Crowdstreet vs Fundrise: Which one should you pick?

Posted on

We have reached a point in humanity where you can almost do anything to make money. Investment options are more than ever. Real estate, however, is one investment option that has remained evergreen. Today, there are many apps that help you invest in real estate. Among the popular ones are Crowdstreet and Fundrise. In this article, we will do a comparison of Crowdstreet vs Fundrise. We will also go over some Crowdstreet reviews and compare Fundrise review with them.

Crowdstreet vs Fundrise: Which one should you pick?

Apps have made everything easier including investment. There are many investments app and some are for a specific type of investment like real estate. Before we start analyzing Crowdstreet reviews and Fundrise review let us learn about both these apps.

What is Crowdstreet?

Crowdstreet website
Image by crowdstreet.com

Crowdstreet is a real estate investment platform. The platform was founded by Tore Steen and Darren Powderly after having seen the condition of people during the great depression and how they over-relied on equities to solve their money problems.

Crowdstreet is a crowdfunding platform where you don’t have to pay the whole sum to be the owner of a building or property but rather like mutual funds your money is pooled along with that of others and thereby reducing the burden on solo investors. So far the platform claims to have seen people invest in as many as 709 projects which have seen them invest an amount equal to or more than 3.8 billion dollars.

The company boasts more than 120 years of combined experience in various fields and its mission is to offer its users the best real estate investing experience while making it easy to help their users diversify their portfolios. Now that we know about Crowdstreet we need to look at Fundrise before we can head to Crowdstreet vs Fundrise comparison. Later on, we will also look at Crowdstreet reviews.

What is Fundrise?

Fundrise website | Crowdstreet vs Fundrise
Image by fundrise.com

Headquartered in Washington, DC, Fundrise is another real estate investment platform, and not just that it is one of the leading such companies. The company was founded in 2012 with aim of helping to empower people by building a better financial system.

The company believes that real estate has been an important and the best part of any portfolio, especially for those that have made good money. However, since traditional ways of investing in real estate were not very inclusive and for everyone and that is where the company entered the picture and changed the scenario.

Ben Miller is the co-founder and CEO of the company that came up with its first offering in 2012. From then to now the company has invested in real estate worth more than 4 billion dollars and they handle more than 3,70,000 active investors.

So far the company has given away more than 226 million dollars in dividends and they say that they are just getting started as there’s more to come in the future. So with introductions out of the way, it’s time to head to the promised Crowdstreet vs Fundrise comparison. Later on, we will check out Fundrise review in detail.

Crowdstreet vs Fundrise

The reason to compare any two things is that they belong to the same field and yet are different. It could be two movies from different genres or two sports which are very different from each other and there still would be a case made for either being better than the other which is why we also have this comparison lined up so that we can find the better real estate investment platform among the two.

Investment

Community section
Image by crowdstreet.com

Now that there is no doubt about both these companies being real estate investment platforms it is worth asking how much amount is required to get you started on either of these platforms. Not all of us can fork out big bucks right from day one and it is to help people like us that these companies came ahead and so you would expect them to allow you to invest a very small sum in the beginning.

Well if we talk about Fundrise then you don’t need more than 10 dollars to start investing using their platform whereas, on the other hand, Crowdstreet would require you to invest at least 25,000 dollars as your starting amount. So there is no doubt as to which app is more inclusive and open to a wider audience.

Fees

Most of the time it is the cost of stuff that stops us from going ahead and getting them as pricing plays an important part. So before you start making money from investments you might be faced with paying fees to be able to use these platforms and that might play a big part in your decision to opt for a certain platform over the other.

Fundrise commands a 0.15% annual advisory fee and a 0.85% annual management fee while Crowdstreet asks for no such fee. Now although the difference isn’t much the physiological factor surely comes into play and which is what brings the Crowdstreet vs Fundrise comparison to a draw again as the former performs better here.

Options of Investment

Invest without compromise section | Crowdstreet vs Fundrise
Image by fundrise.com

We mentioned these two being dedicated real estate investment platforms but that does not mean they don’t need to support extra options. It is always the more the better and so if you sign up for the company hoping to avail of a benefit and are offered something extra for free you wouldn’t mind it.

That is the case with both these companies, they both have more than one investment option available for you. With Fundrise you can invest in REITs and eFunds while Crowdstreet allows you to invest in REITs, individual properties, and custom portfolios.

