RealtyMogul vs. Fundrise: Which Real Estate Crowdfunding Platform Is Right For You?

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July 27, 2022
By: ADAM K
Skyscraper

Realty Mogul vs. Fundrise: At A Glance

FeaturesRealtyMogulFundrise
Minimum Investment$5,000 but the minimum amount can vary per investment$10
Fees1% for REITs, varies for individual properties1%/yr of AUM
Returns67 consecutive quarters of monthly returns across their Income REIT11.58% net of all fees across all clients
21 straight quarters of positive returns
Investment TypeCommercial Real Estate, Multifamily
Multifamily, Commercial REITs and funds, private equity
Retirement Account InvestingYesYes
Dividend ReinvestingYesYes
Open ToAccredited & Non-Accredited InvestorsAccredited & Non-Accredited Investors
Early Redemption OptionsYesYes
Mobile AppNoYes
Investor Goals & Planning ToolsNoYes
Current PromotionsNone listed$25-50 share referral bonus

What is Realty Mogul?

RealtyMogul is a real estate crowdfunding platform for accredited and non-accredited investors. RealtyMogul connects investors who want to invest in commercial real estate and create wealth through income or capital appreciation via REITs and private placements.

RealtyMogul launched in 2013. To date, 240,000 individuals signed up for the platform and invested over $915 Million, financing 400+ properties valued at over $4.7 Billion.

The founders of RealtyMogul are Jilliene Helman (current CEO and Georgetown alumna) and Justin Hughes.

The company is headquartered in Los Angles, California.

What is Fundrise?

Established in 2010, Fundrise is the oldest real estate crowdfunding platform. Fundrise offers people an alternative option to investing in real estate without the stress and costs of traditional real estate investing.

Fundrise boasts a wide variety of investment options and strategies, goal planning features, and a user-friendly investment dashboard.

More than 300,000 people use Fundrise today and have invested over $ 7 billion in properties throughout the U.S. Fundrise has had 21 consecutive quarters of returns, averaging 22.99% in 2021.

You can start investing in Fundrise’s Starter Portfolio with just $10.

Fundrise is based in Washington, DC, and was founded by Ben Miller who has over 20 years of experience in the real estate industry.

How Does Investing With Realty Mogul Work?

First, you need to open an account with RealtyMogul. There’s nothing special or complicated about opening an account with them.

Step 1) Complete your account profile at RealtyMogul.com. They ask for basic information such as name, address, etc.

Step 2) Select your investments. Once you join, you have access to current eligible investments. Investment details are presented with key information.

RealtyMogul offers 2 types of investment options: REIT investing through either their Income REIT or Growth REIT and individual property investing. The Income REIT has an annualized distribution rate of 6.0% and has made monthly distributions for 64 consecutive quarters (since inception). Meanwhile, the Growth REIT has annualized distribution rate of 4.50%, paid quarterly.

RealtyMogul’s REITs are open to accredited and non-accredited investors with a $5,000 minimum investment. Individual property investments are only open to accredited investors with minimum investments between $25,000 and $50,000.

Step 3) Once you are ready to invest, complete your transaction online in a few minutes.

Step 4) Track your investments. You can track your total invested value and distributions in the investment dashboard. You will also receive quarterly investment reports and annual tax documents through this portal.

Read our full RealtyMogul review

RealtyMogul Investor Dashboard
RealtyMogul Investor Dashboard

How Does Investing With Fundrise Work?

When investing with Fundrise, you are investing in either Fundrise eREITs or eFunds. Fundrise is available to non-accredited and accredited investors with a minimum investment of just $10.

eREITs and eFunds are comprised of a basket of non-traded real estate properties, from multifamily apartments to industrial complexes.

The eREITs and eFunds aim to seek a combination of dividend distribution and capital appreciation, depending on the strategy.

When you open an account with Fundrise, they offer a wide range of account levels. “Basic” accounts require a minimum investment of $10, and “Advanced Portfolio” requires a minimum investment of $10,000. “Premium” is reserved for accredited investors only with a minimum investment of $100,000.

*The main difference between investing with Fundrise and RealtyMogul is that Fundrise offers tiered investment options based on how much you invest. Meanwhile, RealtyMogul only splits its investment options between accredited and non-accredited investors.

Fundrise Accounts
Fundrise Account Levels

Once you open a Fundrise account, you can view and manage your investments from one easy-to-use dashboard.

