DiversyFund vs. Fundrise: Which One’s Better for Real Estate Investing?

DiversyFund vs. Fundrise

DiversyFund and Fundrise are part of the growth of crowdfunded real estate platforms. These platforms seek to democratize real estate investing by offering the average investor access with a low minimum investment.

Although DiversyFund and Fundrise have a lot of similarities, there are distinct differences as well. This table helps to compare the two companies.

Minimum investment requirement	$500 monthly	$10
Annual fees	2% asset management fee Up to 10% organization and offering expense reimbursement fee	0.15% advisory fee 0.85% to 1.85% management fee
Available assets	Multifamily properties	Multifamily properties Single-family properties Industrial properties Private equity in tech companies
Available account types	Individual account Joint account Custodian account Trust account Entity account	Individual account Joint account Entity account Trust account Individual retirement account (IRA)
Holding period	At least five years	At least five years
Withdrawals allowed	Not allowed	Allowed during the 90-day introduction period with a 1% penalty 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 Valid U.S. entities Investors must be 18 or older	U.S. citizens U.S. residents Valid U.S. entities Investors must be 18 or older
Accredited Investor required?	No	No
Best for...	Long-term investors who want to invest in real estate without conducting individual property research.	Long-term investors who want the option to invest in advanced real estate strategies.
	Visit DiversyFund	Visit Fundrise

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DiversyFund: What it is and how it works

DiversyFund is a real estate investing platform that invests in apartment buildings and multifamily properties via real estate investment trusts (REITs).

The company's growth REIT acquires multifamily apartment buildings that are likely to offer good growth opportunities. These properties may need improvements to increase their cash flow. As the rental income increases, the building's value should increase as well.

Income from these properties is reinvested monthly to finance improvements until the asset is sold. When properties are sold, the accumulated dividends and capital appreciation are distributed to investors. At that time, you can cash out or reinvest with DiversyFund.

Who can open a DiversyFund account?

Non-accredited investors can invest with DiversyFund, and the platform is open to U.S. citizens and residents. Additionally, DiversyFund allows valid U.S. entities operated by non-U.S. persons to open accounts.

How to get started with DiversyFund

To get started with DiversyFund, you’ll need to create an account and choose your investment level. You’ll need to provide an email and password as well as have your personal information on hand, such as your Social Security number.

Diversyfund offers three different packages:

• Gold key: Invest starting at $500 monthly
• Silver key: $25,000 one-time investment
• Platinum key: $100,000 one-time investment

I want to emphasize that the $500 minimum is a monthly investment, not a one-time investment, so keep that in mind when you sign up. You’re committing to locking up these funds for the long term, and you won’t be able to cash out if you feel like you’re not seeing the performance you expected. DiversyFund notes in its offering circular that it expects to hold investor funds in a REIT for at least five to seven years before liquidating and distributing returns to investors.

The DiversyFund website does not offer an FAQ or resource library for potential and current investors. If you have questions or need help with your account, you’ll need to contact DiversyFund via an online contact form.

Also note that DiversyFund has been the subject of lawsuits and regulatory actions regarding the way they represent their investment opportunities.

Read our DiversyFund review to learn more.

Fundrise: What it is and how it works

When you invest with Fundrise, your funds are put into diversified investments known as eREITs and eFunds, both of which are professionally managed portfolios.

Fundrise investments include single-family residences, apartment buildings, and commercial properties. It also invests in private equity funds that focus on tech companies.

Fundrise offers four investment plans for investors based on their goals and other preferences. These four plans are:

• Long-term growth: This plan focuses on long-term investment goals. Fundrise states that it may not produce much revenue in the short term, but may produce higher returns over the long term.
• Balanced investing: This plan focuses on maintaining a balanced investment approach. Fundrise states that this plan may produce low returns in its early years with a potential for higher returns later on.
• Supplemental income: This plan focuses on producing the most consistent returns. Fundrise states that it may offer lower total returns over the lifetime of the investment.
• Venture capital: This plan allows you to invest in tech companies prior to their initial public offering, with the expectation that the value will appreciate long-term.