Now though they have one option in common the number of secondary options offered by Crowdstreet is more and thus we would have to tout it as the better platform here.

Account Options

Just like the number of investment options matters, so do account options. The bank offers you types of accounts like savings, current, and more, similarly, with these companies, you have account types that dictate the type of investments you can make.

Both these companies offer the same types of account options, that is, individual accounts, joint accounts, entity accounts, and trust accounts. However, the one point of difference is that Fundrise offers an IRA account while Crowdstreet offers a self-directed IRA account option. Now, this might be down to a personal choice of the user but again Crowdstreet marginally outperforms Fundrise.

Merely going by the comparison of Crowdstreet and Fundrise we see that the former comes out as the obvious winner. However, it is not that simple of a classification. Fundrise is a platform where a non-accredited investor or any tom, dick, and harry with no real estate market experience can come and invest while Crowdstreet is a platform only for accredited investors which limits its target audience and users. And so it all comes down to the personal choice and qualification of the user. Let us now take a look at some Crowdstreet reviews

Also Read: Fundrise vs Diversyfund: Which is better for Investing?

Crowdstreet Reviews

If you head to Google and check for the company ratings then you have got 16 reviews that have helped the company earn a 3.9-star rating. However, if we switch to Trustpilot then the number of Crowdstreet reviews jumps up to 99 but the rating drops to 3.7 stars. While the company manages to get a five-star rating from 43% of its users it has no shortage of 4 stars, three stars, two stars, and one-star ratings all of which are in double digits as well.

One of the five-star reviews on Trustpilot about Crowdstreet said it to be a good place to diversify the portfolio while also being able to realize the benefits of owning real estate. A user who gave Crowdstreet three stars said that the platform was good but it could improve especially in post-close deal monitoring and communication with sponsors and investors.

While a user who gave the platform a one-star rating had issues with the transparency of the company, saw the sponsor being questionable, had an issue with no support being provided after a deal was closed as well as with the company’s support team as they didn’t make an effort to help. These were some Crowdstreet reviews.

Crowdstreet Returns

Deals funded section
Image by crowdstreet.com

If you were to head to the Crowdstreet website and check for their success ratio or the Crowdstreet returns then you would come across figures like 709 deals funded while 3.8 billion dollars invested. However, of these 709 deals, only 153 have been realized or rather sold while other properties await the end of their holding period. In terms of returns, the company’s internal return rate stands at a decent 18.8% which is okayish, to say the least.

The equity multiple rates of the company stand at 1.55× and the holding period is three years. The numbers mentioned above are averages so make of these numbers what you will but it ultimately comes down to you.

The kind of property you invest in dictates the numbers you stand to make. If you invest in opportunistic deals then you may not earn much stable cash flow but can expect one big payday at the time of sale. Of 200 such deals, 28 have been realized.

Value-added and Other Deals

Value-added deals bring you good cash flow over time and also accumulate good value over time by making dramatic improvements which possibly makes them the best investment option as 66 deals have been realized of such properties of the 283 that were available.

You also have core plus deals that offer less stable cash and eat up more money for future maintenance and upgrades and so only 11 of the 102 available deals have been realized. And lastly, you have core deals that have stable and predicted cash flow which is why they are the least risky to invest in. However, out of 11 such available deals, 0 have been realized.

Now we move on from numbers to reviews again as we now look at Fundrise review to keep up with the Crowdstreet vs Fundrise comparison.

Fundrise Reviews

Built to help investors section | Crowdstreet vs Fundrise
Image by fundrise.com

If you head to the Fundrise website then you will see that they boast of receiving 4.9 stars on App Store via more than 11k reviews, 5 stars on Google Play via more than 1.3k reviews, and as well as a 5-star rating on NerdWallet while also being the highest rated real estate platform on their page. But in contrast to these good ratings and reviews on Trustpilot, they only have received 326 reviews and a poor rating of 2.8 stars even though 83% of the reviewers have given the platform a 5-star rating.

One of the users who gave a five-star Fundrise review saw his investments grow significantly and for that reason had good things to say about the platform.

On the other hand, a user dishing out a 3-star rating in their Fundrise review found the platform’s return rate to be low even if it made it easier for them to invest. While a user who gave the platform a one-star rating said in their review that suddenly their account balance had gone zero altogether which is why they cautioned other investors not to use this platform.