Fundrise Investor Dashboard
Fundrise Investor Dashboard

Key Features: RealtyMogul and Fundrise

RealtyMogul Key Features

  • Thorough investment vetting process.
  • Dividend Reinvestment. RealtyMogul allows for dividend reinvestment enabling investors to take advantage of compound interest.
  • 67 months of consecutive returns through its Income REIT. RealtyMogul’s flagship Income REIT has generated 67 consecutive quarters of returns since its inception in 2016, with annualized distributions ranging from 6 – 8.5%.
  • Early Redemption Features. RealtyMogul offers a tiered repurchase schedule – meaning they will repurchase shares at a discount to 100% of the NAV for up to 3 years. After 3 years, RealtyMogul will repurchase shares at 100% of the most recent NAV.

    Realty Mogul does not offer share repurchase programs for individual property investing, which is available to accredited investors only.
  • 1% Asset Management Fee. RealtyMogul REITs have a 1% annualized asset management fee, paid monthly. This means you would pay approximately .0.83% per month in fees. All distributions quoted by RealtyMogul are net of fees. Fees vary for individual property investing.
  • The site is a platform for sponsors to raise funds. This is probably the least understood feature of real estate crowdfunding. RealtyMogul, like many crowdfunding platforms, serves as a medium for real estate sponsors to raise funds for the project. In other words, most projects on their website are managed externally.

Fundrise Key Features

  • $10 Minimum Investment. You can open an account and start investing in real estate with just $10.
  • Early Redemption Option. If investors want to redeem their shares of the eREITs or eFund, they can place a redemption request at any time. However, any eREIT or eFund redemptions processed before an investment is five years old are subject to a flat 1% penalty.
  • Dividend Reinvestment. If you enable dividend reinvestment, dividends earned are automatically reinvested quarterly according to your investment plan. 
  • Create and Manage Investor Goals. This feature allows you to invest with a defined goal in mind to track your progress towards achieving your defined objectives. Investor goals are only helpful if your investment horizon is 5 years or longer.

    Common goals include saving for a large purchase or retirement. The Investor goals tool is expected to show you how your portfolio could grow over time through continued investment, appreciation, and dividend/distribution income.

    Once your goal is set, the goal tracker will monitor if your portfolio is on track, needs attention, or is off-track, and then guide you towards making adjustments to help you meet your goal.

    Investor Goals is available to all taxable accounts beginning at the “Starter” account level.
  • Automated Investing. You can schedule automatic investing to your Fundrise portfolio, at any time, with $10 increments. Auto-investments are allocated according to your chosen plan, and Fundrise may offer new investments to automatically invest in as they arise.
  • 1%/yr Fee. Fundrise charges a yearly asset management fee of 0.85% plus a 0.15% advisory fee, so 1%/yr for AUM. All dividends are net of fees. So for every $1,000 invested, you will pay $10 in fees.

    Fundrise does not charge transaction fees, sales commissions, or additional fees for enabling features on your accounts, such as dividends or auto-investment. 
  • 21 Consecutive Quarters of Positive Returns. Since its inception, Fundrise has delivered 21 consecutive quarters of positive returns with a net 11.58% return across all clients since inception. Their best quarter returned 9.40%, and their worst quarter was 1.15%.
  • Multiple Account Levels. The Fundrise platform consists of five levels of accounts with varying minimum balance requirements. Depending on the level of account opened, you will have access to different investment options.

    Fundrise’s most affordable option is its “Starter” portfolio. This low-cost package starts at $10. The portfolio includes access to Fundrise’s registered products, dividend reinvestment, and auto investing.

    If you open a ‘Starter’ portfolio, you can invest in the Income Fund, which focuses on cash flow generation, or the Flagship Fund, which focuses on income and capital appreciation.

    However, the Starter portfolio does not have IRA access or other advanced functionality. For $1,000, you can upgrade your account to the Basic Plan. With the Basic Plan, you can define your investment goals, open a taxable IRA, and invest in the Fundrise iPO.

    Neither the “Starter” nor “Basic” plans grant access to Fundrise’s non-registered investment programs. After that, there are 3 higher-level plans which include: Core, Advanced, and Premium. These plans have a higher minimum balance, but also come with more advanced features including additional investment options such as an Opportunity Zone Fund.

