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Fundrise vs. PeerStreet

Published by Salvador Briggman. Find him on Twitter.

Fundrise and PeerStreet are two rapidly growing real estate crowdfunding platforms.

You can use these websites to invest in real estate online or get financing for your real estate property.

As I talked about in my book, Real Estate Crowdfunding Explained, this is absolutely the best time to enter this industry. Real estate financing is ripe for disruption.

If you haven’t heard of this term before, go and check out my other blog post.

While both Fundrise and PeerStreet are in the real estate crowdfunding industry, their platforms have some substantial differences.

In this blog post, I’m going to be comparing these two platforms and ultimately help you determine which is the best choice for your investing needs.

Fundrise

Fundrise has grown and changed a lot in recent years. They’ve shifted away from the traditional model of real estate crowdfunding to a REIT-focused model, where investments are offered on their platform to the general public through Regulation A+ of the jobs act.

At the time of writing, over $100 million has been invested on their platform in the form of their various eREITs. This totals over 70 individual real estate investments with $19.2 million in cumulative net returns to date. You can also see the average annualized returns below.

An eREIT is different from a publicly traded REIT. Not only will you be investing in private¬†offerings, but you’ll also take advantage of technology cost savings.

Compared with other types of investments out there, you’re likely to get a great return.

Now, Fundrise has made it even simpler to invest on their platform. You can choose from supplemental income, balanced investing, and long-term growth programs.

These various funds will tailor the risk/reward element in your portfolio to give you maximum returns at a comfortable level of risk.

PeerStreet

PeerStreet was founded in 2013 as a new way to invest in high-yield real estate loans online. Think Lending Club, but for real estate!

You can only invest in real estate debt on PeerStreet, differentiating it from Fundrise. In addition, real estate debt is senior to the borrower’s equity, meaning that it’s going to be less risky than traditional equity investments.

These loans are typically short in duration (6-24 months) and offer 6-12% annualized returns.

Unlike Fundrise, you can only invest on PeerStreet if you are an accredited investor. This means that these loans are reserved for high-net worth individuals, funds, and institutional investors.

One of the things I like about PeerStreet is the automated investing service. It takes the headache out of curating your own investment portfolio.

Finally, both Fundrise and PeerStreet have a minimum investment amount of $1,000 at the time of writing.

Which is Better?

As you can see, neither one is “better,” they are just different. They cater to different types of investors with different risk tolerances.

If you’re an accredited investor and more conservative, you’re going to be more likely to gravitate towards PeerStreet.

If you’re a retail investor and you want to invest in a private REIT that then invests in properties, then you’re going to gravitate towards Fundrise.

Either way, I think it pays to learn a little bit about each platform. This is a really new industry and it’s completely disrupting traditional methods of real estate financing.

If you do nothing else, take a look at my video which goes through how to make money in this new industry. It’s a complete breakdown of what you need to know before you start investing or getting funding for a property.

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