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Written by Ed Canty, CFP® on August 9, 2021
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Fundrise vs Streitwise 2021: Best Crowdfunding Platform?

Investing in real estate can be a great way to build wealth. In fact, it has been turning average people into millionaires for years! However, the typical real estate investments where you have to own a physical property tends to be out of reach for most. This is because you often need tens of thousands of dollars to get started. 

However, with REITs and real estate crowdfunding, investors can pool their money together and invest in real estate projects. Here, we look at two platforms that offer similar investment opportunities to investors; Fundrise vs Streitwise.

Fundrise vs Streitwise: The Basics

Fundrise offers users the opportunity to own real estate without having to find, manage and direct the investment. Two of the best aspects of Fundrise is the low minimum to invest and the transparency of fees.

The starter portfolio has a minimum investment of just $10 making the barriers to entry very low. This is accomplished through proprietary technology called eREITs and eFunds.

Streitwise offers an opportunity for investors to invest in real estate without necessarily owning a property. The platform offers real estate investment trusts (REITs) that feature relatively low fees and a minimum investment of $5080. Since 2017, they have returned an average of 9.4% to their investors. 

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what are the risks of investing in fundrise real estate platform

Fundrise Review 2021: Best Passive Real Estate Investment?

  • Pricing & Fees
  • Transparency
  • Operating History
  • Liquidity
  • Investment Minimum
  • Historical Performance
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Streitwise Review 2021: Best Real Estate Investing Platform?

  • Pricing
  • Transparency
  • Due Diligence
  • Historical Performance
  • Investment Selection
View Current Streitwise Offerings

Summary: Fundrise vs Streitwise

  • Fundrise offers real estate investments across the US through portfolios that are prebuilt
  • Fundrise has different portfolios based on your investment objective - long term growth and income portfolios as well as a mix
  • Streitwise offers investments in REITs which invest in rental real estate such as office buildings
  • Streitwise will choose your specific investment for you, based on their current portfolio offerings
  • Fundrise is open to accredited and non-accredited investors
  • Streitwise is open to an accredited and non-accredited investors, but if you are non-accredited you will be subject to limitations 
  • Fundrise utilizes eREITs and eFunds with a $10 minimum investment
  • Streitwise has a $5,080 minimum investment
  • You can earn quarterly dividend distributions with Fundrise which can be automatically reinvested
  • Low fees of 1% annually with Fundrise
  • Lower than average fees for private REITs with Streitwise 
  • Both Fundrise and Streitwise are long term investments, with a 5 year minimum time horizon 
  • Dividends redeemable quarterly for Streitwise investors
  • One year locking of principal investment with Streitwise
  • Streitwise available to US citizens as well as legal US residents in addition to non-US customers
  • Liquidity and redemption is not guaranteed with either platform
  • Early redemption is often subject to fees for both platforms

What Is Fundrise?

Fundrise is a crowdfunded real estate investing platform that establishes and manages investments in real estate throughout the United States.

These investments are collectively put together into portfolios which are fully managed by the team. This makes Fundrise a 100% passive, hands off investment.

Fundrise offers investments in what the platform calls eREITs and eFunds which are real estate investment trusts or partnerships. These investments are offered across Fundrise investment portfolios that are pre-built for investors. 

Read our full Fundrise review to learn more.

Best Real Estate Platforms

How Fundrise Works

When you want to invest with Fundrise, you sign up and open an account.

You provide your personal information, including date of birth, name, address, phone number, social security number and other details.

Once you have signed up, you can proceed to invest. There are 5 different accounts you can choose from.

Starter Portfolio - The Fundrise Starter portfolio is composed of 50% growth assets and 50% income assets. This portfolio is only a $10 minimum investment compared to the other core portfolios. 

Basic- Fundrise Basic accounts give you the opportunity to participate in all that the Starter Portfolio offers with the addition of IRA investing and the ability to create your own personal investment goals. The minimum investment for Fundrise Basic accounts is $1,000.

