3 Best Fundrise Alternatives

Real Estate Offering Update: CityVest Has Launched Catalyst Access Fund With 20%-25% Target Annual Returns (Accredited Investors Only).

Looking for an alternative to Fundrise for real estate investment? We’ve narrowed down the best three options for you to consider.

For several years crowdfunding has provided entrepreneurs an easier way to obtain money without soliciting venture capital. This movement — many small contributors partnering together for a purposeful investment — has since stretched to the real estate market, where investors pool funds for real estate investments

The raised capital can be used to purchase, develop or renovate a real estate holding with the aim for future transactions or use. And, thanks to the nature of crowdfunding, you can diversify your portfolio by investing in various properties through the low minimum investment requirements.

Best Fundrise Alternatives

If you’re already dabbing in real estate crowdfunding, then you might be invested with Fundrise, which has proven to be a great choice to get real estate investing exposure. What if you want more offerings, a different platform, better fees or simply want to learn how to invest in REITs? Here are some Fundrise alternatives you should consider.

1. Arrived Homes

Get Started securely through Arrived Homes’s website
Fees
1% asset management fee
Minimum Investment
$100
1 Minute Review

Arrived Homes is a real estate investment platform that focuses on building wealth through investing in rental properties. While most real estate platforms and REITs focus on commercial properties, Arrived Homes focuses on single-family homes as its source of rental income.

This focus on smaller properties allows Arrived Homes to sell ownership shares on individual properties to non-accredited investors with buy-ins as low as $100. Learn more about Arrived Homes with Benzinga’s review.

Best For
  • Small- to medium-sized investors
  • Investors interested in rental income
  • Investors looking to diversify
Pros
  • Buy-ins as low as $100
  • Open to non-accredited investors
  • Offers ownership shares in real property (and all the tax benefits)
  • Multiple ways to earn dividends (rental income and property appreciation)
  • Great way to diversify portfolio
  • Open to self-directed individual retirement accounts (IRAs)
Cons
  • Long hold periods
  • No secondary market to liquidate shares

Arrived Homes allows both accredited and non-accredited investors to buy shares of cash-flowing rental properties in some of the top rental markets throughout the United States. With a minimum investment of just $100, investors can easily diversify their portfolios across multiple rental homes and receive dividends each quarter based on the rental income generated by each property.

The company handles all of the management headaches that go along with owning rental properties so investors can simply enjoy the best part; collecting passive income.

After a target hold period of 5-7 years, Arrived Homes will choose the best time to sell the property to realize the highest gains. Each investor will then receive their pro-rata share of the proceeds from the sale and their investment will be fully realized.

You can also read our full Arrived Homes Review.  

2. CrowdStreet

Get started securely through CrowdStreet’s website
Fees
1% – 1.75%
Minimum Investment
$25,000
1 Minute Review

Crowdstreet is an online real estate investment platform that lets investors choose from a wide range of real estate investment offerings to crowdfund. Crowdstreet investors are free to buy into managed funds, individual buildings or even build a bespoke investment portfolio that includes both kinds of deals.

CrowdStreet’s platform has a diverse range of property types, ranging from multifamily to office, industrial, self-storage and others.

 

Best For
  • Accredited investors
  • Long-term investors
  • Investors looking to diversify from stocks
Pros
  • User-friendly interface
  • Diverse investment offerings
  • Great investor resources
  • Proven performance history
  • Many offerings eligible for inclusion in self-directed IRA
Cons
  • Accredited investors only
  • Most offerings require a $25,000 minimum investment

CrowdStreet offers you direct access to individual commercial real estate investment opportunities. Since its launch in 2014, the company has published over 521 offerings, 54 of which have now been fully realized. Better yet, $2.1 billion has been invested through the marketplace, with $240.4 million returned to the investors. 

The CrowdStreet Marketplace offers 3 investment options: individual deals, diversified funds and vehicles and advisory services. All deals are reviewed by a team with over 60 years combined private-equity real estate experience. Its Investor Relations team is readily available to handle your questions and guide you through the investment process. The investment minimum for most of its offerings is $25,000 though some may be higher. The account creation process is easy, with the option to sign up with LinkedIn or Google.

