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The growing interest and investment opportunities in real estate markets has led to a rise in real estate crowdfunding platforms across the internet. These platforms are a hassle-free and convenient way to own real estate and enable you to invest in specialized properties. You may choose to invest in real estate investment trusts (REITs) that work like mutual funds for real estate and allow you to own multiple properties in one fund.
Some platforms allow you to invest in individual real estate properties while others offer partial ownership. With real estate crowdfunding platforms, you can choose how you want to invest and the type of property you want to invest in.
Fundrise and RealtyMogul are both very popular platforms and offer the best services to investors who are keen to build a real estate investment portfolio without investing a huge amount of money. Here is a detailed comparison between RealtyMogul and Fundrise.
|In A Nutshell||RealtyMogul offers an online marketplace for accredited and non-accredited investors to invest in commercial real estate deals. The platform offers a buyback program to enhance investment liquidity.||Fundrise is an online real estate platform that allows investors access to a portfolio filled with dozens of real estate projects — each one carefully handpicked and proactively developed with the goal of growing their net worth.|
|Our Review||Full RealtyMogul Review||Full Fundrise Review|
RealtyMogul vs. Fundrise: Overview
RealtyMogul and Fundrise are U.S.-based platforms that cater to different types of investors. Here’s an overview of each.
RealtyMogul is a crowdfunding platform with more than 185,000 registered members and has provided capital for more than 375 investments. RealtyMogul allows you to invest in REITs and private real estate investment properties. However, the investments carry high risks and higher rewards. You can choose the specific properties you want to invest in and when the income is received. You can also reinvest your income back into the transaction.
RealtyMogul invests in a variety of properties including apartment buildings, industrial, multi-family units, self-storage, retail space and offices. They have a very strict vetting process that reduces risk and requires you to be an accredited investor if you want to invest in private placements. Read our full RealtyMogul review to learn more.
Fundrise is an investment platform that is open to all, including individuals who do not have a high net worth. It was established in 2012 and has invested more than $4 billion in real estate. It allows you to invest in eFunds and eREITs. Both of these investment instruments are unique to Fundrise which means they are not publicly traded and you can only invest in them through the platform.
eREITs focus on income while eFunds prioritize growth. Regardless of which you choose, eFunds or eREITS, you will be investing in a range of properties, including commercial and single-family residential.
By investing through Fundrise, you can earn a consistent income and enjoy capital appreciation. These funds can be set up as equity investment, debt, or preferred equity. Fundrise has a low minimum with zero fees and no accreditation requirements. Read our full Fundrise review to learn more.
RealtyMogul vs. Fundrise: How Do They Work
Both platforms offer unique investment options for investors to choose from. Let’s see how each works.
RealtyMogul is a crowdfunding platform that allows investors to choose from a variety of real estate investments. It offers industrial sites, office buildings, multi-family dwellings, medical buildings, and other commercial buildings. When you invest, you buy shares in the RealtyMogul limited liability company. This company invests in the LLC which holds the title to the property. The tenure of the investment is based on the type of investment and can range anywhere from 3 and 10 years.
Based on the available listings, you can put your money in a specific project or the non-traded REIT (apartment growth REIT or income REIT) products.
The REITs are not registered with the SEC but RealtyMogul Advisory is. Both REITs have an automatic reinvestment option and enable you to set up an automatic recurring investment from the bank.
Fundrise is a real estate investment platform that allows you to invest in real estate investment trusts (eREITs) and eFunds. You can start your investing journey for as low as $10 and choose from residential and commercial real estate properties. Fundrise has a five-tier structure and each tier offers unique services and has a minimum investment requirement.
- Starter: A basic account level that only requires $10 to begin investing; You can enjoy diversification with the Flagship Fund and set an automatic investment of $10 or higher every month. It also offers automatic reinvestment of dividends.
