Intrigued by the idea of real estate investment yet unsure where to begin? The investment landscape offers a plethora of platforms, with Yieldstreet and Fundrise being two of the most renowned.
Deciding between Yieldstreet and Fundrise entails understanding their key differences.
Let’s delve into this Yieldstreet vs Fundrise review to enlighten your decision-making.
What Is Yieldstreet
Diving into the world of debt crowdfunding? You might have come across Yieldstreet. It requires a minimum investment of $10,000 and typically caters to accredited investors. However, the Prism Fund is a unique portfolio that welcomes non-accredited investors and sets the entry barrier at $5,000.
Predominantly, Yieldstreet presents debt investments with a fixed rate of return and higher default risk. Bear in mind your funds may be tied up for a while due to the lack of a secondary market. So, think of it as a long-term commitment.
Yieldstreet primarily invests in commercial real estate. However, it also dabbles in marine vessels, legal settlements, and art. All investments are collateralized, reducing your risk of total loss, yet the return rate isn’t guaranteed.
The Pros and Cons of Yieldstreet
Consider these pros and drawbacks before deciding on Yieldstreet as your real estate investing platform.
Pros
- Diverse investment options: Explore various assets, not just real estate.
- Reduced risk: Collateralized investments minimize the risk of a total loss.
- Regular interest payments: Enjoy consistent cash flow throughout the loan period.
Cons
- Exclusivity: The majority of investments are for accredited investors only.
- Limited liquidity: Your money might be tied up for an extended period due to a lack of a secondary market.
- Limited availability: Due to their high value, the number of investments available at any time is relatively small.
What is Fundrise?
Are you searching for an affordable way to invest in real estate? Fundrise lets you dip your toes in commercial real estate for as little as $10.
Open to non-accredited and accredited investors, Fundraisers $10 minimum investment is a draw for many. Their focus lies on buying undervalued properties and selling them at a significant markup, allowing investors to profit.
The Pros and Cons of Fundrise
When comparing Yieldstreet vs. Fundrise, consider these pros and cons.
Pros
- Low entry point: You only need $10 to invest.
- Multiple portfolio options: Choose portfolios based on your risk tolerance and expected returns.
- Open to all: No specific net worth requirements to invest.
Cons
- Illiquid investments: Your funds could be tied up for up to five years.
- Hidden fees: Fundrise may spring unexpected fees on investors.
- Requires due diligence: Investors are responsible for researching properties and borrowers, which can be time-consuming.
Yieldstreet’s Unique Features
Asset-Based Investments: All investments have collateral to ensure value. If a borrower defaults, Yieldstreet attempts to recover the asset’s value to reimburse the investors.
Prism Fund: This fixed-income portfolio, open to non-accredited investors, invests in five asset classes, providing a 7% quarterly dividend at a 1.5% annual cost.
Yieldstreet Wallet: This FDIC-insured savings account allows you to earn minimal interest and facilitates quicker investments.
Self-Directed IRA: Yieldstreet IRA, available with the Yieldstreet Wallet, gives you control over buying and selling investments.
Also, remember to consider CrowdStreet as another worthy online real estate investment platform with over 470 real estate deals.
Fundrise’s Unique Features
Redemption Options: Fundrise provides limited options for liquidity, including a 90-day redemption window on most investments, allowing you to recover your funds if unsatisfied.
Various eREIT Options: Fundrise offers seven eREITs, enabling you to diversify your portfolio across different types of properties and goals.
Yieldstreet vs. Fundrise: Fee Structures
Yieldstreet: Charges range between 1% and 2.5% annually, but additional fees may apply to some investments, including an annual flat fee.
Fundrise: While a 1% annual fee is advertised, additional fees, such as development and liquidation, may arise post-investment.
Yieldstreet vs. Fundrise: Who Would They Suit Best?
Yieldstreet primarily caters to accredited investors, although their Prism Fund welcomes all. If your investment palette seeks diversity with alternative options, Yieldstreet’s focus on real estate, marine vessels, art, and legal cases may be enticing. It is an intriguing avenue to expand your investment horizon beyond the traditional.
Fundrise, on the other hand, is a welcoming platform for those testing the waters of real estate investment without a hefty initial investment. With just a mere investment of just $10, you can enter real estate.
While the returns might not mirror those of Yieldstreet’s alternative investments, Fundrise offers a gentle introduction to assess if real estate investing aligns with your financial goals.You can take advantage of our Fundrise promo code to get started with the platform today.
Conclusion
To sum it all up, both Yieldstreet and Fundrise bring distinct qualities. Your unique investment strategy and familiarity with the real estate market will largely drive your choice.
Are you an accredited investor or drawn towards a more expansive portfolio? If so, Yieldstreet should sit well with you, offering a broader spectrum of investment options.
Alternatively, if your investment style is more about setting things in motion and stepping back, all while keeping a keen eye on fees, Fundrise might be your preferred avenue.
It offers a user-friendly, low-fuss investment process coupled with competitive fee structures. Ultimately, the decision lies in your hands, and aligning it with your investment goals will pave the path toward your real estate investment journey.