Fundrise also offers the option to build your own investment plan by subscribing to Fundrise Pro for $10 a month.

Who can open a Fundrise account?

Investing with Fundrise is open to any U.S. citizen or permanent resident currently residing in the U.S. However, you must be 18 years or older.

Fundrise offers individual, joint, trust, and IRA accounts. Additionally, legal U.S. businesses and other U.S. entities may open a Fundrise account.

How to get started with Fundrise

To get started with Fundrise, you’ll need to provide an email and personal information. You’ll also need to indicate your investment experience and choose your goal for investing with Fundrise. You’ll then be asked your time horizon for your investments and how much you plan to invest with Fundrise each year.

Based on the answers you provide, you'll receive a suggested investment plan from Fundrise. However, you can change your selection. From there, you’ll fund your investment and manage your account from the Fundrise dashboard.

The Fundrise website offers an extensive catalog of support articles if you need help. This should make it easy to find answers to the questions you have, but if not, you can also send a message via an online contact form.

Read our Fundrise review for more information.

3 important differences between DiversyFund and Fundrise

DiversyFund and Fundrise have many similarities, but there are three important differences that you should know about when deciding between the two platforms.

1. Number and type of features available

DiversyFund offers a simple real estate investing platform. No matter the size of your investment balance, you'll receive the same set of features and have access to the same real estate projects. Investors can track their accounts online or through a mobile app.

Fundrise provides investors with more options, depending on your investment approach and goals. It has a very low minimum investment amount of $10. With four investment plans to choose from, Fundrise can be an attractive option for a broad spectrum of investors. The in-app news feed keeps investors up to date on individual investments as well as new assets added to the real estate portfolio.

Winner: Fundrise. If you’re looking for a real estate investing platform that provides more options and support, Fundrise may be better for you. For those looking for a real estate investment opportunity that has fewer choices, DiversyFund may be better for you.

2. Amount and structure of fees

DiversyFund charges a 2% asset management fee. It also charges up to 10% in the organization and offering expense fees that cover various costs.

Fundrise charges a 0.15% annual advisory fee. It also charges between 0.85% and 1.85% in annual management fees.

Winner: Fundrise because of its lower fees.

3. Number and types of investments available

DiversyFund specializes in apartment buildings. It seeks out apartment complexes that have good growth potential. After the acquisition, DiversyFund may perform renovations to attract more tenants and increase the rent prices. The combination of these two factors may increase the revenue it generates from the properties.

Fundrise invests in a broad selection of real estate properties, including commercial real estate, apartment complexes, and single-family homes. Additionally, it also gives access to private equity investments in tech companies.

Winner: Tie. If you want a simple core portfolio that is focused on one type of investment property, DiversyFund might be better for you. If you want to invest in a variety of real estate properties and have access to more advanced strategies, then Fundrise may be the better investment platform for you.

Which should you choose?

If you are investing money and choosing between DiversyFund vs. Fundrise, you should keep in mind that Fundrise is the option with a track record of success and more established systems in place.

You can start with DiversyFund with an initial investment of $500 monthly or $25,000 one time, and with Fundrise you can start for just $10. However, Fundrise is the only one that provides investors access to various investment strategies. DiversyFund doesn't provide various investment plans; all investors are investing in the same assets.

Fundrise invests in various types of real estate, including commercial and residential properties. For investors who prefer a singular focus on apartment buildings, then DiversyFund may be the right choice.

FAQs

Bottom line

With the rise of crowdfunding platforms, aspiring real estate investors can now more easily add diversification to their portfolios without a large investment and without taking on debt. You can even invest in real estate without buying property. Real estate can now be a part of just about anybody's personal finance plan and long-term investment strategy.

As with the stock market, private REITs carry investment risk and the potential for loss, so you should always do your due diligence before deciding where to put your money. These investments also have limited liquidity. But online real estate investing platforms like DiversyFund and Fundrise can help take the hassle out of investing through technology and professional management.

If you’re looking to build wealth and you're investigating how to invest in real estate, it could be worth your time to get to know both these platforms and decide if one of them might be a good component of your alternative investment portfolio.

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