- Basic: The basic plan includes all the features of the Starter plan and allows you to set your investment goals and invest through IRA. It requires you to make the minimum investment of $1,000 and gives you access to the Fundrise IPO.
- Core: The third tier is the core level where you need to make an investment of $5,000 and you will get a chance to customize the investment based on long-term goals like growth, balanced returns, or income. You can invest in any of the eREITs and on referring someone, six months of your advisory fees will be waived.
- Advanced: The advanced tier starts at $10,000 and has all the features of the Basic and Core accounts. It allows you to invest in Fundrise eFund and the plus plans. Whenever you refer a friend, you enjoy a waiver of nine months of advisory fees.
- Premium: The top tier or premium requires a minimum investment of $100,000 and is only available to accredited investors. You can also invest in private funds whenever they are available in this tier. It also gives you priority access to the investment team and for each referral, you get a waiver of an entire year of advisory fees.
RealtyMogul vs. Fundrise: Main Features
Here are some of the top features of the platforms that make them unique in the industry.
|Minimum Investment||$5,000||$10 (Starter Portfolio), $1,000 (Basic Plan), $5,000 (Core Plan), $10,000 (Advanced Account Level), $100,000 (Premium Account Level)|
|Account Fees||1.00% to 1.25% per year asset management fee||0.85% (Asset Management Fee) and 0.15% (Advisory Fee)|
|Offering Types||Equity||Debt, Equity and Preferred Equity|
|Property Types||Commercial Real Estate (CRE)||Commercial Real Estate (CRE), Residential and Single Family|
|Advertised Returns||15.6% to 26.1% (Target returns)||10.1% (Average returns)|
|Distributions||Varies by Project||Varies by project|
|Time Commitment||3-10 years||5+ years|
|Promotions||None||Advisor Fee Waived (*12 months)|
|Best For||Real estate investors looking for opportunities beyond publicly-traded REITs||Investors looking for a low-cost entry into real estate investing|
RealtyMogul is a secure and user-friendly platform with some great features.
Non-Accredited Investor Options
RealtyMogul allows non-accredited investors to own a piece of real estate and earn income through REITs.
Low Minimum Investment
RealtyMogul is a platform easily accessible to all types of investors and it allows you to get started for as low as $5,000.
Free to Join
The platform will not cost you anything to join. The individual investment offered on the platform may carry their own fees.
Public non-traded REITs are illiquid and can lock up your money. However, RealtyMogul has a REIT Share Repurchase Program that allows you to sell the income REIT shares back to the platform every quarter. Note that buybacks are subject to capital availability. RealtyMogul may repurchase the shares at a reduced price after you have held them for a year. The buyback and holding period are as shown below:
- 0% when held for less than one year
- 98% when held between one and two years
- 99% when held between two to three years
- 100% when you hold REITs for more than three years
Accredited investors can also invest in 1031 exchanges. Doing so helps handle the capital gains tax when you sell an asset and will instantly reinvest the proceeds even before they turn taxable. Usually, this process is complex and requires you to meet specific eligibility criteria but RealtyMogul makes it simple.
The Income REIT invests and manages a large portfolio of different commercial real estate properties. It owns different commercial properties and also invests in real estate-related debt and equity assets. If you want monthly dividends, you can invest in Income REITs. Additionally, you can also go with a dividend reinvestment plan to enjoy growth and regular income.
Apartment Growth REIT
An Apartment Growth REIT invests in the common and preferred equity of multifamily apartment properties across the nation. The buildings offer high income and occupancy in different market cycles. The REIT aims to realize capital appreciation so it is a good option for growth strategies. It is open to accredited and non-accredited investors. The distributions are paid each quarter.
A private placement is a single investment into an individual property or several properties. RealtyMogul offers equity investments across retail, offices, and industrial properties. But this investment option is only open for accredited investors and the minimum investment ranges from $25,000 to $50,000 with a horizon of three to 10 years. The distribution is done quarterly.