We now have a third competitor looking to enter the Crowdstreet vs Fundrise comparison. It is named Yieldstreet and we will see if it can compete with the two for being the best real estate investment platform after we are done with its introduction.

What is Yieldstreet?

Yieldstreet website
Image by yieldstreet.com

Yieldstreet is not a properly dedicated real estate investment platform but rather a private market investing tool. So far they have had more than 4,00,000 people use their platform who managed to invest a combined figure of more than 3 billion dollars on their platform and have made around 9.8% realized net returns annually.

Using this platform you can invest in private markets which include asset classes like venture capital, art, transportation, crypto, short-term notes, real estate, private equity, private credit, structured notes, and diversified funds.

The company was founded in 2015 in New York City. The people behind the company believe that private market investments are supposed to be a fundamental part of your investment portfolio.

The platform has partnered with people who have more than 500 billion dollars collectively and their team barely accepts offers of 10% of the deals that people offer them after carefully curating them.

You need to stay invested anywhere between 3 months and 5 years and can see your investment grow significantly. The intro is done and now we move on to Crowdstreet vs Fundrise vs the recently introduced Yieldstreet comparison.

Also Read: Is Real Estate Investment Trusts a Good Career Path?

Fundrise vs Crowdstreet vs Yieldstreet

So we already saw the comparison between Fundrise and Crowdstreet where the latter emerged as a marginally better platform albeit being exclusive. However, with a third platform in the mix now let’s see how they fare against each other.

Fee

Diversify beyond stocks and bonds section | Crowdstreet vs Fundrise
Image by yieldstreet.com

We saw above how the fee was an important distinction parameter and so we use it again to compare Fundrise vs Crowdstreet vs Yieldstreet. The former has a 1% fee divided into two parts, the latter has no management fee but the sponsor fee exists which may vary from deal to deal while the new entrant carries a 1.5% management fee for prism fund.

They also ask for a 1 or 2% charge on individual investment offerings. So now doubts here with Crowdstreet again coming up trumps in this area.

Eligibility

To invest via Fundrise you need not be an accredited or experienced investor. Crowdstreet needs you to be an accredited investor while also meeting their other specified requirements. With Yieldstreet you can belong to either segment.

You can invest in the prism fund while being non-accredited but need to be accredited to invest in individual investment offerings. It’s hard to judge this parameter but no requirements to be met means Fundrise is the best bet in this segment.

Starting Investment

Fundrise allows you to start investing from a sum of 10 dollars. Crowd Street needs you to have 25,000 dollars as starting capital while Yieldstreet asks you to have 2,500 dollars minimum to invest in a prism fund while the limit increases to 10,000 dollars for individual investment offerings. So Fundrise fares the best in this parameter yet again.

Maturity period

What sets Yieldstreet apart section
Image by yieldstreet.com

We didn’t cover this in the Crowdstreet vs Fundrise comparison but we can now. Fundrise takes 5-plus years to see your investment get mature. Crowd Street takes anywhere between 3 and 10 years to see your investment mature while Yieldstreet needs 5 years to mature, however, you are offered liquidation opportunities quarterly.

For individual offerings, the period may vary. While we can’t pick a clear winner between the two streets, personally it feels Yieldstreet provides the better option here.

Investment Options

With Fundrise your investment options are limited to commercial, single-family, or industrial properties. Crowdstreet allows you to invest in commercial, multifamily, industrial, and land real estate.

Yield Street allows you to invest in litigation financing, marine vessels, and deconstruction, supply chain financing, art financing, sports car leasing, and residential and commercial real estate.

Dividends

With Fundrise you can earn dividends quarterly or let them be re-invested. Crowdstreet properties may pay you dividends on a monthly or quarterly basis. Investing in Yieldstreet’s prism funds gets you dividends quarterly which you can opt to take or put up for auto re-investment. It’s more or less similar for all these platforms in this parameter and thus it feels like it ends with a tie.

We hope you enjoyed this comparison. We also looked at Crowdstreet reviews and Fundrise review, so you can get a better idea of how these apps are received. In the end, it all depends on your investment type and priorities which will help you decide which app is the best.

The post Crowdstreet vs Fundrise: Which one should you pick? appeared first on Moneymint.

Source Reference : https://moneymint.com/crowdstreet-vs-fundrise/