Read more about Fundrise

Head-to-Head Comparison

Investment Options
Winner: Fundrise

In terms of the pure number and breadth of investment options, Fundrise is the clear winner. Fundrise has 11 active eReits and 2 eFunds. eREIT strategies span from income generation to Midwest Region strategies.

Meanwhile, RealtyMogul offers 2 REITs (Income REIT and Growth REIT) in addition to private placements, but private placements are only available to accredited investors. The private placement investments span debt and equity investments across multiple investment strategies and property types.

RealtyMogul

RealtyMogul offers 2 REITs for all investors and private placements to accredited investors. RealtyMogul REITs include An Income REIT and Apartment Growth REIT.

Both REITs have a minimum investment of $5,000 and are open to accredited investors & non-accredited investors.

The main benefit of commercial real estate investing through REITs is that investor spread their money across multiple properties, which will provide a higher level of diversification compared to individual property investing.

Historically, REITs have provided investors with regular income streams, portfolio diversification, and long-term capital appreciation opportunities.

RealtyMogul Income REIT

  • Minimum Investment: $5,000
  • Distribution Frequency: Monthly
  • Annualized Distribution Rate: 6.00 %
  • Property Type: Diverse
  • Investment Types: Debt and Equity
  • Open To All Investors: Yes
  • Objective: Income generation
  • Trusted: Regular audits performed by Cohn Reznick
  • Good For: Monthly Income

The RealtyMogul Income REIT (Real Estate Investment Trust) is a public, non-traded REIT making equity and debt investments in commercial real estate properties diversified by investment type, geography, and property type. The REIT’s objective is to provide monthly income to investors by rigorously evaluating numerous investment opportunities to find those that can support the REIT’s distribution target.

From the start, The Income REIT has distributed 64 months of consecutive distributions to approximately 6,500 investors totaling roughly $18.5 million. Anyone can invest in RealtyMogul’s Income REIT with a minimum of just $5,000, regardless of their income or net worth.

If you are interested in monthly income through real estate, RealtyMogul’s strong history of 64 consecutive months of distributions at a 6% annualized rate could be an excellent option.

RealtyMogul Apartment Growth REIT

  • Minimum Investment: $5,000
  • Distribution Frequency: Quarterly
  • Annualized Distribution Rate: 4.50%
  • Property Type: Multifamily
  • Investment Types: Common & Preferred Equity
  • Open To All Investors: Yes
  • Investment Goal: Growth potential and income
  • Trusted: Regular audits performed by Cohn Reznick

The Apartment Growth REIT is a public, non-traded REIT that invests in apartment buildings in resilient markets that can offer current income and solid growth potential. The REIT’s primary objective is to realize capital appreciation in the value of its investments over the long term through the renovation and repositioning of the multifamily properties and pay attractive and stable cash distributions to stockholders.

As of today, the Growth REIT has distributed 16 months of consecutive distributions to approximately 2,700 investors totaling approximately $4.mm. Anyone can invest in RealtyMogul’s Growth REIT with a minimum of just $5,000, regardless of their income or net worth.

Fundrise

Fundrise Has 11 active eREITs and 2 eFunds. eREIT strategies span from income generation to Midwest Region strategies. eREITs are a diverse family of funds, each pursuing a focused real estate investment strategy. Fundrise typically allocates its clients’ portfolios to a combination of eREITs, calibrating each client to specified objectives and risk tolerance.

The eFunds are comprised of an Income Real Estate Fund, whose main objective is income distribution and currently has a 6.5% distribution rate.

Their other fund is The Flagship Real Estate Fund which has an investment objective to generate income while also seeking long-term capital appreciation with low to moderate volatility and low correlation to the broader markets. The Flagship Real Estate Fund currently has a 0.75% distribution rate.

Early Redemption Options
Winner: RealtyMogul

RealtyMogul offers a tiered repurchase schedule- meaning they will repurchase shares at a discount to 100% of the NAV up to 3 years. After 3 years, RealtyMogul will repurchase shares at 100% of the most recent NAV.

Realty Mogul does not offer share repurchase programs for individual property investing, which is available to accredited investors only.

However, RealtyMogul will repurchase your shares at 100% of their value if you should pass away before the end of the 3-year vesting schedule.

98% if you held the investment for one year but less than two.
99% if you held the investment for two years but less than three.
100% if you held the investment for three years or more.
0% if you held the investment for less than a year.

For example, if you held your RealtyMogul for 1.5 years, your redemption rate would be 98% X the most recent NAV.

