TL;DR: Roots pays you two different ways, and it's easy to confuse them. Distributions are the quarterly cash dividends that land automatically — you don't have to "withdraw" those. Redemptions are when you sell your shares back to get your principal out, and those only happen in quarterly windows. Pull money out inside your first year and you pay an early-withdrawal penalty (currently around 8%); after one year, redemptions are penalty-free but still quarterly and subject to "gate" provisions that let Roots limit how much is redeemed at once. It's long-term money by design. Here's exactly how each path works, what it costs, and how long it takes.

Roots (officially the Invest With Roots Roots Investment Community Fund) is a SEC-qualified Reg A+ private REIT with a $100 minimum. We covered whether it's legit and what it returns in our honest Roots review — the short version is that it's a real fund, not a scam, but it's illiquid on purpose. This guide is the companion: the mechanics of actually getting your money back out.

Distributions vs. redemptions — know which one you want

This is the single most common point of confusion, so it's worth being precise:

  • Distributions are your share of the fund's rental income and gains, paid quarterly in cash. When you invest, you choose to either have them auto-reinvested (buying more shares, compounding) or paid out to you. If you just want the income, you don't redeem anything — you simply set distributions to "cash" and they arrive every quarter.
  • Redemptions are how you get your principal back — you're asking the fund to buy your shares back at the current share price (NAV). This is what people usually mean by "withdrawing," and it's the part with rules attached.

If your goal is income, distributions do the job with zero penalty and no waiting for a window. If your goal is your capital back, you're in redemption territory — keep reading.

The 1-year rule and the early-withdrawal penalty

Roots is built around a one-year holding period. The trade-off is deliberate: because investors commit for at least a year, the fund can hold real properties without being forced to sell into a bad market to cash people out.

  • Redeem within your first year: you pay an early-withdrawal penalty — currently cited at around 8% of your withdrawal. That's a big haircut, and it can easily wipe out a year of returns, so treat the first 12 months as genuinely locked.
  • Redeem after one year: no penalty. You get the current share price with nothing skimmed off for leaving.

One honest caveat: the exact penalty figure lives in Roots's Offering Circular and has changed over time (earlier investors saw a 6% figure; current 2026 materials cite ~8%). Always confirm the number that applies to your shares in the official documents before you count on it.

Redemptions only happen quarterly

Even after the first year, you can't withdraw on any random Tuesday. Roots processes redemptions in quarterly windows. Practically, that means:

  1. You request a redemption through your Roots dashboard.
  2. Your request is queued for the next quarterly redemption date.
  3. After the window processes, the cash is sent to your linked bank account.

So the realistic timeline to get principal back is "this quarter or next," not "a few business days." If you invest right after a window closes, you could be waiting up to ~3 months for the next one, plus processing time. This is still far more liquid than the 5-year lock-ups common at other real-estate platforms — but it is not a savings account, and you should never park money here that you might need next month.

Gate provisions — the fine print that actually matters

Here's the part most "how to withdraw" write-ups skip. Roots's redemption program is subject to gate provisions set out in the Offering Circular. In plain English: if a lot of investors try to redeem at the same time, the fund can limit or temporarily suspend redemptions to avoid a fire-sale of properties.

That's not a scam — it's standard for a fund that owns illiquid real assets, and it exists to protect the remaining investors. But it means your quarterly liquidity is conditional, not guaranteed. In a calm market you'll almost certainly get redeemed on schedule; in a stressed one — exactly when you might most want out — redemptions are the thing most likely to get gated. Size your position accordingly: Roots should be money you're comfortable leaving invested for years, with quarterly liquidity as a nice-to-have, not a guarantee.

There's also a practical ceiling: investors can generally redeem up to $100,000 per quarter, which only matters for larger accounts but is worth knowing.

Step-by-step: how to actually request a withdrawal

  1. Decide distribution vs. redemption. Want income? Set distributions to cash — done. Want principal? Proceed to redeem.
  2. Check your hold date. Confirm whether each tranche of shares has passed its one-year mark. Money added later starts its own clock.
  3. Log in and request the redemption from your Roots account dashboard, entering the amount (or share count) you want back.
  4. Note the next quarterly window. Your request processes on the upcoming redemption date, not immediately.
  5. Wait for the payout to hit your linked bank account after the window closes and settles.
  6. Keep records for taxes. Redemptions and distributions can both be taxable events — distributions may include ordinary income and return-of-capital components, and selling shares can trigger a gain or loss. This isn't tax advice; keep your 1099s and talk to a professional if the amounts are meaningful.

Is the illiquidity worth it?

That depends entirely on your time horizon. Roots reports strong historical returns and a genuinely low $100 entry point, and quarterly redemption is unusually flexible for this asset class. If you're investing money you won't need for at least a few years, the one-year rule and quarterly windows are a reasonable price for access to private real estate. If there's any chance you'll need the cash sooner, the ~8% early penalty and conditional liquidity make it the wrong home for that money — a high-yield savings account or a liquid brokerage account is a better fit.

For a fuller picture of returns, fees, and risk before you commit, read our full Roots review, see how it stacks up in Fundrise vs. Ark7 vs. Roots, and understand what happens if a real-estate app shuts down. If you've decided it fits your timeline, you can open an account at Invest With Roots.

Frequently asked questions

How long does it take to withdraw from Roots? Principal redemptions are processed on quarterly windows, so the realistic timeline is the current or next quarter plus processing time — not a few business days. Quarterly cash distributions, by contrast, arrive automatically each quarter if you've set them to pay out rather than reinvest.

What is the Roots early-withdrawal penalty? If you redeem within your first year, you pay an early-withdrawal penalty currently cited at around 8% of the amount withdrawn. After one year, redemptions are penalty-free. Confirm the exact figure in the current Offering Circular, as it has changed over time.

Can Roots refuse or delay my withdrawal? Potentially, yes. Redemptions are subject to gate provisions — if too many investors redeem at once, the fund can limit or pause redemptions to avoid selling properties at a loss. It's standard for real-estate funds, but it means quarterly liquidity is conditional, not guaranteed.

Do I have to withdraw to get paid by Roots? No. Roots pays quarterly distributions (dividends). You can set those to pay out in cash without redeeming any shares. You only go through the redemption process when you want your principal back.

Is there a limit on how much I can withdraw? Investors can generally redeem up to $100,000 per quarter, subject to the same gate provisions. For most small accounts this ceiling never comes into play.

Sources: Roots Investment Community Fund, Q1 2026 Roots Community Update, and platform comparison reviews at Lofty and CrowdfundedWealth. Figures reflect Roots's 2026 materials and can change — always verify current terms in the official Offering Circular. This is general information, not financial advice; real estate investments carry risk including loss of principal.