3. Groundfloor

get started securely through Groundfloor’s website
Fees
No investor fees
Minimum Investment
$10
1 Minute Review

Groundfloor is open to non-accredited investors and private individuals looking for active real estate alternative investment. Groundfloor has great volume with more than 10 investments. 

Individuals with small portfolios will also like the low $10 minimum and 0 investor fees. However, most of the loans are given to house flippers, and there is a risk of borrowers defaulting on their loans. 

Best For
  • Non-accredited investors: It is a good option for non-accredited investors who want to invest in an individual capacity.
  • Private investors with small portfolios: Groundfloor charges a relatively small premium of $10, which private investors with small portfolios find attractive.
  • Active-investors: Groundfloor is also ideal for investors who want to actively maintain and control their real estate portfolio.
Pros
  • Charges the lowest minimums in the industry
  • 0 investor fees
  • Open to non-accredited investors
Cons
  • Offers no bankruptcy protection
  • High rate of an uncured default
  • Many loans are for judicial-only states

Groundfloor is an alternative investment platform that has created a new way for retail investors to gain access to the real estate market; through loans secured by residential properties.

Groundfloor makes short-term high-yielding loans to real estate investors and home builders for the construction and renovation of residential properties throughout the United States. The company then securitizes and sells shares of the loans to individual investors with a minimum investment of only $10.

Investors on the Groundfloor platform receive the interest paid on the loan plus their principal when the loan is paid in full, typically within 6-12 months.

More on Real Estate Investing

Having real estate in your portfolio adds diversity to minimize your investment risk. There are numerous strategies to achieve this, including REITs — they are as passive as holding dividend paying real estate stocks. Others like purchasing and holding rental property for capital appreciation or cash flow need active involvement. But is real estate investing for you? Understanding the pros and cons will help you choose where to put your money.

Pros of Real Estate Investing

Portfolio diversification and cash flow are probably the best parts about real estate investing. Here are other reasons to venture into real estate investing:

  • Reduced volatility: The real estate market doesn’t suffer the level of price fluctuations experienced by investment vehicles like stocks, which is often based on several operational and market adjustments. Real estate investing offers a more consistent return on investment (ROI). 
  • Ability to invest with other people’s money: Contrary to the purchase of bonds and stocks, a real estate investment can be financed with long-term, fixed-rate mortgages. The possibility of financing multiple properties with minimal cash outlay — and to get them generating income immediately — means that reliable ROI can be achieved quickly and consistently. For instance, you can purchase a $100,000 single-family rental and pay only 20% down plus closing costs. You’re simply leveraging other people’s money to build equity.
  • Tax benefits: Real estate ownership offers you various tax-deductible expenses, including operational expenses, property taxes and mortgage interest. Property improvements, which are related to the investment value of a property, are deductible.

Cons of Real Estate Investing

There are no absolutes with real estate investing. Here are a few reasons why you should exercise caution when contemplating a move into real estate.  

  • Illiquid investing: When you put money into real estate, you’re taking a long-term view. There are only a few levers you can pull to get your money at your discretion.
  • A steep learning curve: Without a background in real estate investing, you’ll need to start by familiarizing yourself with various financial, legal and commercial concepts. Learning is the way to position yourself in the best possible way to reduce risk.
  • Carrying costs: The cost of ownership for property isn’t limited to your monthly mortgage payments. Property taxes, insurance, maintenance and management all add up and cut into your bottom line. Months between tenants results in out-of-pocket expenses for which you may not be prepared.

Get Your Foot on the Property Ladder Today

What if there’s a way to invest in real estate without having to worry about the hassles of property ownership? The stress of tenants can be a nightmare and the return on investment can be negative without the right strategy. Fortunately, real estate crowdfunding can take away these nightmares and open up real estate investing to the average investor. You can now access prevetted real estate investments that were previously unavailable outside of close-knit circles.

Accelerate Your Wealth

Arrived Homes allows retail investors to buy shares of individual rental properties for as little as $100. Arrived Homes acquires properties in some of the fastest-growing rental markets in the country, then sells shares to individual investors who simply collect passive income while waiting for the property to appreciate in value over 5 to 7 years. When the time is right, Arrived Homes sells the property so investors can cash in on the equity they've gained over time. Offerings are available to non-accredited investors. Sign up for an account on Arrived Homes to browse available properties and add real estate to your portfolio today.