Fundrise is a great platform for real estate investing and allows you to start your investment journey for as low as $10. You do not need to be an accredited investor to be a part of Fundrise. Here are some of its top features.
You can invest in Fundrise’s internet Public Offering. By buying shares of Fundrise’s parent company as an early-stage investor, you can enjoy the company’s growth. However, the minimum investment amount is $1,000 and the shares cannot be publicly traded.
You can grow your wealth through dividend reinvestment. Fundrise offers a Dividend Reinvestment Program where you can reinvest the dividends you receive automatically and grow your wealth at no extra cost.
Self-Directed IRA Accounts
Fundrise has a redemption program where you can sell your shares back to the company and you for a fee of anywhere between 0% and 3% of the share price. But redemption within the introductory 90-day period will not attract any fees. Fundrise can also suspend the redemption at any time.
From the Basic account level and upwards, you can plan your long-term goals, like retirement. Fundrise has a goal tracker to help you out. It will also give recommendations on the necessary steps to take to achieve your goals.
Varying Investor Tiers
You can choose from the five account levels and their features will open as you continue to grow the investment. They come with the same advisory fee and give access to a wide range of products.
eREITs and eFunds
You get to invest in 18 types of eREITs and eFunds through Fundrise. But the funds aren’t publicly traded and they offer income, growth, balanced focus, and income and growth options.
Easy to Use
Fundrise is a user-friendly platform and there is a simple and straightforward dashboard that makes it easy to set up an account and start investing.
Own Property without the Stress of Being a Landlord
Fundrise allows you to invest in real estate for as low as $10 and own property without taking on the stress that comes with being a landlord.
RealtyMogul vs. Fundrise: Investment Options
Fundrise and RealtyMogul allow investors to access funds that offer different commercial real estate opportunities.
RealtyMogul has several commercial properties to invest in and also offers standalone real estate investments. As an accredited investor, you can also get access to individual properties.
Fundrise lets you invest in commercial and residential real estate, as well as single-family properties.
RealtyMogul vs. Fundrise: Returns
No platform can offer a guarantee on the amount of returns your investment will generate but a quick look at historical returns can give you a good idea.
RealtyMogul provides information about its historical performance. Its private placements are distributed on a quarterly basis and potential returns range from 0% to 10% in average annualized returns based on the investment type. The RealtyMogul Income REIT has monthly distributions ranging from 7.7% to 8% annualized since inception.
The Apartment Growth REIT has quarterly distributions of around 4.5% annualized. RealtyMogul has a targeted Internal rate of return ranging from 15.6% to 26.1%. The targeted cash on cash returns range from 5.9% to 7.5% and the targeted equity multiples range from 1.51 times to 2.46 times.
Similar to RealtyMogul, Fundrise provides details about the returns it generated in the past. Here are the average annualized returns for the past few years to help you understand the historical performance of Fundrise.
- 2021: 22.99%
- 2020: 7.31%
- 2019: 9.16%
- 2018: 8.81%
- 2017: 10.63%
RealtyMogul vs. Fundrise: Fees & Commissions
Let us take a look at the fees and commissions applicable to investments on each platform.
RealtyMogul will charge fees on the type of investment you make. There will be a 1% annual asset management fee and the REIT management fees range from 0.50% to 0.60% annually. You may also have to pay a one-time fee for certain investments.
Fundrise has a flat annual fee of 1%. This fee is made up of a 0.15% investment management fee and a 0.85% asset management fee. Further, there is an asset origination fee ranging from 0% to 2% of the investment. The investors who redeem their shares before holding them for five years will have to pay an early redemption fee. This fee will be reduced each year you hold the investment.
RealtyMogul vs. Fundrise: Platform and App
Both platforms have a friendly website but they do not both have a mobile app.
RealtyMogul is a user-friendly platform but it is only available on the web browser and does not have an app. Realty Mogul uses firewalls as well as encryption to protect and store data. It also monitors the system infrastructure to identify weaknesses and intrusions at all times.
