Real estate investing has gone from traditional practices to the emergence of online real estate investment platforms that make it easier and more accessible for individual investors to participate in the market. Realty Mogul and Fundrise are two of the most innovative and popular real estate crowdfunding platforms that offer investors the opportunity to build a diversified portfolio comprising alternative investments like crowdfunded real estate deals and commercial real estate investments. But how do these two platforms compare and which one is right for you? In this article, we will review the pros and cons of each platform and help you decide which one suits your investment goals and preferences.

Overview of RealtyMogul vs Fundrise

Realty Mogul and Fundrise are both online platforms that allow individuals to buy into investment properties with lower minimum investment requirements compared to traditional real estate investments. However, they have some key differences in terms of the types of investments they offer, the level of control they give to investors, and the fees they charge.

Realty Mogul offers a wider variety of investment options, including commercial properties, multifamily apartments, single-family rental properties, and private real estate investment trusts (REITs). Investors can choose to invest in individual properties, diversified real estate portfolios, or crowdfunded real estate projects. Realty Mogul also provides access to institutional-quality properties that are typically reserved for large investors. Realty Mogul offers a more hands-on approach, allowing investors to choose specific properties to invest in, based on their own research and due diligence.

Fundrise primarily focuses on residential properties, such as single-family homes, townhouses, and apartments. Investors can choose from a variety of investment options, including eREITs and eFunds, which are online versions of REITs and private equity funds that invest in real estate. Fundrise also offers fractional real estate investments, which allow investors to buy a small share of a property. Fundrise uses a more passive investment model, with pre-selected portfolios that match different risk and return profiles. Investors can also customize their portfolios by choosing from different investment themes, such as income, growth, or balanced.

Pros and Cons for Each Platform

Both Realty Mogul and Fundrise have their own advantages and disadvantages, depending on your investment goals, preferences, and risk tolerance. Here are some of the pros and cons for each platform:

Pros for Realty Mogul:

  • Offers a wide range of real estate investment options, from single-property investments to diversified portfolios.
  • Provides access to institutional-quality properties that are vetted by experienced real estate professionals.
  • Offers competitive returns and potential for diversification, with an average return of 12% over the last 5 years.
  • Provides transparency and detailed information on investment opportunities, including property location, financial performance, tenant profile, and exit strategy.

Cons for Realty Mogul:

  • Requires a relatively high initial investment amount of $5,000, plus a one-time account setup fee of $1,000.
  • Limited liquidity as real estate investments are typically long-term and illiquid, meaning you may not be able to sell your shares easily or quickly.
  • Potential risk associated with real estate market fluctuations, property management issues, tenant defaults, and environmental hazards.
  • Fees and expenses may reduce overall returns, such as asset management fees, servicing fees, acquisition fees, and disposition fees.

Pros for Fundrise:

  • Offers low minimum investment amounts of $500, making it more accessible and affordable for beginner investors.
  • Provides access to a diversified portfolio of real estate investments, with different risk and return profiles, such as income, growth, or balanced.
  • Offers a variety of investment options, including eREITs and eFunds, which are online versions of REITs and private equity funds that invest in real estate.
  • Provides regular dividends and potential for long-term capital appreciation, with an average annual return of 8.76% over the last 5 years.

Cons for Fundrise:

  • Limited liquidity as real estate investments are typically long-term and illiquid, meaning you may not be able to sell your shares easily or quickly.
  • May have limited investment opportunities compared to traditional real estate investing, as you cannot choose specific properties to invest in, but rather rely on Fundrise’s portfolio selection and management.
  • Fees and expenses may reduce overall returns, such as service fees, advisory fees, origination fees, and development fees.
  • Potential risk associated with real estate market fluctuations, property management issues, tenant defaults, and environmental hazards.

RealtyMogul Review

Realty Mogul is a leading real estate investing platform that allows investors to purchase shares in commercial and residential real estate projects. The platform offers access to exclusive capital from private lenders and institutional partners, as well as comprehensive market research and data to help investors make informed decisions. Investors can choose from a wide range of private real estate investment opportunities, including single-property investments, joint venture and partnership investments, apartment buildings, and equity crowdfunding deals.

RealtyMogul

Accredited and Non-Accredited Investors

Realty Mogul restricts investment opportunities to accredited investors who meet specific financial criteria, such as having a net worth of at least $1 million or an annual income of at least $200,000. Accredited investors on Realty Mogul can choose to invest in individual properties, diversified real estate portfolios, or crowdfunded real estate projects. Non-accredited investors can only invest in public, non-traded REITs, which are pooled funds that invest in a portfolio of properties.