Core - Fundrise Core accounts give you the opportunity to invest in the standard Fundrise portfolios - supplemental income, long-term growth, and balanced investing. The minimum investment for Fundrise Core accounts is $5,000.

Advanced - Fundrise Advanced accounts provide all the features offered in Core, plus access to additional investment opportunities. These investments are not available to all Fundrise investors and are more strategic in nature. The minimum investment for Fundrise Advanced is $10,000.

Premium - Fundrise Premium accounts give you all the features offered in Core and Advanced, plus even more unique investment opportunities. These investments typically have longer time horizons and have a limited number of investors. The minimum investment for Fundrise Premium is $100,000.

Fundrise Fees

There are two main fees charged on the Fundrise platform which add up to 1% annually.

An annual asset management fee of 0.85% is collected by Fundrise for managing the real estate assets themselves.

Fundrise also charges an annual 0.15% advisory fee for managing your investment portfolio.

That being said, there may be other miscellaneous fees the company may charge. There are asset origination fees which could add up to 2%. However, these are one time fees at the inception of a new investment. 

There are also early redemption fees for redeeming your shares before the 5 year time horizon. The early redemption fee can be from 1-3% of your Fundrise investment. This is why you should only invest if you have a minimum time horizon of 5 years. This is not a short term investment. 

Fundrise Fees Explained

Different Investment Strategies

Fundrise offers varying investments that come in the form of supplemental income, balanced investing and long term growth. The allocation of your investment depends on whether you want income or growth or a combination of the two.

If you are investing for income, you can automatically reinvest those dividends back into your Fundrise portfolio to earn compound interest.

Fundrise iPO

This is a new feature that the company has introduced. With Fundrise iPO, the company will sell shares of the Fundrise parent company itself through internet Public Offering (iPO). 

An investor will need to have in their account an investment amount of $1,000 or more. They also need to have selected at least one of the advanced plans. With this offering, an investor is able to invest up to 25% of their entire account balance in the Fundrise platform itself. 

Fundrise Pros

  • Low minimum investment, the Starter Portfolio has a minimum of $10
  • Only 1% annual fee, but there may be origination fees for new projects
  • There is no requirement to be an accredited investor  - any investor can invest in the platform regardless of their net worth or income
  • You earn quarterly dividends that you can automatically reinvest
  • Redemption period each quarter, however they cannot guarantee liquidity

Fundrise Cons

  • They cannot guarantee liquidity and can suspend redemptions
  • eREITs and eFunds are not publicly traded
  • The distributions taxed just like ordinary income- this is opposed to qualified dividends, which can be taxed at long term capital gains rates

What Is Streitwise?

Streitwise is a REIT that manages real estate, mainly office properties, and is open to most investors. The minimum investment is $5,080 to get started with Streitwise. 

The company has historically returned dividends of 9.4% each year. The dividends are distributed to investors quarterly. The company has stated that they will continue to target returns of 8-9% indefinitely.

When you invest with Streitwise, your principal investment gets locked up for a period of up to one year. It is after the lockout period when you can redeem shares every three months. But be cautious as the minimum investment is 5 years, and you can be subject to early redemption fees if you withdraw funds before that. 

The current Streitwise REIT holds 15 commercial properties. The dividends are usually paid quarterly and are net of fees.

Read our full Streitwise review to learn more.

Crowdfunded Real Estate Free Training

We put together a free 30 minute video training that walks you through the entire process, step by step. This training will help you get up and running in no time at all.

GET THE GUIDE

How Streitwise Works

If you want to invest in commercial real estate through Streitwise, you will need to open an account.

They will ask you to provide personal information, including email address, full name, street address, the dollar amount you’d like to invest etc. The platform will also need you to indicate whether you are considered an accredited investor or not. As a result, you will have to confirm your income as well as your net worth. After you provide this information, you fill out an ACH Authorization Form so that you link your bank account. This is how you will fund your investment. 

Once you create your account and link your bank, you are ready to invest!

Minimum Initial Investment

Streitwise has a $5080 minimum for your first investment. After that, any additional deposits must be made in $500 increments.

