivering a minimum preferred return to investors. The preferred return ranges from 6% to 9% annually, depending on the fund. After providing this return, DLP Capital charges a 2% annual management fee on its funds. DLP Capital rebates part of the fee for large accounts. Investors with over $1 million receive a 0.5% fee rebate, while investors with over $10 million receive a 1% fee rebate.

After DLP Capital has delivered the preferred return and collected its annual management fee, it will collect 20% of all future profits while providing the remaining 80% to fund investors.

Transparency

We considered how transparent each company is in revealing information online for potential clients. We determined DLP Capital to be moderately transparent. It did an excellent job of revealing information about its fees and reporting options on investment performance. However, DLP Capital was not quite as transparent regarding liquidity and how investors get their capital back.

Liquidity

Since real estate is a long-term investment, crowdfunding platforms usually restrict when you can get your money back. DLP Capital does have some restrictions but is reasonably liquid overall. Its Housing and Building Communities funds provide an annual redemption option. Once a year, investors can request to get money back. DLP Capital’s Preferred Credit and Lending Funds are more liquid because they do not invest directly in real estate. These funds allow you to redeem your money after 90 days’ notice. 

DLP Capital has no lock-up period, where you must keep your money with them for several years. You can cash out according to the redemption periods. There’s no cap on the maximum investment with DLP Capital. You can contribute as much as you want to its funds.

Investment Selection

DLP Capital runs four investment funds with different real estate investments and objectives. These funds have slightly different designs. Housing and Building Communities offer equity investments where you buy into real estate properties. Preferred Credit and Lending are real estate debt and mortgage funds, including private notes for real estate loans.

The Housing Fund and Lending Fund operate as private real estate investment trusts (REITs). By law, REITs must distribute at least 90% of their annual income to shareholders. They are better for immediate income. The Building Communities and Preferred Credit funds operate as private real estate funds. They can hold onto earnings to reinvest them for future growth. They offer less immediate income with higher growth potential.

This combination lets you find a real estate strategy that fits your goals. For this reason, we rated DLP Capital as the best for real estate investment selection. 

Sectors and Domains

DLP Capital primarily invests in residential properties, both single-family and multi-family units. DLP Capital also invests in mobile home developments. Its credit funds primarily lend to real estate builders and companies working on single-family and multi-family residential properties. It focuses on projects in the Sunbelt region in the United States.

DLP Capital does not invest in industrial projects. It could invest in commercial projects. For example, some funds invest in self-storage units. However, DLP Capital’s primary focus is residential real estate. Acretrader and RealtyMogul are platforms with more of an industrial and commercial focus.

Educational Offerings 

DLP Capital has decent educational offerings. It has a comprehensive frequently asked questions (FAQ) section, as well as robust online materials explaining how its funds work for investors. DLP Capital stood out for offering webinars and live events/conferences. These courses teach affluent investors to manage their wealth and estate plans through real estate. DLP Capital also has a podcast and a blog. However, the blog mainly focuses on market insights and not so much on teaching people about the basics of real estate investing.

Customer Support 

DLP Capital’s offers decent human-based support to its customers. It offers phone customer service during business hours, Monday to Saturday. You can also ask questions by email or by submitting an online question form. However, DLP Capital does not offer a live chat or a chatbot. It also doesn’t have a mobile app. It’s not as tech-focused as traditional crowdfunding platforms where you build portfolios, such as DiversyFund and HappyNest.

The Bottom Line

DLP Capital is an excellent choice for affluent investors who want to add real estate to their portfolios without doing the research themselves. DLP Capital offers an intriguing combination of curated funds for different strategies. The funds all have solid target returns. They pay a minimum preferred return to investors first before DLP Capital collects any money. DLP Capital partners with the advisors of affluent investors, including figuring out how these investments can meet their clients’ long-term financial planning and charity goals.

DLP Capital is not a good choice if you are a DIY investor. You are limited to the funds offered by DLP Capital and cannot pick between individual real estate projects. For this reason, DLP Capital does not provide much technology for investors. There’s no mobile app or platform to research properties; you’re just selecting between four funds. You must also be an accredited investor with at least $200,000 to use DLP Capital, limiting it to the very wealthy. If you are in this select group, the boutique experience and investment selection from DLP Capital are well worth a look.

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 DLP Capital?

DLP Capital is a private financial services and real estate investment firm. It raises money from high-net-worth accredited investors to create real estate funds. DLP Capital has both real estate equity funds, which buy ownership stakes in properties, and debt funds, which lend money to those working in the real estate industry. 

Is DLP Capital Legit?

Yes, DLP Capital is legit. It has been in business since 2006 and has over $5 billion in assets under management. DLP Capital does not have any major reported incidents of fraud. The company does not post any information about how many projects it funds or the success rate. However, it only collects fees after paying a preferred return to its investors, showing it has considerable skin in the game to perform well. 

Is DLP Capital a REIT?

Two DLP Capital funds operate as REITs: the Housing Fund and the Lending Fund. This means they must distribute at least 90% of annual earnings to investors yearly. The other two funds operate as private real estate funds. They have more ability to retain earnings to reinvest for future growth. They offer less ongoing income than the REITs but more upside potential.

What Is the Minimum Investment for DLP Capital?

$200,000 is the minimum investment for DLP Capital. You must contribute at least this much to use each fund. If you want to invest in multiple funds, you need $200,000 each. Your future contributions can be any size once you’ve met the investment minimum.

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.