Fundrise Alternatives to Consider in 2021

When it comes to real estate investing, Fundrise is one of the best crowdfunded real estate platforms out there. It’s great because it’s available to non-accredited investors, offers real estate diversification, low cost, and has some of the lowest investment minimums.

It’s approachability is also one of its weaknesses – you can’t pick specific investments and you’re at the mercy of their investment strategy. For many, that’s acceptable.

If you are looking for alternatives to Fundrise, to give you additional diversification or exposure into different asset classes within real estate, there are a lot of alternatives to consider. And while Fundrise is a legit platform for real estate investing, several Fundrise alternatives may be a better fit (or a better complement) for your investment strategy.

Table of Contents
  1. Best Fundrise Alternatives for Accredited and Non-Accredited Investors
  2. RealtyMogul
    1. MogulREIT I
    2. MogulREIT II
    3. Private Placements
    4. 1031 Exchange
    5. Pros & Cons
  3. DiversyFund
    1. Growth REIT
    2. Pros & Cons
  4. Streitwise
    1. 1st Streit Office
    2. Pros & Cons
  5. Roofstock
    1. Roofstock One
    2. Pros & Cons
  6. Groundfloor
    1. Pros & Cons
  7. Fundrise Alternatives for Accredited Investors Only
  8. CrowdStreet
    1. Diversified Funds
    2. Individual Deals
    3. Tailored Portfolios
    4. Pros & Cons
  9. PeerStreet
    1. Self-Directed Investing
    2. Automated Investing
    3. Pros & Cons
  10. AcreTrader
    1. Pros & Cons
  11. EquityMultiple
    1. Fund Investing
    2. Direct Investing
    3. Opportunity Zone Investing
    4. Pros & Cons
  12. Summary

Best Fundrise Alternatives for Accredited and Non-Accredited Investors

It’s possible to invest in multifamily and commercial properties with these alternatives. Many of these real estate crowdfunding sites are open to non-accredited and accredited investors.

RealtyMogul

Best for REITs and 1031 Exchange

RealtyMogul offers investment options for non-accredited and accredited investors.

Non-accredited investors have two different real estate investment trust (REIT) options that invest in a basket of properties. Accredited investors have the ability to invest in single properties or participate in a 1031 Exchange.

MogulREIT I

  • Minimum initial investment: $5,000
  • Annual asset management fee: 1%
  • Open to non-accredited and accredited investors

The first of two REIT offerings is MogulREIT I. This REIT pays monthly dividends with an annual distribution rate between 6% and 8%.

Investors should consider this REIT if they want to earn more recurring passive income through debt-type investments.

The minimum investment is $5,000 which is noticeably higher than Fundrise ($500 to $1,000). Each subsequent investment requires a $1,000 minimum contribution.

This REIT invests in multi-family, retail, and office properties across the United States.

The annual asset management fee is 1% which is competitive for REITs. Like other crowdfunded REITs, there are accompanying fund expenses to buy and sell properties. These fees vary.

It’s possible to sell investment shares without an early redemption penalty after three years.

MogulREIT II

  • Minimum initial investment: $5,000
  • Annual asset management fee: 1.25%
  • Open to non-accredited and accredited investors

Consider MogulREIT II if you only want to invest in multi-family apartments.

This REIT focuses on long-term capital appreciation with equity-type investments. This investment strategy can have higher investment returns than the debt-focused strategy that MogulREIT I pursues.

While waiting to sell properties for a profit, MogulREIT II pays a quarterly distribution with a 4.50% annualized return.

The investment minimum is $5,000 and $1,000 for subsequent investments. It’s possible to sell investment shares without an early redemption penalty after three years.

Private Placements

  • Minimum initial investment: $15,000 to $50,000
  • Accredited investors only

It’s possible for accredited investors to invest in single properties via private placements.

The investment minimum is between $15,000 and $50,000 per property with a 3-7 investment horizon. Properties may have quarterly distributions but the dividend schedule and fees vary by offering.

RealtyMogul private placements can include these property types:

  • Multi-family
  • Office
  • Retail
  • Industrial
  • Self-storage
  • Medical office

Here’s what it means to be an accredited investor.

