If you are dabbling in real estate crowdfunding, then you might be invested with Fundrise.
The company has quickly become one of the top places for investors to get exposure to real estate properties, without actually managing or having a large upfront downpayment.
While it is a great platform to get more diversity in real estate, you might be looking for alternatives or additional platforms to invest with.
Like diversifying your investments, it’s also sometimes a good idea to diversify the platforms you choose to invest with as well. Many offer different variations, fee structures, and options for your money.
So what Fundrise alternatives are out there? Below, I’ll share some of the other real estate investment options you have.
Is Fundrise A Good Investment?
Fundrise offers one of the easiest ways to diversify your investments and get exposure to actual real estate deals. The low investment of $500 helps more investors gain access to real estate that they otherwise could not afford. While this is a long-term investment, it’s a great way to access real estate.
So yes, Fundrise can be a good investment option for you.
Remember, “how” and “what” you invest with and the types of assets are based on your personal interest, goals, and risk tolerance.
Personally, I’ll be getting started with Fundrise soon. I have a few friends who have been invested with them since the early days and have seen consistent returns and have zero complaints.
Fundrise Alternatives for Real Estate Investing
For the last few years, Fundrise has proven to be a top choice for those looking to get exposure in real estate, without the hassle of buying and managing properties.
Yet, you may be looking at Fundrise alternatives as well.
Maybe you want to diversify into more real estate offerings or maybe you aren’t a fan of the platform or fees, so you are looking for something different.
While you can get started with Fundrise for as low as $500 or upgraded to three other portfolio options starting at $1,000 — that can still be quite a bit of money for you.
Generally, most investment companies in the real estate space will have a minimum just like Fundrise.
Investing only $10 here and there is not going to make you wealthy by any means. But, it does get you diversified and learning about investing in real estate.
Groundfloor is currently the only investment platform that offers high-yield, short-term real estate investments to the general public.
GroundFloor vs. Fundrise
Groundfloor is not focusing on huge commercial real estate properties.
Instead, when you have an account, you’ll get a list of potential investments you can choose, with returns from 6-14% and a different grade for each investment.
The majority of the current real estate investments are single-family homes, duplexes, and occasionally you might see apartments or condos. You can read the full review and overview of Groundfloor here.
While DiversyFund is one of the newer kids on the block, the alternative crowdfunding platform is quickly becoming a popular choice to Fundrise.
Yet, even though they are newer to the scene they are delivering commercial real estate at an affordable price.
Like Fundrise, their fund starts with a minimum investment of just $500.
That will get you in their Growth REIT. This fund is a SEC-regulated Real Estate Investment Trust (REIT) that builds wealth by investing in cash-flowing apartment buildings.
DiversyFund vs. Fundrise
But, there are some solid differences that make DiversyFund standout from the crowd on this list.
First, the company actually own the properties they are investing in. Many of the platforms like Fundrise actually use third-parties to handle deals.
Why is it better that DiversyFund owns the properties? For one, it eliminates any fees for your investment as there is no other party the company has to pay for your investment. And two, this means higher returns for you.
Instead, DiversyFund makes a percent of the profits after their investors are paid from any of their holdings. You can learn more about DiversyFund in our product review.
Streitwise is an online real estate investing company that combines their innovative technology and federal regulations to make commercial real estate investing accessible to everyone.
For as little as $1,000 you can invest in a professionally managed portfolio of private real estate assets.
Streitwise aims to acquire and manage a diversified portfolio of value oriented investments home to creditworthy tenants that provide a source of steady and growing dividends.
How Streitwise works:
The company focuses on fairly priced markets that generate higher dividends for investors.
Essential, they invest in properties in emerging markets but that are easily filled with tenants who have great credit, higher net worths, and the properties are located near established employers and amenities to have stronger property value.
What’s great about Streitwise is it’s accessible by both accredited and unaccredited investors. So now any has a chance at a diversified portfolio of quality commercial properties.
With Streitwise there is an upfront 3% fee and an ongoing 2% management fee, all taken out before your dividend distribution.
Remember that most other REITs charge up to 15% in the form of upfront fees, asset management fees, acquisition fees, disposition fees, financing fees, performance fees and other expenses. You can read my Streitwise review here.
