Real estate investing is a tried and true way to build wealth. Still, you may not want all of the responsibilities and potential headaches of owning or managing property. Diversyfund, Realty Mogul, and Fundrise have become extremely popular with investors because they provide the benefits of rental income and appreciation without the drawbacks of being a landlord.
Although numerous real estate crowdfunding platforms are available, not all are equally suitable for first-time investors. Some are only available to accredited investors, while others have high minimum investment requirements, making them unattainable for many investors.
Fundrise and DiversyFund are the two options that are best suited for both new and experienced investors. Fundrise is one of the most well-known and popular real estate crowdfunding platforms. DiversyFund is not as well-known as it should be, but both investment platforms have a lot to offer.
These passive income tools can be a great way to get into real estate without making a significant investment or dealing with the hassles of managing a rental property. In this article, we will compare Fundrise and DiversyFund to help you make an informed decision.
Just getting started? Scroll down to learn more about the similarities and significant differences between Fundrise and DiversyFund. This table provides a quick comparison between the two companies.
| Criteria | DiversyFund
|
Fundrise |
| Minimum investment | $500 | $10 |
| Management fees | ● 2% asset management fee
● Up to 10% of equity dollars for expenses for marketing and fintech platform operations |
● 15% annual advisory fee
● 85% annual management fee
|
| Asset classes | ● Multifamily real estate
|
● Commercial real estate
● Residential real estate ● Private Equity
|
| Account types available | ● Individual account
● Joint account ● Trust account ● Entity account ● |
● Individual account
● Joint account ● Entity account ● Trust account ● Individual retirement account
|
| Holding period | ● At least five years
|
● At least five years
|
| Withdrawals allowed | ● Not allowed
|
● Yes, during the 90-day introductory period.
● Investors may request withdrawals, but they are not guaranteed. ● Withdrawals before five years may be subject to a penalty.
|
| Who can invest? | ● U.S. citizens
● U.S. residents ● Visa with valid Social Security number ● Valid U.S. entities operated by non-U.S. residents Investors must be 18 or older. ● |
● U.S. citizens
● U.S. permanent residents ● Investors must be 18 or older.
|
| Accredited Investor required? | No | No |
Fundrise vs. DiversyFund Summary
The main distinction between DiversyFund and Fundraiser is in their respective sizes and real estate portfolios. Fundrise has a much more extensive portfolio with a greater variety of property types and locations. DiversyFund’s portfolio is currently much smaller, with properties concentrated in a few key geographic areas.
Furthermore, Fundrise has a longer track record demonstrating its ability to generate excellent returns for investors. DiversyFund will likely need a few more years before it can be compared to other platforms.
The final significant difference is that Fundrise provides a variety of strategies from which investors can choose based on their specific goals and investment preferences. DiversyFund allows all investors to invest in the same portfolio.
DiversyFund Overview
DiversyFund is an investing platform that focuses on real estate investment, specifically apartment buildings with 100 or more units. The company’s real estate investment trust (REIT) strategy is based on the acquisition of undervalued multi-family units that generate rental income. Most of these apartments require significant investment to improve and increase their rental potential.
When the value of apartments rises, so does the value of the entire structure. This is also true for commercial properties such as offices and storage units. The rental income from these properties is reinvested each month to fund the various improvements until the property is sold for a healthy profit.
The capital appreciation and accumulated dividends are distributed to investors following the sale. The investors can then choose whether to cash out or continue to work with DiversyFund on future real estate projects.
DiversyFund – Invest $500 in Real Estate
Diversyfund provides public non-traded REITs to all US investors for as little as $500. Invest in a portfolio of apartment buildings with an annual target return of 10% to 20%.
Features:
- Hands-free real estate investment
- Potential for excellent returns
- Add diversification to your portfolio
- It’s available to all investors (not just accredited investors)
Pros:
- You can start investing with as little as $500
- Use a simple investing platform that provides a hands-off solution
- There are no annual management fees
Cons:
- No withdrawals are permitted;
- Investors are unable to select investments;
- Retirement accounts are not available.
Fundraiser Overview
When you invest with Fundrise, your money is invested in diversified investments known as eFunds and REITs. Both are professionally managed portfolios with investment opportunities such as apartment buildings, commercial properties, single-family homes, and private equity funds.
Upgrading your Fundrise account will give you access to more real estate investment opportunities. Fundrise provides five account tiers based on the sophistication and investment size. They are as follows: Starter, Basic, Core, Advanced, and Premium. Let’s examine each tier closely:
- Starter: A minimum of $10 is required. Because of the low entry point, this is an appealing option for people who want to grow their initial investment through auto-investing.
- Basic: This requires a minimum $1,000 investment, the investor can easily set goals, and they can invest in an IRA.
- Core: A minimum of $5,000 is required at this level. Three portfolio strategies are now available. They are Additional Income, Long-Term Growth, and Balanced Investing.
- Advanced: This tier requires a $10,000 minimum investment and allows you to allocate to specific funds and “Plus Plans.” Plus Plans use a portion of your portfolio to develop sophisticated strategies for additional growth.
- Premium: A $100,000 minimum investment is required to invest in certain private equity funds with tremendous growth potential but higher risks to manage.
Fundraise – Invest As Little As $10 in Real Estate
Fundrise is the simplest way to invest in an income-generating property portfolio. You’ll reap real estate owners’ benefits with passive, hands-off investment.
Features:
- Proven track record and historical performance
- Invest in a numerous portfolio of properties
- Receive quarterly dividends
- Simple platform
- Begin with as little as $10
Pros:
- Investing with as little as $10 is allowed
- There are five account levels based on account size and sophistication
- IRA accounts are available
- There is a longer track record of performance.
Cons:
- Advanced features necessitate a $10,000+ investment
- There is an early withdrawal penalty
- Annual fees of 1% apply.
Fundrise vs. DiversyFund Conclusion
As you can see, each platform caters to a different type of investor, making it difficult to say one is better than the other. DiversyFund is an excellent choice for long-term investors seeking only capital appreciation. Fundrise is the best option if you need a lot of investment flexibility and quick access to your funds.