1031 Exchange

Current real estate investors can defer capital gains taxes with a 1031 exchange. RealtyMogul lets accredited investors sell existing properties and acquire a “like-kind property.”

Pros & Cons

Pros

  • Two REIT options
  • Private placements
  • 1031 exchange

Cons

  • $5,000 investment minimum for REITs
  • Early redemption penalty for REITS for the first three years

Read our full RealtyMogul review to learn more about its investing options.

Get started with RealtyMogul

DiversyFund

Best for long-term investments

DiversyFund currently offers one REIT that’s open to all investors. This crowdfunding platform has headquarters in southern California where it may have several holdings. But its Growth REIT holds properties across the United States.

Growth REIT

  • Minimum initial investment: $500
  • Annual asset management fee: $0
  • Open to non-accredited and accredited investors

The Growth REIT has a $500 investment minimum and invests in multi-family properties across the United States.

This fund doesn’t post a regular dividend like most REITs as most of the investment returns come when the fund liquidates.

Unlike some crowdfunded REITs, DiversyFund doesn’t let investors sell their shares until the management team decides to liquidate the REIT. The minimum investment period may be five years.

There isn’t a fixed annual management fee but the fees apply to acquire and sell properties. Reading the offering circular lets you see what fund expenses there are.

Pros & Cons

Pros

  • $500 investment minimum
  • No annual management fees

Cons

  • One investment option
  • Difficult to sell shares

Read our full review of DiversyFund here.

Get started with DiversyFund

Streitwise

Best for investing in office properties

Streitwise lets non-accredited investors and accredited investors invest in office buildings and multi-use properties. There is currently one REIT offering.

1st Streit Office

  • Minimum initial investment: $1,021 (100 shares)
  • Annual management fee: 2%
  • Open to non-accredited and accredited investors

The 1st Streit Office REIT invests in office buildings and mixed-use office/retail properties across the United States. The minimum initial investment is the cost of 100 shares. Each share currently costs $10.21 (January 25, 2021) making the minimum investment $1,021.

This fund pays quarterly dividends with a targeted annual yield between 8% and 9%.

The 2% annual management fee is higher than most crowdfunded REITs which are closer to 1%. Other fund fees apply.

The minimum investment horizon is one year. But you must hold fund shares for five years to avoid an early redemption fee. Most Fundrise alternatives have the same redemption policy.

Pros & Cons

Pros

  • Invests in office and mixed-use building
  • Low investment minimum
  • Quarterly dividends

Cons

  • One investment option
  • High annual management fee

Read our full Streitwise review here.

Get started with Streitwise

Roofstock

Best for buying single-family rental homes

Roofstock is one of the most unique Fundrise alternatives as you can buy turnkey single-family rental homes.

Non-accredited investors can invest but must buy an entire property. This platform can be a good option when wanting to own long-distance investment properties.

Each Roofstock offering lists these details:

  • Home listing price
  • Estimated closing costs
  • Necessary repair costs
  • Cap rate

Potential investors can make an offer through Roofstock. It’s also possible to find a property manager and purchase a home warranty through Roofstock if you buy a rental home.

Similar to a local rental property, investors are responsible for future repairs and maintenance.

Roofstock One

  • Minimum initial investment: $5,000
  • Annual management fee: 0.5%

Accredited investors can participate in the Roofstock One feature to buy fractional shares in individual properties.

The minimum initial investment is $5,000 with a minimum 6-month investment period.

The annual management fee starts at 0.5% of the home price or interest price. Other fees, including property taxes and maintenance costs apply.

Pros & Cons

Pros

  • Turnkey single-family rental homes
  • Fractional ownership for accredited investors

Cons

  • Non-accredited investors must buy an entire property
  • May be unable to tour properties before buying

Read our full Roofstock review to learn more.

Get started with Roofstock

Groundfloor

Best for short-term investing

  • Minimum investment: $10
  • Annual management fee: None

Groundfloor can be the best Fundrise alternative for non-accredited investors wanting to invest in single residential properties. Each property can have between one and four families.

The investment minimum is $10 per property with an average 10% return.

