Fundrise vs PeerStreet 2024: Which real estate platform is better?

Jeremy Biberdorf
By: Jeremy Biberdorf
 

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In the dynamic world of real estate investing, investors are constantly seeking innovative platforms that not only offer attractive returns, but also provide accessibility, transparency, and diversification.

Fundrise is Better for:PeerStreet is Better for:
More diversified portfolio of real estate assetsDebt-based investments in real estate
Liquidity and flexibility with no fees for early redemptionLonger investment terms with fees for early redemption
Investors who prefer a more hands-off approach to real estate investingInvestors looking for more control over the specific loans they invest in

Two such platforms, Fundrise and PeerStreet, have emerged as frontrunners in the rapidly evolving landscape of online real estate investing. This article provides an in-depth comparison of these two platforms, analyzing their offerings based on three critical factors: investment opportunities, fee structures, and overall user experience.

Fundrise PeerStreet
Minimum Investment $10 (Starter Portfolio) $1,000 (Individual Loans)
Investment Options eREITs, eFunds, Individual property projects Real estate-backed loans, Property investments
Fees 0.15% Annual Investment Advisory Fee, 0.85% Annual Asset Management Fee 0.25%-1% Servicing Fee (varies by investment)
Customer Service Phone, Email, FAQ, Help Center Phone, Email, FAQ, Help Center
Current Promotions

More Info

More Info

Modest Money Overall Rating
4.5 rating based on 5 ratings
4.0 rating based on 5 ratings
Fundrise
Minimum Investment $10 (Starter Portfolio)
Investment Options eREITs, eFunds, Individual property projects
Fees 0.15% Annual Investment Advisory Fee, 0.85% Annual Asset Management Fee
Customer Service Phone, Email, FAQ, Help Center
Current Promotions

More Info

Modest Money Overall Rating
4.5 rating based on 5 ratings
PeerStreet
Minimum Investment $1,000 (Individual Loans)
Investment Options Real estate-backed loans, Property investments
Fees 0.25%-1% Servicing Fee (varies by investment)
Customer Service Phone, Email, FAQ, Help Center
Current Promotions

More Info

Modest Money Overall Rating
4.0 rating based on 5 ratings

Factor 1: Investment Offerings

Fundrise: Democratizing Real Estate Investing for All

  • Fundrise emphasizes a diverse range of real estate investment options
  • Lower minimum investments make it accessible to non-accredited investors
  • PeerStreet: Specializing in Real Estate-Backed Loans
  • PeerStreet focuses on short-term, high-yield debt investments secured by real estate

Fundrise

Fundrise is a real estate crowdfunding platform that aims to democratize real estate investing by offering a diverse range of investment options to both accredited and non-accredited investors. With lower minimum investments, starting at just $10, the platform allows individuals to participate in the real estate market and build diversified portfolios by investing in eREITs (electronic Real Estate Investment Trusts) and eFunds (electronic Real Estate Funds).

These investment vehicles give investors exposure to various types of properties, including residential, commercial, and industrial real estate assets. Fundrise also offers a range of investment strategies, including growth, income, and balanced portfolios, to meet different investor needs and preferences.

PeerStreet

PeerStreet is a real estate investment platform that specializes in offering short-term, high-yield debt investments secured by real estate, primarily in the form of first-lien mortgages. The platform caters mainly to accredited investors, providing them with the opportunity to invest in loans backed by various types of properties, such as single-family residences, multifamily properties, and commercial buildings.

With its proprietary technology and rigorous underwriting process, PeerStreet aims to provide investors with access to high-quality real estate debt investments that offer attractive returns relative to other fixed-income securities. The platform also offers a user-friendly interface and tools to help investors track their investments and monitor their portfolios.

Factor 2: Fee Structures

Fundrise: Transparent and Straightforward Fee Model

  • Fundrise charges a simple annual asset management fee
  • PeerStreet: Loan-Servicing Fees and Potential Performance Fees
  • PeerStreet utilizes a servicing fee model with potential performance-based fees

Fundrise

Fundrise prides itself on offering a transparent and straightforward fee model for its investors. The platform charges an annual asset management fee of 1% on the total investment amount. This fee covers the cost of managing and operating the real estate properties within the eREITs and eFunds, and it is automatically deducted from the returns generated by the investments.

Fundrise does not charge any additional fees for transactions, such as buying or selling shares, which makes the platform’s fee structure easy to understand and assess for investors.

PeerStreet

PeerStreet’s fee structure is slightly more complex, as it mainly revolves around loan-servicing fees. These fees are typically based on the interest rate spread between what the borrower pays and what the investor receives. The spread can vary depending on the loan, but it usually ranges from 0.25% to 1%. In addition to the loan-servicing fees, PeerStreet may also charge performance-based fees on certain investments.

These fees are contingent upon the investment’s success and are designed to align the interests of the platform and its investors. While this fee structure may be more difficult to navigate compared to Fundrise’s, it allows investors to potentially earn higher returns if the investments perform well. PeerStreet’s fee model is disclosed upfront and is easily accessible on the platform’s website, enabling investors to make informed decisions about their investments.

While PeerStreet’s fee structure may be more complex, it provides investors with the potential for higher returns and a greater alignment of interests between the platform and its investors.

Factor 3: User Experience

Fundrise: Intuitive Platform with a Focus on Accessibility

  • Fundrise offers user-friendly tools and educational resources for investors
  • PeerStreet: Advanced Platform Tailored to Experienced Investors
  • PeerStreet provides in-depth investment analysis and due diligence tools for savvy investors

Fundrise

Fundrise has designed its platform with a focus on accessibility, ensuring that investors of all experience levels can easily navigate and utilize its features. The user interface is clean and intuitive, making it simple for investors to browse investment options, review property details, and monitor their portfolios.

In addition to its user-friendly design, Fundrise also offers a wealth of educational resources, such as articles, videos, and webinars, to help investors learn more about real estate investing and make informed decisions. This emphasis on education and simplicity makes Fundrise an ideal choice for both novice and experienced investors seeking a hassle-free real estate investment experience.

PeerStreet

PeerStreet, on the other hand, is tailored more towards experienced investors who are well-versed in real estate investing and are seeking a platform with advanced features and in-depth analysis. The platform offers detailed information on each loan, including property valuation, borrower credit history, and loan-to-value ratios. Investors can also access PeerStreet’s proprietary underwriting and due diligence tools to further analyze and assess the risk associated with each investment.

While this level of detail and sophistication may be overwhelming for some, it is well-suited for savvy investors who want granular control and insight into their real estate investments.

Fundrise vs PeerStreet: Our Summary

The choice between Fundrise and PeerStreet ultimately depends on an investor’s preferences, financial goals, and experience level. Fundrise shines in its mission to democratize real estate investing, offering a diverse range of investment options and low minimum investments, making it an ideal platform for both accredited and non-accredited investors. Its transparent fee structure and user-friendly platform design further enhance its appeal for investors seeking a simple and accessible real estate investing experience.

PeerStreet, in contrast, caters primarily to accredited investors and focuses on real estate-backed loans, offering short-term, high-yield debt investments. Its fee structure, which is based on loan-servicing fees and potential performance fees, can be more complex than Fundrise’s but aligns with the platform’s focus on sophisticated investors. PeerStreet’s advanced features and in-depth investment analysis tools make it a strong choice for experienced investors who desire granular control and insight into their investments.

Fundrise is an excellent choice for investors who value accessibility, diversity, and simplicity in their real estate investing experience. PeerStreet, on the other hand, is better suited for seasoned investors seeking a more specialized platform with a focus on real estate-backed loans and advanced analysis tools.

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