Fundrise has an edge over RealtyMogul because it offers an app and a website that is easy to navigate. Fundrise has two-factor authentication as an optional security feature and uses bank-level security to encrypt investor information. All the connections to the platform are encrypted over HTTPS with transport layer security.
RealtyMogul vs. Fundrise: Customer Support
If you ever need to contact customer support for more information, here’s how easy or difficult it will be.
It is possible to reach RealtyMogul by email or phone during regular business hours. There is a team of professionals who are always happy to help members with their queries.
It is not easy to get in touch with the team at Fundrise unless you are a premium account member. They get priority support and can schedule calls while members from other account levels can only contact the team through email or the website’s contact form. The response time is usually two business days. There is no direct contact number to speak to a team member.
RealtyMogul vs. Fundrise: What We Like
After looking at both platforms, this is what we like about each.
- Open to non-accredited investors
- Reinvestment of earnings
- Automatic investing
- Secure platform
- Easy-to-use website
- Low minimum investment
- Access to different proprietary funds
- Various plans available for different investors
- Opens more features as the investment increases
- Simple and easy process
- Convenient mobile app
- Dividend reinvestment
- Secure investing
RealtyMogul vs. Fundrise: What We Don’t Like
Both the platforms have some drawbacks. We dive into those below.
- Minimum investment of $5,000 to get started
- Illiquid investments
- No mobile app
- Varying fee structure
- Standalone properties only for accredited investors
- Limited features for small investors
- Illiquid investments
- Long-term investments only
- High annual fees
- No option to invest in individual properties
- Redemptions are not guaranteed
Who Is RealtyMogul For?
Realty Mogul is ideal for those investors who have a strong risk appetite and are ready to invest for high rewards. It is also open only to accredited investors for some investments.
In A Nutshell
- Minimum Investment: $5,000
- Fees:1.00% to 1.25% per year asset management fee
- Promotion: None
Who Is Fundrise For?
Fundrise is ideal for investors looking to achieve the right mix of income and growth through real estate investment. If you are looking for immediate cash flow, the income option is suitable for you. But if you want to add growth to the investment portfolio mix, you will have to wait until the investments are sold. This means you will have to tolerate risk and hold the investment for the long term.
FAQ RealtyMogul vs. Fundrise
Here are some common questions that you may come across when picking the right real estate investment platform for your investment journey.
Do I Need to be an Accredited Investor to Invest with RealtyMogul or Fundrise?
You do not need to be an accredited investor to invest in Fundrise or RealtyMogul. It is available to both accredited and non-accredited investors. However, some investment options are only open to accredited investors on RealtyMogul.
Which Platform Is Better: RealtyMogul or Fundrise?
No particular platform is better for all types of investors. It is important to understand your risk appetite, financial goals, availability of funds, and personal preferences before you make the decision to invest. Fundrise is a good platform if you want to invest in single-family rental properties and have a small investment amount.
Which Platform Is Better for Beginners, RealtyMogul or Fundrise?
As a beginner, you must choose a platform that works best for you and serves your investment goals. Fundrise is a good platform because it has low minimum investment and does not require you to be an accredited investor.
Both real estate platforms have a track record of success and a strong user base. They are ideal for investors keen on real estate investment and seeking to build a diversified portfolio. They also offer a variety of projects to choose from and have generated strong returns in the past.
No matter what you decide, research well and do your due diligence. You must identify your goals and monitor how much you put into crowdfunding. If you want to invest in individual properties, you will have to use RealtyMogul. But, if you do not have a lot to invest and are not keen on owning individual properties, Fundrise will work best for you. Understand how the platforms work and whether either or both fits your needs and goals before making an investment decision.
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Vandita Jadeja is a chartered accountant and a personal finance expert. She has experience in marketing and content creation. Her work has been featured in Forbes Advisor, Business Insider, Joy Wallet, and InvestorPlace. She loves dogs, books, and mountains.