The minimum is real. You can put in $500 on a platform that says $500. The fees are charged separately from it and work differently depending on which kind of product you're buying.
On the low-minimum platforms you're usually buying into a fund that holds many properties. The sponsor charges an annual management or advisory fee on the money you have invested. Across the industry that's commonly somewhere around 1% a year, and the exact number is stated in the offering documents rather than in the marketing page. On $500 that's about $5 a year, so it isn't the thing that makes a small position pointless. A small position is limited by being small.
On the deal-by-deal platforms, where minimums run $5,000 or $25,000 or higher, the fees sit inside the project. The sponsor typically takes an acquisition fee when the property is bought, then an annual asset management fee while they run it. Above a stated return threshold they also take a share of profits. None of that appears as a charge to you. It comes out of the deal's cash before any distribution reaches you, which is why the advertised target return should already be net of it. Ask the platform to confirm in writing that it is.
No license and no insurance on your side. You're a passive investor, and the property insurance is bought inside the deal by the sponsor. One thing worth knowing before you shop: many deal-by-deal offerings are restricted to accredited investors, which is a defined securities term with income and net worth thresholds, so the low-minimum funds are generally the ones open to everyone. Your own tax reporting on any of it is a CPA question.