Types of Investments Available

Realty Mogul offers a wide range of real estate investment options, from single-property investments to diversified portfolios. Some of the types of investments available on Realty Mogul are:

  • Commercial properties: These are properties that are used for business purposes, such as office buildings, retail centers, hotels, and industrial warehouses. Commercial properties typically offer higher returns and longer lease terms than residential properties, but they may also have higher vacancy rates and maintenance costs.
  • Multifamily apartments: These are properties that consist of multiple residential units, such as apartment buildings, condominiums, and townhouses. Multifamily apartments typically offer steady cash flow and lower vacancy rates than single-family homes, but they may also have higher management fees and tenant turnover rates.
  • Single-family rental properties: These are properties that are rented out to individual tenants, such as single-family homes, duplexes, and triplexes. Single-family rental properties typically offer lower returns and shorter lease terms than commercial properties, but they may also have lower maintenance costs and higher appreciation potential.
  • Private REITs: These are pooled funds that invest in a portfolio of properties, either directly or through debt or equity securities. Private REITs typically offer diversification and tax benefits, but they may also have limited liquidity and transparency.

Minimum Investment Requirement

Realty Mogul has a minimum investment requirement of $5,000 for most of its investment options. Investors must also pay a one-time account setup fee of $1,000, which covers the cost of verifying their accreditation status and setting up their account. Some investment options may have higher minimum investment requirements, depending on the size and type of the property.

Annual Asset Management Fee

Realty Mogul charges an annual asset management fee of 1.00% - 1.25% on all investments made on their platform. This fee covers various costs such as asset management, due diligence, servicing, and operations. The fee is deducted from the distributions paid to investors, and it may vary depending on the type and performance of the investment.

Risk Tolerance Considerations

Realty Mogul and Fundrise both provide access to real estate investments, but the level of risk associated with these investments may vary. Investors should assess their own risk tolerance and choose investments accordingly. Some of the factors that may affect the risk level of real estate investments are:

  • Property type: Different types of properties may have different levels of risk, depending on factors such as location, demand, supply, competition, and economic conditions. For example, commercial properties may have higher risk than residential properties, as they are more sensitive to market cycles and business trends.
  • Investment structure: Different types of investment structures may have different levels of risk, depending on factors such as leverage, ownership, and cash flow. For example, equity investments may have higher risk than debt investments, as they are more exposed to the performance and value of the property.
  • Investment duration: Different types of investment durations may have different levels of risk, depending on factors such as liquidity, exit strategy, and market timing. For example, short-term investments may have higher risk than long-term investments, as they are more vulnerable to market fluctuations and interest rate changes.

Returns on Investments

Realty Mogul has a strong track record of delivering competitive returns to its investors, with an average return of 12% over the last 5 years. The platform also provides regular distributions to its investors, either monthly or quarterly, depending on the type of investment. The returns on investments may vary depending on factors such as property performance, market conditions, fees, and expenses.

Fundrise Review

Fundrise is a pioneer in online real estate investing, offering investors the opportunity to invest in real estate with as little as $500. The platform provides access to a diversified portfolio of real estate investments, with different risk and return profiles, such as income, growth, or balanced. The platform also offers a variety of investment options, including eREITs and eFunds, which are online versions of REITs and private equity funds that invest in real estate.

Fundrise

Accredited and Non-Accredited Investors

Fundrise is open to both accredited and non-accredited investors, with a low minimum investment amount of $500. The platform does not require any accreditation verification or account setup fees. The platform allows investors to invest in real estate with a simple and user-friendly interface, without any hassle or paperwork.

Types of Investments Available

Fundrise provides more diverse portfolio options than Realty Mogul, including eREITs and fractional real estate investments, allowing investors to diversify and spread their risk across multiple assets or real estate properties. Some of the types of investments available on Fundrise are:

  • eREITs: These are online versions of REITs that invest in a portfolio of properties, either directly or through debt or equity securities. eREITs typically offer diversification and tax benefits, but they may also have limited liquidity and transparency.
  • eFunds: These are online versions of private equity funds that invest in a portfolio of properties, either directly or through development projects. eFunds typically offer higher returns and appreciation potential, but they may also have higher risk and fees.
  • Fractional real estate investments: These are investments that allow investors to buy a small share of a property, such as a single-family home, a townhouse, or an apartment. Fractional real estate investments typically offer lower minimum investment amounts and higher liquidity, but they may also have lower returns and less control.

