CROWDED HOUSE

Startups are buying properties and wooing first-time real estate investors to purchase shares. The scheme could spell trouble for both renters and aspiring homeowners

- AMANDA HOOVER

THE THREE-BEDROOM, two-bath, split-level house in Fayetteville, Arkansas, looks like a perfect family home: charming brick exterior, lush front lawn, fenced-in backyard that's perfect for hosting cookouts. It's on a quiet street with two schools and a Boys and Girls Club nearby. But this ideal family home has an unusual owner-or owners.

The property, these days known as the Soapstone, is "owned," in a roundabout way, by 102 investors who have collectively purchased just over $100,000 in shares through a company called Arrived Homes. The Soapstone is managed and rented out for $1,600 a month, a bit below the city's average rent of $1,795. Investors, who can buy in for as little as $100, get a cut of the profits.

And it's not just the Soapstone. Arrived, alongside a handful of other so-called fractional investment startups, is adding yet more noise to an already crowded real estate market. Investors can buy into hundreds of similar properties on the company's website, where each listing has an Airbnb-style profile that breaks down the neighborhood, costs, number of bedrooms and bathrooms and return on investment.

In addition to Arrived, there's Lofty AI, which lets people invest using a token system. Another company, reAlpha, sells shares in homes that serve as Airbnbs. Landa lets people invest in shares valued as low as $5 for houses around Atlanta or $20 for Brooklyn apartment buildings. Daniella Lang, a product marketer at the firm, says investors "see this as an American dream opportunity" that lets them build wealth in real estate. Anyone can click a button to invest-but that doesn't really make them homeowners.