DiversyFund vs Fundrise Real Estate Platforms
Posted on August 12, 2021 in Investing
Looking to make money from real estate? Discover which crowdfunded real estate platform is better, DiversyFund vs Fundrise.
If you’re looking for real estate investment opportunities, you’ll want to find the best platform available for your needs. DiversyFund and Fundrise are two of the most popular real estate investing platforms available, both with several features that can help you with your investment. Here’s what you need to know.
People who are looking for investment opportunities in real estate don’t always have the ability to put a large chunk of money down or take out a loan for funding. The good news is, those things aren’t always necessary. With platforms such as Fundrise and DiversyFund, you can start investing in real estate with little to no money down.
The platforms make real estate investing possible for those who otherwise wouldn’t be able to invest. They remove the expense of investment as well as the need to manage rental properties as a part of the investment.
Choose the best platform for your needs by learning about DiversyFund vs Fundrise.
DiversyFund vs Fundrise
There are multiple crowdfunded real estate platforms out there, with Fundrise and DiversyFund being two of the most common and popular. Their purpose is to offer minimum-pay investment opportunities to those who have little or no money to invest in an effort to democratize real estate investing.
The two companies are very similar and seem to offer similar services, however there are a number of differences between DiversyFund vs Fundrise.
What is DiversyFund? How Does it Work?
DiversyFund is one popular real estate investing platform. Its focus is on investments of large apartment buildings that have at least 100 units. DiversyFund’s process is acquiring income-generating multifamily apartment buildings that have been undervalued.
These are properties that won’t have an increase in cash flow without a great deal of improvements. With improvements, their rental income can increase, which could lead to an increase in value for the building. Monthly income is regularly reinvested in efforts to continue improving the property until it is sold. Once the property is sold, investors receive a distribution of accumulated dividends and capital appreciation, which gives DiversyFund investors the option to reinvest or to cash out.
Who Can Invest with DiversyFund?
Any citizens or residents of the US can invest using the DiversyFund platform. Anyone with a Social Security number, a visa, an Individual Taxpayer Identification number, or US entities operated by non-US residents, are able to open accounts. Investors must also be at least 18 years old, although minors can be designated as beneficiaries.
To create a DiversyFund account, use your email and create a password. You’ll also need to provide information such as your Social Security number or ITIN.
Once you have an account, you’ll be able to choose the amount that you want to invest, with a minimum of $500 and a maximum of $1 million. Investments can be either one-time or recurring, with the potential to set up recurring investments at a later time.
Advantages and Disadvantages of DiversyFund
When you invest with DiversyFund, there are a number of advantages and disadvantages that you’ll want to consider. Advantages include low investment opportunities, simplification of the investment process, and no annual fees. Disadvantages include the inability for investors to choose their investments, no withdrawals, and no retirement accounts.
What is Fundrise? How Does it Work?
Fundrise is another investment platform that includes single-family residences, commercial real estate properties, apartment buildings, and private equity funds. Investments take place by placing funds in eFunds and eREITs, which are expertly managed diversified investment portfolios.
There are three tiers with Fundrise vs DiversyFund, based on the amount and sophistication of the investment. The tiers are Core, Advanced, and Premium, each with a different minimum investment amount.
With $1,000 minimum investment, you can invest in one of three diversified real estate portfolio options: supplemental income, balanced investing, or long-term growth.
With a $10,000 minimum investment, you gain access to Fundrise’s Plus plans, which enable you to allocate to specific funds. The Plus plans keep part of your portfolio for real estate strategies that grow over time, and help you earn more passive income.
With a minimum of $100,000 investment, you can invest in specialized private equity funds that are liquid assets. These assets carry more risk compared to traditional residential real estate and a diversified portfolio; however they also provide the potential for an outsized performance.
Another option that Fundrise offers is the starter plan. For just $500, you can enroll in the Starter plan, which will introduce you to Fundrise and real estate investing. When you are in the Starter plan, you get a portfolio with money split evenly between the Income and Growth portfolios. Those who begin in the Starter plan can upgrade to the Core tier after they’ve invested at least $1,000.