Minimum Investment Requirement

Fundrise has a much lower minimum investment requirement than Realty Mogul, making it more accessible and affordable for beginner investors. The platform allows investors to invest in real estate with as little as $500, depending on the type of investment. Some investment options may have higher minimum investment requirements, depending on the size and type of the property.

Annual Asset Management Fee

Fundrise does not charge an asset management fee for its services, unlike Realty Mogul. However, the platform does charge service and advisory fees, which are annual fees that range from 0.15% to 0.85%, depending on the type and size of the investment. The service fee covers administrative costs associated with managing the platform and the investments, while the advisory fee covers the costs of providing investment advice and guidance to investors. The fees are deducted from the distributions paid to investors, and they may vary depending on the type and performance of the investment.

Risk Tolerance Considerations

Fundrise investments include fractional real estate deals for as little as $500, meaning investors can spread their risk across multiple assets or real estate properties. The platform also offers short-term investments such as real estate debt and preferred equity notes that are not available on Realty Mogul. While these instruments may offer higher returns, they also come with a higher level of risk. Investors should consider their own risk tolerance and choose investments accordingly. Some of the factors that may affect the risk level of real estate investments are:

  • Property type: Different types of properties may have different levels of risk, depending on factors such as location, demand, supply, competition, and economic conditions. For example, residential properties may have lower risk than commercial properties, as they are more stable and less volatile.
  • Investment structure: Different types of investment structures may have different levels of risk, depending on factors such as leverage, ownership, and cash flow. For example, debt investments may have lower risk than equity investments, as they have a fixed interest rate and a senior claim on the property’s income and value.
  • Investment duration: Different types of investment durations may have different levels of risk, depending on factors such as liquidity, exit strategy, and market timing. For example, long-term investments may have lower risk than short-term investments, as they have more time to recover from market downturns and benefit from market uptrends.

Returns on Investments

Fundrise has achieved success in providing investors with solid returns, with its portfolio of eREITs and eFunds generating an average annual return of 8.76% over the last 5 years. The platform also provides regular dividends to its investors, either quarterly or annually, depending on the type of investment. The returns on investments may vary depending on factors such as property performance, market conditions, fees, and expenses.

Fundrise vs RealtyMogul: Which One is Right for You?

Both Realty Mogul and Fundrise offer access to real estate investments with varying levels of risk and return, but they may suit different types of investors depending on their goals, preferences, and budget. Here are some of the factors that may help you decide which one is right for you:

  • For non-accredited investors: Fundrise may be the best option, as it allows you to unlock diverse investment opportunities with no accreditation required and a very low minimum investment amount of $500.
  • For accredited investors: You may want to consider the types of assets you are interested in, such as commercial properties, multifamily apartments, single-family rental properties, REITs, etc. You may also want to explore the unique offerings of each platform, such as eREITs and eFunds on Fundrise, and crowdfunded real estate projects on Realty Mogul. You may also want to compare the fee structure of both platforms and the returns they offer, as well as the distributions frequency and requirements.
  • For beginners and new investors: Fundrise is probably the easiest and most convenient option, as it offers a simple and user-friendly interface, low minimum investment amounts, and pre-selected portfolios that match your risk and return profile.
  • For advanced and experienced investors: Realty Mogul may offer more options and flexibility, as it offers a wider range of real estate investment options, more control and transparency over your investments, and access to institutional-quality properties.

Using Kubera to Manage All of Your Investments

Whether you choose Realty Mogul, Fundrise, or both, you may want to use a tool that can help you track and manage all of your investments in one place. Kubera is a powerful and easy-to-use tool that simplifies the seemingly complex process of tracking and managing diversified investment portfolios.

Kubera - user interface

Kubera can automatically track your bank and investment accounts, cryptocurrency wallets, real estate, private equity, and more. Kubera can also provide you with real-time portfolio value, investment performance analysis, robust reports, and aggregated financial data.

Kubera offers comprehensive tools to monitor investment performance, track net worth, and facilitate financial planning through scenario modeling, empowering you to make well-informed decisions for your financial future.

You can sign up for a trial of Kubera and see how it can empower your investment decision making.