A lot of people ask me which is better, Fundrise or RealtyShares…
…and it’s tough to say.
Both are amazing crowdfunding platforms, both have great services, and both are big players in their industry.
But, they are also very different and serve different types of investors.
So, the real question is, what kind of investor are you? Because it will depend on which crowdfunding website you choose.
Disclaimer: All of the crowdfunding reviews are based on an unbiased matrix of criteria, each weighted based on what we deem important for a crowdfunding platform. We generated the ratings and then sought out the top platforms to affiliate with. If you click on any links on this page or website and then sign up for their service, we may be compensated slightly at absolutely no expense to you.
First, let’s start with the basics
Our criteria are that the top 4 sites will receive 5-star reviews, but Fundrise has the highest score overall and is the #1 site we review.
Fundrise created a marketplace that is fairly transparent and their goal is to “make the process of investing in the highest quality commercial real estate from around the country simple, efficient, and transparent.” Essentially, they bridge the gap between the investor and the developer.
Fundrise currently has roughly 93,000 members and they have invested in nearly $3 billion worth of real estate. They let you invest as little as $500 at a time and you get to pick the projects or funds you want to invest in.
Fundrise pioneered the eREIT offering, which is similar to a REIT but offered under the new regulation A+. They currently have 5 eREITs to choose from and are expanding. They are a bit different than other platforms because it currently only offers its eREIT which is available to both accredited and non-accredited investors.
Fundrise does have higher fees than many other platforms, but it needs to be put into perspective. Fundrise is focused on their eREIT offerings, which are not typical crowdfunding deals. REITs typically have fees of 5-10% while a typical crowdfunding deal has fairly low fees of around 1-2%.
So, Fundrise’s fees are actually quite low when compared to the REIT industry average fees.
RealtyShares is one of the premier crowdfunding platforms. They are only available to accredited investors but they have a wide selection of equity and debt investments to choose from in a wide variety of property types.
RealtyShares is unique because it combines such a wide variety of investment types, strong bankruptcy protections, low fees, and a relatively low investment minimum of $1,000. Additionally, they are one of only a handful that pre-fund each deal.
Pre-funded deals means if they don’t fund it from their investor pool, they are stuck carrying the difference. I believe that this risk leads RealtyShares to be more conservative when underwriting than other platforms.
Fundrise offers a variety of eREITs to choose from with varying focuses. These are regulation A+ offerings so they have a number of requirements on initial investment period, hold, and sale period. Generally, these should liquidate within 5 years and return the capital.
Fundrise also makes the process extremely simple, where you can input your risk tolerance and goal (cash vs equity growth) and they will create a portfolio of eREITs that meet your investing criteria. Additionally, you can invest with a SDIRA, do automatic contributions, and reinvest dividends to stack your returns.
RealtyShares is focused on 506c offerings, which is restricted to accredited investors. These deals are generally single asset offerings and there are no rules about hold period, so you will receive your principal back whenever the deal sells.
You invest once at the beginning, receive dividends throughout, then receive your capital back at the end. You need to check and review the deal, make sure it fits your investing criteria and long-term goals, and invest in the deal.
If you are focused on simplicity with features such as automatic reinvestment or contributions, then Fundrise is for you.
If you want control over the choice of deals and investments, then you should choose RealtyShares.
You may have noticed by now that Fundrise allows non-accredited investors while RealtyShares focuses on accredited investors. Just as a refresher:
An accredited investor has a networth of $1,000,000 or more (excluding primary residence) OR earned more than $200,000 for the last two years ($300,000 if filing jointly) and reasonably expects to earn the same in the future.
So, Fundrise will seem to cater to lower-net-worth individuals while RealtyShares focuses on people with a higher net-worth. While this is completely fine, you need to know which platform will work for you.
If you are not an accredited investor, then the choice is made for you – Fundrise is the only choice.
If you are an accredited investor, then look back at the investment style and determine what fits your goals/style better.
The answer relies too much on if you are accredited or non-accredited. If you are non-accredited then Fundrise clearly wins.
If you are accredited and want to set and forget, Fundrise wins.
Accredited investors who want control over their choices will choose RealtyShares.
You can also check out the reviews of other crowdfunding websites that we track:
Eric is an investor that achieved financial independence at the age of 30. He started in 2009 with the purchase of his first triplex and now owns over 470 units. He spends his time with his family, growing his businesses, diversifying his income, and teaching others how to achieve financial independence through real estate. Eric has been seen on Forbes, Trulia, WiseBread, TheStreet, and other financial publications.
I started out as a full-time student, over $60,000 in debt, and didn't even have a full-time job (two part-time jobs). Learn the system I used to create a 6-figure passive income.
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