Who Can Invest with Fundrise?
Fundrise investment opportunities are for any US citizen or permanent resident who is currently in the US that is at least 18 years old. Investors don’t need to be accredited for Starter, Core, or Advanced plans, but must be accredited for the Premium investment plan.
To begin investing, investors open an account as an individual, or jointly, in a real estate investment trust, or in an IRA. Simply provide your email address and other personal information, such as your Social Security number. When you apply, you will be asked to supply an investment goal and any experience you have with investing. You will also need to share your investment time frame and your annual investment strategy plan. Your application will end with a recommendation of tier/plan, which you can choose, upgrade, or downgrade.
Advantages and Disadvantages of Fundrise
There are multiple advantages and disadvantages of investing with the Fundrise platform. Advantages include the three levels to choose from based on investment amount, the ability to invest with an IRA, as well as the longevity and results of Fundrise. Disadvantages include the larger investment requirement for advanced features, annual fees included, and an early withdrawal penalty.
DiversyFund vs Fundrise Differences
A comparison of DiversyFund vs Fundrise show there are a few differences that will help you decide which platform is right for you.
- DiversyFund is simply a real estate investing platform, with no other available options. Investments of all sizes will receive the same features and will be invested in the same assets. On the other hand, Fundrise has multiple options for investors, with different levels for different investment amounts and the potential to gain more features with growth. For more opportunities and options with greater sophistication, Fundrise is the best choice. However, if you want to streamline your investment process, DiversyFund provides a seamless experience.
- DiversyFund does not have any annual fees. Instead, there is a development fee that costs 2 to 8% of the management cost of each project. Fundrise has a 1% yearly fee which contains .85% for annual management and .15% for annual advisory. There is also a 3% early withdrawal fee for withdrawals within the first 5 years. For a basic, traditional investing fee structure, Fundrise meets your needs. Or, to pay once for each project, the DiversyFund way might just be the answer if you’re looking for simplicity and no need to pay for advisory fees and management fees.
- As a real estate investment platform, DiversyFund offers one type of investment: large, underperforming apartment buildings. Once the property is acquired, the building is repaired and upgraded, creating better rental opportunities at a higher price. This increases the revenue of the property, making it a profitable investment. Fundrise investments include multiple types of real estate properties. With higher investment amounts, investors have access to more lucrative types of investments. DiversyFund is great for people looking to invest in just one type of property. For more opportunities and features, Fundrise is the way to go.
FAQ’s About DiversyFund vs Fundrise
Can You Really Make Money with Fundrise?
Yes, Fundrise investors can profit from regular dividend payments as well as capital appreciation when properties are sold. It is definitely possible to make money with Fundrise.
Is DiversyFund a Good Investment?
For the right personal finance situation, DiversyFund can be a great investment platform for someone. Since there are no withdrawals allowed, investors should have an investment horizon of five or more years.
Can You Lose Money with DiversyFund?
Just as with every investment opportunity, there is risk involved with DiversyFund. You could lose your principal, simply based on the economy and property values, as well as each tenant’s ability to pay their rent.
Is DiversyFund a Legitimate Company?
DiversyFund is a legitimate company with positive ratings and reviews from users. They make investing in real estate easy for both new and seasoned investors.
Is Fundrise a Legitimate Company?
With a host of happy users and years of experience and longevity, Fundrise is definitely a legitimate company. Invest with peace of mind through Fundrise.
Which is Better: DiversyFund vs Fundrise?
Both DiversyFund and Fundrise make it simple for just about anyone who qualifies to invest – no need to be an accredited investor. As hassle-free real estate investing platforms, they are both great for building wealth and learning about investing in real estate. While both options can end up great from investing, Fundrise provides ease, accessibility, and a number of features for investors. Always be sure to do your own due diligence before taking advantage of either real estate platform, but based on our review of DiversyFund vs Fundrise, we believe Fundrise is a great way to get started investing.
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