Fundrise is my favorite private real estate platform. It was started in 2012 and manages over $3.3 billion for over 400,000 investors. This article will look at the main Fundrise alternatives in the real estate crowdfunding space.
I've personally invested $954,000 in private real estate funds and individual deals since 2016. 2016 is when I came up with the now widely-adopted thesis of investing in heartland real estate due to positive demographic trends.
I hypothesized that more people would relocate to lower cost areas of the country due to telecommuting. Once the pandemic hit in 2020, there was a massive acceleration in work-from-home and work-from-anywhere.
Information About Fundrise
Fundrise is was co-founded by brothers Dan and Ben Miller and is headquartered in Washington, DC. The vertically-integrated real estate platform has more than 1.9 million active investors, Fundrise is one of the largest online real estate crowdfunding platforms in the US.
Fundrise is open to all investor and has an investment minimum of just $10. The $10 makes investing in private real estate investing and venture vesting accessible to all Americans. In the past, only accredited investors with net worths of over $1 million or income of over $250,000 could invest in private real estate.
Fundrise has a total portfolio value in excess of $7 billion across 292 active and 145 completed projects. It owns over $3.3 billion in equity. Here is my Fundrise review for more detailed information.
Fundrise is a great way to generate more passive income compared to owning physical rental properties. By investing in a Fundrise fund, there is no dealing with tenants, remodeling, or maintenance issues. As you get older and wealthier, investing in private real estate becomes attractive.
As you build your invest portfolio and gain more experience, you can sign up to be a Fundrise Pro member, which offers more investment flexibility and curated news and information.
A Conversation With Ben Miller, CEO Of Fundrise
For more information on Fundrise, listen to an hour-long talk I had with Ben Miller, the CEO about his outlook on real estate as well as the risks and rewards. I've known Ben since 2016 and have been impressed with how he's focused on risk-adjusted returns for his investors.
Investing in private real estate funds is also a good way to dampen volatility and diversify your investments. Real estate generates income and is a tangible asset that holds its value better than stocks.
Although I think Fundrise is the best private real estate investment platform, here are some Fundrise alternatives to consider as well.
1) Fundrise Alternative #1: CrowdStreet
If you are an accredited investor, CrowdStreet is the main Fundrise alternative. Founded in 2012 by Tore Steen and Darren Powderly, CrowdStreet is an accredited investor-only crowdfunded real estate investing platform. Now headquartered in Austin, Texas, CrowdStreet is a private real estate deal marketplace that brings sponsors with investors.
Unlike Fundrise, CrowdStreet does not manage or source the deals. Instead, CrowdStreet identifies the the top sponsors with the best track records and introduces their deals on the platform. In turn, CrowdStreet earns a referral fee.
CrowdStreet has 776+ funded deals, 344+ project sponsors, and more than $4.16 billion invested in real estate projects across the US. CrowdStreet also has speciality funds on occasion, including its C-REIT and industrial fund.
Because CrowdStreet is for accredited investors only, the minimum investment amount for deals on its platform averages $25,000. $25,000 is obviously much higher than the $10 minimum at Fundrise. As a result, you likely have to invest at least $75,000 to invest in three deals in order to diversify.
CrowdStreet charges a sponsor fee ranging from 1% to 3% of the investment. You can browse the full list of projects, filter, compare fees, and more, from the CrowdStreet dashboard.
If you are to invest in CrowdStreet, you must thoroughly screen each sponsor. Unlike Fundrise, which is the only sponsor, CrowdStreet highlights a variety of sponsors and their deals to choose from. Although the sponsors CrowdStreet chooses have strong track records, things can sometimes go wrong as with the Nightingale sponsor.
Here is my CrowdStreet review for more details.
2) Second Fundrise Alternative: RealtyMogul
If you are not an accredited investor, RealtyMogul is the main Fundrise alternative. RealtyMogul also began in 2012 and is one of the oldest private real estate investing platforms today. RealtyMogul offers eREIT funds and individual investments.
I personally had lunch with Jilliene, the CEO and Founder of RealtyMogul when she visited San Francisco. I was impressed with her long-term vision and focus on investing in profitable deals as opposed to some platforms that sacrificed quality for growth.
RealtyMogul is open to accredited and non-accredited investors. The average minimum to invest is $5,000, much lower than CrowdStreet's $25,000 minimum, but much higher than Fundrise's $10 minimum.
Here is my detailed RealtyMogul review for more details.
3) Third Fundrise Alternative: EquityMultiple
EquityMultiple is another solid Fundrise alternative, based in New York. EquityMultiple has a total project value of over $4.4 billion as of 4Q 2023. Here is my EquityMultiple review for more details.
EquityMultiple offers two ways to invest in real estate: EquityMultiple Earn and EquityMultiple Grow. With EquityMultiple Earn, you can access high-yielding real estate investments, and the minimum investment is $5,000.
If you’re looking for growth over short-term yield, EquityMultiple Grow is the more appropriate investment. With EquityMultiple Grow, you can invest in a portfolio of value-add and opportunistic real estate projects. Target return average is above 15%.The minimum investment for these is $10,000.
EquityMultiple has excellent reviews on Trustpilot, and they’ve paid out almost $300 million in dividends to investors.
4) Fourth Fundrise Alternative: DiversyFund
Finally, you might want to check out DiversyFund as another Fundrise alternative. DiversyFund was founded in 2014 by Craig Cecilio and Alan Lewis and is based in San Diego, California.
DiversyFund is also open to accredited and non-accredited investors, with a community of more than 300,000 active investors. The investment minimum is just $500, so the second lowest after Fundrise.
Investors can focus on growth, dividend, or retirement – or Premier Offerings if you’re an accredited investor. Most projects listed on DiversyFund have an investing horizon ranging from 5- to 7-years, hence, invest accordingly. Fundrise, on the other hand, provides quarterly liquidity for those who need it.
Here is my DiversfyFund review for more details.
Stick With The Top Private Real Estate Platforms
Fundrise and the Fundrise alternatives should continue to gain the most amount of investors as the space grows. They have a first-mover advantage and now have the longest track records.
In general, I think most investors should invest in private real estate funds rather than individual real estate deals. If you do invest in individual deals, then you should probably build a portfolio of 4-6 deals, which could range between $20,000 – $150,000, depending on the platform and the investment minimums.
I prefer Fundrise the most because it has the most robust funds. Fundrise is a long-term investor that focuses on residential and industrial properties in the Sunbelt region, where valuations are lower and yields are higher. Instead of buying to flip, Fundrise develops property mainly for rental income.
Click here to start investing in Fundrise with just $10.
About the author: Sam Dogen is the founder of Financial Samurai, one of the largest and most trusted personal finance websites today with over 1 million monthly readers. Financial Samurai was founded in 2009 during the height of the global financial crisis. Sam worked at Goldman Sachs and Credit Suisse for 13 years and has his MBA from Berkeley. Sam is a 21-year real estate investing veteran. Sign up for his free newsletter.