Crowdstreet and Fundrise are two major real estate crowdfunding websites that you can use to invest in real estate online.
While they’re both in the same industry and have some similarities, these two sites also have remarkable differences when it comes to how you use them, who can use them, and more.
I want to get to the bottom of this in this article and go through all the points comparing Crowdstreet and Fundrise.
By the end, you’ll have a good idea of which to use to meet your investing needs.
Also, if you want more content like this, check out my book, Real Estate Crowdfunding Explained. This book is comprehensive and walks you through this whole real estate crowdfunding business.
It’s a must-read if you’re new to online real estate investing and want a jumpstart on the learning process.
1. CrowdStreet
Thus far, people have invested over $400 million on CrowdStreet across more than 250 offerings.
The websites brings together real estate developers and investors to fund institutional-quality deals. You can get started with direct investing or portfolio investing.
With direct investing, you can browse screened and vetted individual deals. You’ll gain direct direct access to institutional-quality commercial real estate offerings across the US.
Along with being able to access these investments, you’ll also get:
- Online investors tools: Shows your various positions and diversification
- Deal comparison capability: All sponsors must display targeted performance
- Dedicated support team: To answer your questions and help you
- Sponsor transparency: You’ll know who the sponsor is, where you are in the offer process, and see performance updates
At the time of writing, more than 250 institutional quality commercial real estate investment offerings have been completed. You can see some of the data on the returns below.
In addition to direct investing, there is also the option of portfolio investing on CrowdStreet. Portfolio investing has higher minimums ($25k), but comes with a ton of diversification.
You can instantly invest in 30 – 50 vetted commercial offerings at once. All you gotta do is click a button and CrowdStreet will do the rest. This is more appealing if you want a “hands off” investment process.
The CrowdStreet Blended Portfolio includes properties across a range of asset types in the United States. The company uses a middle market property strategy to capitalize on inefficiencies.
The CrowdStreet team has more than 120 years of combined experience. They put this to use for you to identify, vet, and include the best possible properties in the CrowdStreet Blended Portfolio.
This means, you’ll get:
- Instant diversification: You’ll spread your investment across a few properties rather than putting it all in one
- Faster streamlined process: You don’t have to worry about spending time analyzing each deal.
- Passive income “hands off” approach: Since you’re investing in a created portfolio, you don’t have to worry about doing the research work.
- Knowledge and expertise: The CrowdStreet team puts their knowledge to use to give you a portfolio, backed by powerful technology analysis and sector-specific insights
CrowdStreet is a great option if you are an accredited investor, want to access quality deals, and you are comfortable with their $10,000 investment minimum.
Because fo their direct investing and portfolio investing choices, you can rest assured that you’ll find an option that meets your appetite for risk, research work, and desired ROI.
Fundrise
Fundrise is an online real estate and crowdfunding website that boasts 500,000 investors that have invested in $1.4 billion worth of real estate.
Unlike CrowdStreet, Fundrise is open to non-accredited investors with a $500 minimum. This makes it easy for beginning real estate investors to use their site.
The way that Fundrise works is that they offer a few different portfolio options that vary depending on your preference for risk, asset classes, and income type.
Basically, if you’re looking to earn supplemental income, then Fundrise will primarily include debt-based real estate assets.
A tiny amount will be allocated to real estate that could appreciate over time.
For the most part, you’ll be receiving income from cash flows and interest payments. You can expect a 8.8% – 10% annual return.
This plan tends to see an average investment of $7,873.75 and most investors are in their 30s and 40s.
The balanced investing plan is great if you want a healthy breakdown between debt and equity real estate assets.
Put simply, Fundrise will be working to get you cash flows and capital appreciation over time.
This type of portfolio would have higher returns, but also more risk. Capital appreciation is never guaranteed.
Finally, you could look into the Long-Term Growth portfolio if you don’t need your money back tomorrow and want to let it grow over time.
The Long-Term Growth portfolio is going to invest more heavily in real estate that can appreciate in value over time. You’ll get fewer dividends, but the value of the assets you own will increase.
Basically, you’ll be buying into properties in the hopes of taking advantage of major demographic or cultural shifts. Through real estate development and improvement, you can build value for an eventual sale.
Rather than counting on dividends, you’ll receive most of your return when the properties are sold and you get a fat check. Returns can vary from 9.2$ – 10.5%
Which Website is Best For You?
The first question to ask yourself is whether you’re an accredited or un-accredited investor. If you’re un-accredited, you’ll only be able to invest in Fundrise.
However, if you are an accredited investor, then I would consider spending some time looking through the CrowdStreet marketplace. You’re gonna see a lot of high-profile deals that can give you killer returns.
Ultimately, you can participate on both websites. I think that with the higher minimums, CrowdStreet is going to be a better fit for wealthier investors. With only a $500 minimum, Fundrise is a better fit for the mainstream investor.
You can learn more about online real estate investing in my book, Real Estate Crowdfunding Explained. I go through many of the websites out there, how you can use them, and advice that I have for getting started.