While the previous Fundrise alternatives focused more on individual loans or REITs, Roofstock is doing things a bit differently. The platform allows you to buy and invest in single family homes directly, without having to manage the property directly.
Instead, Roofstock has their own preferred property manager available to handle operational responsibilities, like tenant relations, supervising upgrades and day-to-day management.
Here’s how Roofstock works:
How it works is you search for properties based on location, list price, the returns you might be looking for, etc. Then you can analyze the property through all their tools, pictures, and research data about the location and property.
From there, you can make a free offer.
If your offer is accepted, Roofstock charges a marketplace fee equal to 0.5% of the contract price or $500, whichever is higher. Then the offer can be negotiated by the seller or if they accept, then you can into the closing phase.
After that, you can start earning rental income and the property manager assigned from Roofstock handles any day to day operations needed. And eventually, you can sell that property on Roofstock too if you’d like.
The downsides with Roofstock is it’s only single family homes in half of the United States currently and is for accredited investors only.
But if you fit the requirements and are looking to buy legit rental properties, Roofstock might be the way to go.
Another real estate crowdfunding option is PeerStreet, which has been around for a few years and was founded not long after Fundrise.
PeerStreet is a bit different from REIT as it is an online marketplace where investors can choose high-quality private real estate loans.
With the investment company, investors have access to real estate loans that are generally not easily accessed by those who aren’t traditional real estate investors.
Here’s how PeerStreet works:
The loans are generally secured by first liens on real estate. Then PeerStreet partners with top-tier originators in the U.S. and carefully vets their loans before making them available to investors.
Most of the loans on PeerStreet are short in duration (6-24 months) and their range of investments provides investors the opportunity to build a diverse portfolio of loans across property type, geography, maturity, etc.
Even though the minimum investment is only $1,000 at PeerStreet, their marketplace is only for accredited investors currently.
The fees range of 0.25%-1.00% which is generally quite fair. The fee is a “spread” between the interest rate payable on a loan and the interest rate you receive as an investor.
6. Origin Investments
Another popular Fundrise alternative is a platform called Origin Investments. This real estate company primarily focuses on multifamily residential real estate and development projects as well.
The main difference here is that you need to be an accredited investor and the minimum investments are much higher: $50,000 and $100,000!
Additionally, their fee structure is a bit higher than others, with 1.25%. However, they have boasted 30% average gross IRR since 2014.
They are also quite transparent in their projects, where you can see each property in their funds and get the essential details.
But if you have a high net worth and are looking to invest big, Origin Investments is one of the top trusted platforms.
You can invest in two of their funds currently:
- The IncomePlus Fund is designed to deliver passive income and appreciation. It owns and operates multifamily properties and is supplemented with additional debt investments.
- The QOZ Fund which focuses on development projects that provide significant tax advantages to investors who invest with capital gains.
7. Vanguard REIT
The other options above have typically been real estate crowdfunding sites or private REITs that do not follow the stock market.
However, you may not want to deal with multiple platforms and maybe rather invest in something you can sell quickly.
That’s where a REIT on the stock exchanges can be a good option for you. Personally, I recommend Vanguard Index Funds or ETFs, so it’s why I include their real estate fund on here.
The fund is called the Vanguard Real Estate Index Fund Admiral Shares (VGSLX). This fund includes companies that purchase commercial properties like office buildings, hotels, etc.
While it doesn’t exactly follow the movements of stocks and bonds, it’s still tracking against the stock market. Plus, it’s great for paying quarterly dividends.
But remember, you aren’t actually invested in real estate properties, so your exposure to real estate is limited.
However, it can still help you diversify your investment portfolio a bit. I have under 10% in my Roth IRA in this fund just for some exposure, but it can be volatile. So ensure you do your research before investing a ton of money.
There you have some of the best Fundrise Alternatives to consider.
There are a few other real estate investing platforms out there and more are popping up. But these are some of the best alternatives to Fundrise that you might want to consider.So, are you investing in any of these above? What has your experience been with Fundrise or any of the other options? Let me know in the comments below!