Also, the investment period is only 6-12 months versus several years. Long investment horizons are an inherent trait of crowdfunded real estate investing.

You may appreciate the shorter holding period if real estate default rates concern you. But Groundfloor properties are not risk-free.

You invest in fix-and-flip properties that require extensive repairs. The property owner repays the loan and you earn interest income.

If the borrower defaults, the property may go into foreclosure and investors can lose their investment principal.

There isn’t a preset investor fee withheld from the stated interest rate when you fund the loan request.

Pros & Cons

Pros

  • $10 minimum initial investment
  • 6, 9 and 12-month investment terms
  • Non-accredited investors can invest in single properties

Cons

  • Can only invest in fixer-uppers
  • No managed REIT investment option

Read our full Groundfloor review to learn more about investing in fix and flips.

Get started with Groundfloor

Fundrise Alternatives for Accredited Investors Only

The following platforms are only for accredited investors. Each platform offers different investment options.

CrowdStreet

CrowdStreet only offers investment options for accredited investors. Qualified investors can invest in REITs and single properties for commercial real estate.

Diversified Funds

  • Minimum initial investment: $25,000
  • Annual management fee: Up to 1.5%

The CrowdStreet diversified funds and vehicles can provide exposure to specific sectors within the vast commercial real estate sector.

The minimum initial investment is $25,000 for most funds similar to CrowdStreet’s individual deals. This fee is higher than other crowdfunded REITs.

Fund offerings can vary and investors will need to check the marketplace for open offerings.

Some recent CrowdSteet funds include:

  • E-commerce
  • Medical offices
  • Senior housing
  • Self-storage
  • Multi-assets

Each fund offering lists the targeted average cash yield. The investment period varies between 3 and 10 years for each fund.

The fund management fees can vary by offering. Also, the investment amount can determine the annual management fee. Higher investment amounts can reduce the annual fee.

Individual Deals

  • Minimum investment: $25,000
  • Annual asset management fee: 1.5%

CrowdStreet lists different individual offerings with a targeted investment period between 2 and 10 years. Many deals require a 3-year or 5-year investment commitment.

Each offering lists the targeted internal rate of return and the distribution schedule. Investors may not receive an investment income until the investment period ends and liquidates.

One small downside of CrowdStreet is they rarely offer 1031 exchange properties. Consider RealtyMogul to participate in a 1031 exchange.

Tailored Portfolios

Investors with a high net worth can work with a CrowdStreet advisor to build a customized portfolio.

Pros & Cons

Pros

  • Wide investment selection
  • Managed funds
  • Individual properties and tailored funds

Cons

  • High investment minimums
  • Relatively high investment fees

Read our full CrowdStreet review to learn more.

Get started with Crowdstreet

PeerStreet

Best for short-term investments

Invest in loan notes for single-family and multi-family properties using PeerStreet.

The investment experience is similar to peer-to-peer investing sites like LendingClub but for real estate. Investors can self-direct their investments or take an automated investing approach.

As you invest in debt-structured real estate loans to earn interest income, PeerStreet investments can be less risky. Most individual projects on other platforms are equity-structured deals that rely on capital appreciation and a long-term investment horizon.

Self-Directed Investing

  • Minimum initial investment: $1,000
  • Service fee: 0.25% to 1.00%

The minimum investment is as low as $1,000 with an investment period between one month and 36 months. Most loans have a 6-24-month term. Consider PeerStreet for short-term investments.

Some of the loan types include buy-to-rent and fix-and-flip. Each loan is a first-lien position meaning PeerStreet investor can receive payment first.

Annual average returns are between 6% and 12% which are competitive with other debt-type real estate investments.

The service fee is between 0.25% and 1.00% depending on the loan.

Automated Investing

Each PeerStreet loan only requires a $1,000 minimum investment which is significantly lower than most private placements. It’s easier to invest in multiple loans at once as a result.

Investors can set filters to identify potential investments.

Some of the screening filters include:

  • Loan term
  • Loan to Value (75% maximum)
  • Minimum yield

When PeerStreet finds a qualified loan, they reserve a position for 24 hours. If you don’t cancel within the 24-hour period, PeerStreet buys a position.

