CrowdStreet vs. Fundrise: Which Real Estate Platform Is Best For You?

About Fundrise

Fundrise is an online real estate investing platform that’s focused on making real estate investing accessible to a wide range of investors, including those who want to start with as little as $10. They were founded in 2012, with headquarters in Washington, D.C., and they’ve invested over $4 billion in real estate across the country since their launch.

Besides a low minimum investment requirement, Fundrise specializes in eREITs and eFunds. These are proprietary investments that aren’t publicly traded, and eREITs are designed to produce income, while eFunds are designed for growth. Additionally, these funds are both inherently diverse because you’re investing in a collection of real estate investments, not just one real estate project at a time.

Invest in real estate for as little as $10

Fundrise relaunched their Starter Portfolio to make it more accessible than ever.

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Fundrise Pros and Cons

Pros

Low initial investment: A $10 minimum investment breaks down one of the barriers to investing in real estate.
Open to all investors: You don’t need to be accredited to invest in real estate through Fundrise.
Access to a diverse portfolio: Fundrise keeps your goals in mind as they help you pick the right portfolio. You can go for quick gains or bigger, long-term ones.
Passive way to invest in real estate: Real estate investing can take work (think rehabbing houses or managing rentals) but Fundrise is truly passive investing.
Transparent process: Fundrise lets you know exactly what you’re investing in.

Cons

Highly illiquid: You need to be willing to sit on your investments for 5 years to realize any real returns.
Complicated fees: On the surface, Fundrise’s fees are 1% — 0.15% annual advisory fee plus 0.85% annual asset management fees — and those are fairly low. But the reality is that there are more fees that aren’t easy to see.
Fundrise may delay or suspend redemptions: Fundrise had its model tested for the first time in March 2020 as the economy began facing extreme uncertainty. It suspended and delayed redemptions from March until July. But we’re yet to see what would happen if there was a major housing market crash.

Read my full Fundrise review to learn more.

About CrowdStreet

CrowdStreet is a commercial real estate investment platform geared towards accredited investors who can commit a large initial investment. The platform has been around since 2013, and they’ve worked with thousands of investors to invest over $1.90 billion in more than 488 projects.

At any given time you’ll find five to fifteen different commercial projects on the platform, from apartment developments, shopping malls, and amusement parks. CrowdStreet also has non-traded REITs like Fundrise, and individual properties can be common equity, preferred equity, or mezzanine debt.

Are you an accredited investor?

CrowdtSreet is open to accredited investors only, and offers individual projects, funds, and custom portfolios.

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CrowdStreet Pros and Cons

Pros

Vetted projects: CrowdStreet has a vetting process before they accept and introduce any new projects on their site so the majority of the research is done for you.
Access to a wide range of real estate deals: Investors can invest in individual properties, REITs, and tailored portfolios.
No management fees: There aren’t any management fees for CrowdStreet investors.
Site transparency: CrowdStreet clearly explains their process, gives full details of each project, and you can easily find information about the company and board.
Solid investor resources: There are online resources, a new investor orientation, events, and more.

Cons

High minimum investment: The minimum is $25,000 to start investing with Crowdstreet.
Accredited investors only: CrowdStreet is only open to accredited investors, which closes the door to many new investors.
Highly illiquid investments: As with most real estate investing, you must be willing to let your money sit for several years.

Read my full CrowdStreet review to learn more.

Unique CrowdStreet Features

Vetting process

CrowdStreet has a three-step vetting process that each property sponsor must go through before CrowdStreet will list the property on its platform. CrowdStreet digs into the developer’s background and track record. They evaluate each property in a deal-screening process to ensure consistency with the sponsor’s background. Finally, they review the terms of the offer to make sure it meets CrowdStreet criteria.

Individual property investments

The CrowdStreet Marketplace is where investors can browse deals and invest directly in individual projects. You will still have a very passive investing experience because the project is managed by the project’s sponsor. Projects generally have dozens of individual investors.

The kind of individual properties you’ll have access to are retail, office, apartment complex, and more. This allows you to diversify your portfolio, and because they’re across different geographic locations, you’ll have that kind of diversity as well. The Marketplace gives you access to documents on each property that you’ll want to look over before investing.

REITs

REITs are Real Estate Investment Trusts — both CrowdStreet and Fundrise offer them — and they’re a type of fund that invests in a mix of property types. They’re similar to mutual funds and are diverse at their core.

CrowdStreet has two types of these funds:

Single-sponsor funds: These are funds led by individual real estate firms who specialize in a particular region or asset class.
CrowdStreet funds: Funds that are managed by CrowdStreet’s team of real estate professionals, and they adhere to their proprietary process and give you access to deal flow from hundreds of sponsors.

