Unraveling the Tale of Two Titans: A Relatable Guide to Picking Between Fundrise and CrowdStreet in the Realm of Real Estate Investing

Thinking about investing in real estate? It can be a bit of a challenge, I know – especially if you’re not in a position to buy and manage rental or commercial properties. However, some platforms bring investing in real estate within reach for all of us.

Let’s talk about two of the big names in the crowd funding real estate game: Fundrise and CrowdStreet. They both have different types of real estate investment options to offer.

Don’t worry that one has to be the ‘winner’ – they’re both solid places to put your money. But your choice might depend on what you want to achieve with your investment.

At a basic level, Fundrise is more accessible for the everyday person, while CrowdStreet is geared towards high-income and high-net-worth investors. CrowdStreet requires you to be an accredited investor, but Fundrise does not. The minimum investment for Fundrise is just $10, whereas you’ll need $25,000 to get started on CrowdStreet.

Now let’s delve a bit deeper.

Fundrise has been around since 2012. It provides a low entry barrier for real estate investment – anyone can get started with as little as $10. The small amount of investment opens up the opportunity to own a share in crowdfunded real estate projects such as multi-family condominiums and office spaces. Annual returns usually vary between 10-14%. This makes Fundrise particularly attractive for new investors wanting lower risk.

On the other hand, CrowdStreet is aimed at accredited investors, offering them options to invest in specific real estate projects and REITs. If you can invest a minimum of $250,000, CrowdStreet will even tailor an investment portfolio to meet your specific needs. It focuses exclusively on commercial real estate properties.

In terms of operation, Fundrise offers proprietary real estate investment trusts (eREITs) and eFunds, while CrowdStreet provides webinars detailing each project’s scope, giving investors details of their investments.

Fundrise has five account tiers, each offering unique features. Starter, the lowest tier, requires only a $10 minimum investment offering a share in a diversified portfolio. The highest tier, Premium, necessitates a $100,000 minimum investment, only available to accredited investors.

Comparatively, CrowdStreet gives insights into how they evaluate assets’ value through their “Investment Thesis” feature. They also provide an insider perspective through their “StreetBeats” video series on commercial real estate market weekly changes.

If we look at their past performances, note that while Fundrise’s returns can appear unimpressive (such as 1.5% in 2022), they’re still better than public REITs and the S&P 500 when both were in the negatives for the same time frame.

For CrowdStreet, the Internal Rate of Return averages out to be 19.4%, the Hold Period averages 2.9 years, and the Equity Multiple stands at 1.59x, based on data from completed deals up to January 2023.

Making a choice between Fundrise and CrowdStreet would primarily depend on whether you’re an accredited investor and how much money you have to invest. With just $10, you can take your first step into real estate investing with Fundrise, whereas CrowdStreet demands a more substantial investment and knowledge base.

While their features and the types of accounts vary, Fundrise seems more suited to beginners or small-scale investors with its transparent fee structure and a low entry threshold. CrowdStreet, however, offers robust resources and a potential for high returns if you’re an accredited investor with substantial funds at your disposal.

Just remember, whichever platform you choose needs to align with your specific investment goals. Real estate can offer long-term growth and even become a passive income generator for you – and crowdfunding platforms like Fundrise and CrowdStreet make this possible for a wider variety of people.

On a side note, there are other platforms like Public, Moomoo, and Webull offering a range of features for investment in stocks, ETFs, options, and more. So, if you’re not ready for real estate but want to dip your toes in the investment world, these can make a good start.

Remember, investing is often about a personal journey – don’t rush, take your time to understand your goals and the platforms, and choose wisely! Happy Investing!