Fundrise is a real estate investment company based in Washington. It was founded in 2010, and it was among the first companies to invest in real estate, taking a crowdsourced approach: by keeping minimum investments at a minimum, they could reach more investors, which meant more capital to make investments, which attracted even more investors. Since then, many more companies have taken this approach, albeit none with minimums as low as Fundrise’s.
Compared to public REITs, private REITs like those offered by Fundrise can be less liquid, and you may be forced to lock in your investments for the long term - or risk paying an early withdrawal fee. There are many factors at play, and even though not all funds are so restrictive, it will depend on the particular platform. In this review, we will go over four of the largest competitors to Fundrise, including options for accredited and non-accredited investors.
Keep in mind this is a quick comparison of the most important factors of these platforms; for a more in-depth analysis, here’s our full Fundrise review. Without further ado, here are our top alternatives to Fundrise:
DiversyFund is a real estate investing platform that was launched in 2014. It is based in San Diego, California, and offers services to accredited and non-accredited investors. Like other companies in this industry, it crowdsources capital from investors to make large purchases of properties, usually institutional-grade multifamily assets.
DiversyFund pays out dividends, but it may be difficult to withdraw, as your money may be automatically reinvested in the fund. This platform is very accessible with a relatively low minimum of just $500, and returns are very competitive, ranging from 11% to 15% (average from the last four years). Its biggest downside is the fees; you can end up paying up to 8% when accounting for management, developing fees, and additional fees. Keep in mind this percentage is paid when the property is liquidated.
In this full DiversyFund vs. Fundrise review, we break down all the differences between the two and make a recommendation based on the type of investor you are.
RealtyMogul is a real estate investing platform that was launched in 2012 and is based in Los Angeles, California. It offers access to accredited and non-accredited investors, and like DiversyFund, it takes a crowdfunded approach.
It has a somewhat prohibitive minimum investment of $5,000 and annual returns ranging from 6% to 8%. Fees are on the low side, ranging from 1% to 1.5% (additional fees may apply).
RealtyMogul has over $500 million in assets and over 220,000 active investors. Some features include automatic reinvesting (Starting at $250/month) and access to diversified investments. RealtyMogul focuses on the residential, office, industrial, and retail sectors.
In this complete RealtyMogul vs. Fundrise review, we compare all Fundrise plans and account types against RealtyMogul’s two types of investment (MogulREIT I & MogulReit II), and make a recommendation based on years of historical data.
Founded in 2012 by Darren Powderly, CrowdStreet is an accredited-investors-only real estate investing platform. It has a minimum investment of $25,000 and has traded over $3 worth of assets since inception.
CrowdStreet has some of the highest returns for accredited platforms, ranging from 15%-17%, and it has completed over 700 deals, mostly in the commercial property sector. All CrowdStreet assets are insured by the SIPC for up to $500,000.
CrowdStreet is the first accredited-investor-only platform that we compared with Fundrise; in this CrowdStreet vs. Fundrise review we compare key factors that will help you decide if this platforms is for you - and here’s a little spoiler: just because a platform is for accredited investors only doesn’t mean it’s the right option for you.
Launched in 2015, Roofstock is an investing platform that focuses on the very profitable Single-family rental home sector. It targets accredited investors only and takes advantage of alternative intelligence, deep data science, and institutional-grade research for property acquisition.
Roofstock has a minimum investment of $5,000 and pays out dividends quarterly, which comes from the net rental income collected. You also have the option to reinvest your dividends, and the investing horizon they recommend is at least 5 years, so if you choose this platform, you’re in for the long run.
|Investing Platform||Minimum Investment||Fees (% of assets
Starting with the fees, Fundrise is way ahead of its competitions. Fundrise’s 1% fee is divided into an annual advisory fee of 0.15% and a management fee of 0.85%, and there are no additional or hidden fees – which can’t be said about most of the other platforms.
It’s very common in this industry for platforms to try and tack-on additional fees; for example, DiversyFund charges a Developer Fee - which can be as high as 2% - and is by itself higher than Fundriser’s total fees. REITs can also have very high fees, compared to some of these platforms.
Another factor is the minimum investment. If you’re just getting started in the industry, you probably don’t have thousands of dollars ready to be invested – and even if you did, you probably want to get a feel for the industry first before committing. No matter the reason, a lower minimum investment will always be more flexible and a great way to test out the waters.
Fundrise has an extremely low initial investment of just $10, completely unheard of in this industry. It can get away with offering such low minimums because it works by pooling together funds from thousands of investors across the US. It also benefits from the tradeoff - lower minimums for more reach with investors.
Platforms with higher minimums like Roofstock ($5,000) and CrowdStreet ($25,000) may have fewer overall investors. Still, their focus on accredited investors means each investor contributes a higher amount, and they usually have a higher purchasing power than other platforms.
|Investing Platform||Annualized returns||Accredited Investors only||Assets Under Management|
Again, Fundrise comes slightly ahead of the competition in terms of annual return. It has averaged between 8-16% annual returns since 2017 and has amassed over $1 billion in Assets Under Management (AUM). Fundrise is one of the few platforms in league with the likes
of Crowdstreet ($2 billion AUM) and Roofstock ($1.2 billion AUM), two very established investing platforms for accredited investors.
DiversyFund, like Fundrise, relies on a crowdfunded approach to stay competitive with the biggest and comes second in terms of returns (11%-15%) in the non-accredited category. It also has substantially fewer assets under management ($175 million) than Fundrise.
|Investing Platform||Welcome bonus||Sector focus|
commercial, office, and retail properties
rental, and industrial properties
The last aspect we considered when comparing these services is the property focus. Some factors that may increase the value of certain properties are mortgage rates, average income, and the cost of living in the area. Keep in mind that, depending on the US state, the cost of living and income will play a bigger role in determining the demand.
A type of properties that have benefited in the last year is office and commercial properties, largely due to lifting restrictions on travel and gatherings. If the trend continues, platforms with a strong focus on these sectors like Fundrise, RealyMogul, and Crowdstreet are likely to make a huge profit.
At the end of 2021, real estate reached the highest point in 5 years and marked the highest number of residential units sold in the past 15 years; a whopping 6.9 million properties changed hands. Platforms like DiversyFund and Roofstock recorded record-breaking profits and will continue to benefit from this trend as well.
Signing up with Fundrise is very easy, and the only requirement is that you are a citizen of the US. The process takes less than five minutes, and here are the steps:
If you sign up using this link you will get $10 worth of Fundrise’s Real Estate Interval Fund shares, completely for free.
Fundrise is one of the best real estate investing platforms out there, even for accredited investors. It has very high returns and a very consistent track record of growth. The only downside is that it may be less liquid than publicly-traded REITs, but it’s a tradeoff: if you’re not willing to pay the huge fees - which can easily reach double digits - associated with REITs, you should definitely stick with Fundrise’s industry-low 1% fee and small minimum investments.