Custom portfolios

CrowdStreet’s Private Managed Account Service tailors a portfolio specifically for your needs. Your portfolio is managed by CrowdStreet Advisors, LLC, which is a subsidiary of Crowdtreet. These rely on proprietary technology to invest in and manage your portfolio, and they come with a custom investing strategy, dedicated support representatives, and online tracking through CrowdStreet’s Portfolio Center.

There’s a $250,000 minimum balance to access a custom portfolio, and the fees depend on the size of your investment.

Want more crowdfunded real estate options? Check out 7 Best Real Estate Crowdfunding Sites & What You Need to Know Before Investing

Unique Fundrise Features

eREITs and eFunds

Fundrise currently has 18 different eREITs and eFunds, and again, these aren’t publicly traded funds. Their offerings are either income, growth, balance, or income and growth focused. Some of these funds have a nationwide geographic focus, but there are also ones that target the East Coast, West Coast, and Heartland.

Fundrise’s eREITs and eFunds fund a number of active projects at any given time, and you have access to the details for each project the funds include, like investment size, projected returns, timeline, and market analysis.

The funds all include details regarding historic performance — NAV, dividends, and appreciation. You can also access the offering circular, annual and semi annual reports for each year, and tax forms. The majority of this information is available on Fundrise’s platform whether you’re an investor or not, which I really like.

Redemptions

Because you can’t sell your shares of the eREITs and eFunds you’re investing in on a public exchange, Fundrise does offer a redemption program if you want to sell your shares back to Fundrise. There are fees — they’re paid into the eREIT or eFund — and they range from 3% to 0% of the share price.

There’s a 90-day introductory period when there’s no redemption fee so investors can sort of test out Fundrise. But Fundrise can (and has) suspend or delay redemptions. They did this during 2020 to keep more cash on hand and protect their investments. The suspension lasted from March 2020 through July 2020.

Multiple portfolio levels

Fundrise has five different account levels with features that unlock as you’re able to grow your investment. They all have the same annual advisory fee of 0.15%, give you access to registered products, and include dividend reinvestment and auto invest.

Here are Fundrise’s portfolio options:

Starter: $10 minimum — Fundrise recently relaunched their Starter Portfolio with this new lower minimum
Basic: $1,000 minimum — You can invest via IRA and access tools that let you manage your investment goals
Core: $5,000 minimum — Additionally access a custom portfolio strategy and directly allocate to funds
Advanced: $10,000 minimum — Comes with plus plans, which offer more complex and strategic investment offerings
Premium: $100,000 minimum — Investors on this level also have priority access to the Fundrise investment team and periodic accredited offerings

CrowdStreet vs. Fundrise: Fees

CrowdStreet

Although CrowdStreet requires a high minimum investment of $25,000, they don’t charge fees to use the platform. There are fees related to individual projects, which vary, but you will be able to see the fees in the project details page on CrowdStreet’s site. You’ll also incur fees if you invest in one of CrowdStreet’s funds, and these range from 0.5% to 2.5% of invested capital.

Fundrise

Fundrise charges a number of fees that can eat into you investment:

Annual advisory fee: 0.15%.
Annual asset management fee: 0.85%.
For IRA investing: Fundrise’s IRA custodian, Millennium Trust Company, charges an annual fee of $125.
Organizational and offering costs: This is the cost of bringing the eREIT or eFund into existence, and Fundrise says these run 0% to 2% of the money raised by investors. These are reimbursed to the manager out of the eREIT or eFund in monthly installments that do not exceed 0.5% of the fund’s total proceeds.
Potential development fees on eFunds: Up to 5% of total development costs, excluding land. There may also be a potential disposition fee when an eFund sells a property, which is 1.5% of the gross proceeds, after repayment of property-level debt.

Crowdstreet vs. Fundrise: Who Are They For?

Fundrise did something different when they lowered their minimum investment to $10 — they opened the doors to those who’ve never before been able to afford to invest in real estate. Which is why Fundrise is best for:

Brand new real estate investors
Investors who want to try out the market
Those who don’t qualify as accredited investors
Investors who want to generate supplemental income through real estate

CrowdStreet is a more traditional option in the sense that they require you to be an accredited investor. This means you’ll need to meet the SEC definition that requires income exceeding $200,000 or over $300,000 if married. You’ll also need to have a net worth, or joint net worth, that exceeds $1 million and does not include your primary residence.

With that being said, CrowdStreet is best for:

Accredited investors
High-net-worth individuals
Investors who want to expand their portfolio and produce income from real estate

Crowdstreet vs. Fundrise: The Final Word

The reality is that these two crowdfunded real estate investment platforms are for two different types of investors. Fundrise is best for new and non-accredited investors, while CrowdStreet is better for accredited investors.

Both of these platforms offer tons of investor resources and are transparent about their process of selecting properties, and that should make you feel comfortable working with either of them.

Disclosure: We earn a commission for this endorsement of Fundrise.