Unlike some peer-to-peer automated investing platforms, PeerStreet won’t build a portfolio for you. Investors must set up their own loan screens and PeerStreet handles the rest.

Pros & Cons

Pros

  • Short-term residential and multi-family investments
  • $1,000 minimum investment
  • Automated investing

Cons

  • Cannot sell loan position early
  • No equity-structured investment options

Read our full PeerStreet review to learn more.

Get started with Peerstreet

AcreTrader

Best for farmland investing

Experienced real estate investors will appreciate how AcreTrader makes it easy to invest in another asset class – farmland.

Different tracts from across the United States come available on a regular basis. It’s possible to invest in farmland that grows row crops like corn and soybeans. Some offerings provide pecans and almonds.

The minimum investment is between $10,000 and $25,000 per offering. Average investment returns are between 3% and 10% depending on the deal structure.

In most offerings, investors earn rental income from the tenant farmer. Offerings with higher income potential can earn income from crop sales.

The minimum investment period for most offerings is five years but can be as high as 10 years.

There is an annual servicing fee of 0.75%.

AcreTrader doesn’t always have open investment offerings but investors can receive alerts about upcoming deals. Each deal comes with an offering circular and a webinar to help research the project.

Pros & Cons

Pros

  • Earn rental income from farmland
  • Invest in multiple states and crop types
  • Low annual servicing fee (0.75%)

Cons

  • Open offerings are not always available
  • Minimum 5-year investment period

Read our AcreTrader review and decide if farmland investing is for you.

Get started with AcreTrader

EquityMultiple

Best for commercial real estate investing

EquityMultiple offers private placements in commercial real estate along with managed funds. One unique trait about EquityMultiple is the ability to invest in tax-advantaged opportunity zones and 1031 exchange properties.

Fund Investing

  • Minimum investment: $20,000
  • Annual management fee: 0.50% to 1.5%

To easily invest in multiple projects, consider a managed fund. EquityMultiple offers funds for these loan structures:

  • Debt
  • Equity
  • Commercial real estate securities
  • Opportunity zones

The minimum investment starts at $20,000 but can be higher with an average 1% annual servicing fee. The investment period is between 1.5 and 10 years.

Direct Investing

  • Minimum initial investment: $10,000

Directly investing in individual properties starts at $10,000 per offering. The holding period is between 6 months and five years for most properties.

Debt, preferred equity and common equity deal structures are available.

The fee structure depends on the deal type. Debt and preferred equity offerings incur a rate spread. Equity investments have an annual asset management fee.

1031 exchange investing is available too for qualifying properties.

Opportunity Zone Investing

An opportunity zone is a relatively new investment option stemming from the 2017 tax law changes. State and federal governments can designate certain urban, suburban and rural areas for economic development.

It’s possible to defer capital gains tax payments but investors may need to hold the offering for at least 10 years.

EquityMultiple may require a minimum $40,000 investment to invest in an opportunity zone. They also offer an opportunity fund to quickly diversify into this asset class.

Pros & Cons

Pros

  • Many investment options
  • Opportunity zone investing

Cons

  • Relatively high investment minimums

Get started with EquityMultiple

Summary

There are plenty of Fundrise alternatives that can help you earn passive income. You can increase your exposure to commercial and multi-family real estate or branch into another asset class. These platforms can help you successfully invest in crowdfunded real estate.

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Josh Patoka

About Josh Patoka

After graduating in $50k with student loans in May 2008 from Virginia Military Institute with a B.A. International Studies and Political Science with a minor in Spanish (I studied abroad in Sevilla, Spain for 3 months), Josh decided to sell his soul for seven years by working in the transportation industry to get out of debt ASAP and focus on doing something else with a better work-life balance.

He is a father of three and has been writing about (almost) everything personal finance since 2015. You can also find him at his own blog Money Buffalo where he shares his personal experience of becoming debt-free (twice) and taking a 50%+ pay cut when he changed careers.

Today, Josh relishes the flexibility of being self-employed and debt-free and encourages others to pursue their dreams. Josh enjoys spending his free time reading books and spending time with his wife and three children.

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