DiversyFund vs CrowdStreet 2024: Which real estate app is better?

Jeremy Biberdorf
By: Jeremy Biberdorf
 

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In today’s thriving real estate investment landscape, choosing the right platform can be crucial to your success. Two of the leading contenders in this space are DiversyFund and CrowdStreet, both offering unique and powerful opportunities for investors to capitalize on.

DiversyFund is better for:CrowdStreet is better for:
Passive investors looking for hands-off approachAccredited investors with experience
Real estate investment trusts (REITs)Commercial real estate investments
Lower minimum investmentsHigher minimum investments
Long-term investorsShort-term or medium-term investors

In this article, we’ll be delving deep into the world of these two titans, comparing and contrasting their products across three essential factors: investment offerings, fees, and platform accessibility. Our goal is to provide you with a comprehensive understanding of the key differences between DiversyFund and CrowdStreet, ultimately empowering you to make an informed decision about which platform best aligns with your investment goals and strategies.

DiversyFund CrowdStreet
Investor Type Any Accredited
Investment Types Real estate investment trusts (REITs) Commercial real estate, single-tenant, funds
Fees No management fees, only charging 2% acquisition fee and 0.5% disposition fee 0.5-2% placement fee, 1-2% annual management fee
Minimum Investment $500 $25,000
Investment Horizon Long-term Short-term or medium-term
Current Promotion

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Factor 1: Investment Offerings

DiversyFund: Focused on Diversified Real Estate Funds

  • DiversyFund offers a proprietary Growth REIT
  • The platform is designed for long-term, passive investing
  • CrowdStreet: Diverse Commercial Real Estate Opportunities
  • CrowdStreet features a wide range of individual properties and funds
  • The platform caters to both active and passive investors

DiversyFund

diversyfund.com website

DiversyFund is a real estate investment platform that focuses on providing diversified real estate funds to investors. Their proprietary Growth REIT (Real Estate Investment Trust) invests primarily in multifamily properties, with the aim of generating consistent income and long-term appreciation.

The platform is designed for investors seeking a long-term, passive investment strategy, as it takes care of property acquisition, management, and eventual sale. By pooling investors’ capital into a single fund, DiversyFund offers access to large-scale, institutional-quality real estate investments that might otherwise be out of reach for individual investors.

CrowdStreet

crowdstreet.com website

CrowdStreet, on the other hand, offers a diverse range of commercial real estate investment opportunities, including individual properties, funds, and tailored portfolios. The platform features various property types such as multifamily, retail, office, and industrial, as well as different investment strategies like value-add, opportunistic, and core-plus.

This wide selection caters to both active and passive investors, providing options for those who prefer to handpick individual deals or invest in diversified funds. CrowdStreet’s marketplace model allows investors to directly connect with sponsors, offering a high level of transparency and giving investors more control over their investment choices.

Factor 2: Fees and Costs

DiversyFund: No Management Fees for Investors

  • DiversyFund eliminates middlemen, reducing fees
  • The platform earns through project-level fees
  • CrowdStreet: Transparent Fee Structure Varies by Investment
  • CrowdStreet’s fees depend on the investment type
  • Sponsor fees and platform fees are clearly disclosed

DiversyFund

One of the major advantages of DiversyFund is their fee structure, as the platform charges no management fees for investors. By acting as both the sponsor and the manager of their Growth REIT, DiversyFund eliminates middlemen, which in turn reduces fees for investors.

Instead of charging investors directly, DiversyFund earns through project-level fees such as acquisition, asset management, and disposition fees. This unique fee structure allows investors to keep more of their returns and aligns the interests of DiversyFund with those of their investors.

CrowdStreet

CrowdStreet, meanwhile, offers a transparent fee structure that varies depending on the investment type. For individual property investments, fees are primarily charged by the project sponsor and can include acquisition, asset management, and performance fees. These fees are clearly disclosed in each investment’s offering materials, allowing investors to make informed decisions.

For funds and tailored portfolios, CrowdStreet charges a platform fee, which is typically a percentage of the invested capital, ranging from 0.25% to 2.5% per year. While the fee structure may be more complex compared to DiversyFund, CrowdStreet’s transparency ensures that investors are aware of the costs associated with each investment opportunity.

Factor 3: Platform Accessibility and Minimum Investment

DiversyFund: Lower Minimum Investment and Open to Non-Accredited Investors

  • DiversyFund has a $500 minimum investment requirement
  • CrowdStreet: Higher Minimum Investment and Primarily for Accredited Investors
  • CrowdStreet’s minimum investment typically starts at $25,000

DiversyFund

DiversyFund is known for its accessibility to a wide range of investors. With a minimum investment requirement of just $500, the platform provides an affordable entry point for those looking to diversify their portfolio with real estate investments.

Additionally, DiversyFund welcomes both accredited and non-accredited investors, further democratizing access to real estate investment opportunities that were once reserved for wealthy individuals and institutional investors.

CrowdStreet

In contrast, CrowdStreet’s platform is primarily geared toward accredited investors, with a higher minimum investment requirement that typically starts at $25,000. This higher threshold reflects the platform’s focus on larger-scale commercial real estate projects and funds, which can offer potentially higher returns but may also require more substantial capital commitments.

While CrowdStreet does offer some investment opportunities for non-accredited investors through certain funds and REITs, the majority of their offerings are tailored for accredited investors seeking to actively invest in individual properties or diversified funds.

DiversyFund vs. CrowdStreet: Our Summary

After carefully analyzing DiversyFund and CrowdStreet across three essential factors – investment offerings, fees, and platform accessibility – our conclusion leans in favor of CrowdStreet as the winner for investors looking to maximize their real estate investment opportunities.

While DiversyFund does have its strengths, particularly in offering an affordable and passive approach to real estate investing, CrowdStreet’s diverse range of commercial real estate opportunities and transparent fee structure sets it apart. The platform caters to both active and passive investors, providing access to various property types and investment strategies that can accommodate different risk appetites and financial goals.

CrowdStreet’s focus on larger-scale commercial projects and funds is another winning factor, as it offers potentially higher returns for those willing to commit more substantial capital. Additionally, the platform’s transparent fee structure ensures that investors are well-informed about the costs associated with each investment opportunity.

Although CrowdStreet is primarily geared towards accredited investors, it does offer limited options for non-accredited investors, demonstrating a commitment to expanding access to real estate investment opportunities. The higher minimum investment requirement of $25,000 may be a barrier for some, but for those who can meet this threshold, CrowdStreet presents an unparalleled selection of commercial real estate investments.

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Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He’s a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.