Fundrise charges a 1% flat fee for any redemption request that is less than 5 years old. After 5 years, Fundrise will repurchase redemptions at full value, with no fee or penalty.

Also, neither platform can guarantee liquidity options but does so on a best efforts basis. Both companies will repurchase at the effective repurchase rate multiplied by the most recently announced NAV per share.

Fundrise: If investors want to redeem their shares for the eREITs or eFund, they can place a redemption request at any time.

However, after a request is submitted, Fundrise typically processes the requests quarterly for the eREITs, and monthly for the eFunds after a minimum 60-day waiting period.

It’s important to note that while under normal market conditions Fundrise seeks to provide investors with liquidity through the redemption plan, during a financial crisis, investors should expect us to pause the redemption plan long enough to allow enough time for whatever events may unfold.

Account Fees
Winner:
Tie

When real estate crowdfunding platforms mention fees, they usually refer to their monthly asset management fee. Both RealtyMogul and Fundrise have a 1% management fee.

RealtyMogul REITs have a 1% annualized asset management fee, paid monthly. This means you would pay approximately .0.83% per month in fees. All distributions quoted by RealtyMogul are net of fees. Fees vary for individual property investing.

Fundrise has a 1% fee for assets under management. Fundrise charges a yearly asset management fee of 0.85% plus a 0.15% advisory fee, so 1%/yr. All dividends are net of fees. For every $1,000 invested, you will pay $10 in fees.

There are often additional fees baked in offering circulars, such as organizational and operating costs, and upfront selling costs. It’s really just a matter of how the platform presents the fees to you, which can sometimes be misleading and hard to understand.

Returns
Winner: Fundrise

Individual returns can vary depending on investment strategy and goals i.e., income generation vs. capital appreciation, so it’s hard to compare apples to apples.

That said…

Across all clients, Fundrise returned an average annualized return of 11.58%, net of fees. RealtyMogul has not listed its returns across all clients, but it has made 67 consecutive monthly distributions between 6% and 8% through its Income REIT since 2016.

For example, the RealtyMogul income REIT has made 67 consecutive monthly distributions since its inception in 2016, showing a strong track record in its REIT offerings, while Fundrise’s Income Fund has only been around since April 2022, so it’s hard to give a truly accurate comparison.

Income Funds Compared:

Since 2016, the RealtyMogul Income REIT has delivered 67 consecutive months of distributions to shareholders, with an annualized distribution rate between 6% and 8%. Meanwhile, Fundrise’s Income Real Estate Fund, which was launched in April 2022, has a current distribution rate of 6.5%. Given RealtyMogul’s strong track record, they take the W in the income category.

Fundrise Total Returns:

From 2017 – 2021, Fundrise returned an average annualized return of 11.58%, net of fees across all clients. Compared to all public REITs, which returned 13.4% and 19.21% for the S&P 500.

It’s important to note that your total returns could vary depending on your chosen plan and investment objective.

Fundrise has had 21 consecutive quarters of positive returns, with their best quarter returning 9.40% and their worst quarter being 1.15%.

Both the S&P500 and all public REITs had only 17 consecutive positive returns, with their best quarters returning 20.54%/16.70% and worst quarters returning -19.60%/-25.42%, respectively.

YearFundrise Returns
2022 Q13.49%
202122.99%
20207.31%
20199.16%
20188.81%
201710.63%

PROs & CONs

Realty Mogul

PROS

Strong track record for its Income REIT

Early Redemption Features

Wide range of private placement investment offerings

CONS

High minimum investment

No individual property investing for non-accredited investors

Only 2 investment options for non-accredited investors

Fundrise

PROS

Wide Range of Investment Options

Low Minimum Investment ($10)

Investor Goal Planning & Tools

Early Redemption Features

Mobile App

CONS

Early redemption fees

Tiered-Account makes not all features available to all investors

RealtyMogul vs. Fundrise: Which Platform is Better?

RealtyMogul’s Income REIT is an excellent option if you are looking for income generation. Its strong track record of consecutive monthly returns makes it an easy sell. If you are a beginner investor, RealtyMogul offers only 2 investment options for non-accredited investors making the selection process a bit easier.

However, if you are looking for a more customized investing approach, then Fundrise is a better bet. They offer a more comprehensive range of investment options across multiple strategies and geographical locations.

Overall, both companies have a solid operating history, but Fundrise offers more perks and features like creating and managing investor goals and a mobile app.