When you fund your account, you have the option of doing so through an ACH payment, wire transfer, or even cryptocurrency. Streitwise accepts payment through Bitcoin and Ethereum.

Account Types

If you are investing in a Streitwise REIT, you can use different types of accounts. Individuals can hold this REIT, or within a corporate account. Streitwise offers individual accounts, self directed IRAs and 401(k)s. You can also hold a Streitwise REIT in trusts and LLCs. 

Streitwise Investor Requirements

Streitwise is available to both accredited and non-accredited investors. However, if you are non-accredited then you may be subject to investment limitations. 

Non-accredited investors can only contribute up to 10% of their annual income or 10% of their total net worth. 

To be considered an accredited investor, you must have earned income exceeding $200,000 or $300,000 jointly within the last two years. They should also expect to earn the same or more the current year.

Alternatively, they must have a net worth of more than $1 million – excluding the value allocated to their primary residence.

streitwise real estate investing company

Dividend Reinvestment

Investors can take advantage of the dividend reinvestment plan (DRIP) that Streitwise offers.

Instead of taking your dividend in cash, you can automatically use it to purchase additional shares of the REIT. This is how investors can compound their returns over time.

Platform Security

Streitwise uses a variety of security measures to keep client information secure. The platform is compliant with the SEC and Regulation A of the Securities Protection Act. 

Investors must understand returns are never guaranteed on Streitwise, and the potential to lose money in your investment is always possible. There is no insurance against possible investment losses. 

They do all signing of documents through electronic methods via secure online services.

Streitwise Fees

There are two main fees you will pay on the Streitwise platform. These consist of annual management fees and upfront acquisition fees. 

  • Annual Management Fee: 2%
  • Upfront Acquisition Fee: 3% (one time fee)

The dividends you receive are net of, or after these fees.

Streitwise Pros

  • Streitwise REITs are available to accredited and non-accredited investors, but non-accredited will be subject to investment limitations
  • REITs can be held in self-directed IRAs, but can also be held in self-directed 401(k)s
  • The company uses strict investment principles when selecting potential investment properties
  • Being an equity REIT, Streitwise offers a great opportunity for investors to potentially earn dividends and/or capital appreciation
  • Streitwise Stockholder Redemption Plan provides you with a chance to redeem stock for 90 percent of its value when you have ended the lockout period of one year, however early redemption fees apply

Streitwise Cons

  • Investors have limited liquidity and there is no guarantee that you can sell when you want to
  • Streitwise imposes an upfront fee of about 3%– the fee is for ongoing operations
  • The ongoing fee is 2% annually
  • They started in 2017, so it’s a new platform that may not have a long-standing track record

Fundrise vs Streitwise: Conclusion

While both Streitwise and Fundrise offer online real estate investment platforms, they each have their own unique features. 

Fundrise offers both debt and equity investments through portfolios of properties across the US. These portfolios are split into growth, income or a blend of both. The minimum investment in the starter portfolio is just $10.

Streitwise, on the other hand, only offers one REIT right now which owns two commercial office properties. With Fundrise, you are investing in a diversified portfolio of mostly residential real estate. The minimum investment is $5,080. 

Fundrise has been here since 2010 and has shown remarkable performance over time. Fundrise also has much lower fees when compared to Streitwise, which has a more limited operating history as well. 

Streitwise, being a relatively new kid on the block, does not have a long track record. However the 10% annual dividend yield has been very impressive. 

Fundrise owns and operates its properties, unlike Streitwise. 

Both Fundrise and Streitwise offer unique ways to invest in real estate using an online platform. Fundrise seems to offer more flexibility and Streitwise is less diversified overall by owning just office buildings. Investors should be aware of the potential risks and costs involved with both platforms. 

fundrise vs streitwise
Article written by Ed Canty, CFP®
Ed is a CERTIFIED FINANCIAL PLANNER™. At his day job, Ed helps clients plan for retirement, manage their investments, and navigate their tax situation. In his free time, Ed enjoys golfing, traveling, fishing, and wrenching on his old car.

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