Connect Invest vs. Fundrise

Key Takeaways:

• Connect Invest's user-friendly platform and Short Notes investing model make real estate investing easy and accessible.
• Fundrise offers diverse equity, debt, and venture capital investment opportunities. 
• Connect Invest pays investors fixed-rate monthly dividends, whereas Fundrise investors, depending on portfolio performance, have the potential to earn quarterly dividends. 
• Connect Invest charges no fees and provides live customer service to assist investors. Many reviews highlight their fast and excellent customer support.

Investors wanting to diversify and move away from traditional stocks and bonds often look to real estate to balance their portfolios and earn passive income. But real estate is expensive, and the burden of direct ownership is heavy—a big obstacle for the everyday investor. 

There are alternate ways to invest, and two popular platforms are Connect Invest and Fundrise. Both make real estate investing accessible, and we'll analyze Connect Invest vs. Fundrise. 

What is Connect Invest?

Connect Invest is a real estate investment platform whose mission centers around accessibility. Their model enables investors to purchase short-term notes that fund active real estate developments across the U.S. 

They offer investors three types of Short Notes, with investment terms ranging from 6 to 24 months. Investors can select the Short Note that best aligns with their investment strategy.

One significant barrier to real estate investment has been the expense, but Connect Invest has removed that obstacle for investors with a minimum investment requirement of just $500. Of course, higher net worth investors can contribute more significant amounts and diversify across multiple notes. This approach enables investors to pursue real estate development without the complications of undefined exit dates, site visits, extensive paperwork, or legal complexities.

How Does Connect Invest Work?

Short Notes are a lower-risk way to earn passive income - to have your money work for you. After investors select and fund their Short Note, they receive regular monthly payments derived from the interest borrowers pay on the real estate loans within the Short Note Portfolio. This income can be used to grow their portfolios, invest in additional Short Notes, or cover other expenses.

The advantage of investing in Connect Invest Short Notes is direct exposure to real estate development without the need for significant initial investments or the burden of market research and project management. All projects funded by Short Notes are thoroughly vetted to confirm they are located in high-performing markets and managed by reliable borrowers.

Invested funds are directly managed by the professional and experienced Connect Invest team and are used to fund real estate loans within our Short Note Portfolio of commercial real estate, single-family homes, apartment buildings, etc.

What is the Minimum Investment for Connect Invest?

The minimum investment for all Connect Invest Short Note offerings is $500.

What Fees Does Connect Invest Charge?

Prospective investors will be pleasantly surprised to learn that Connect Invest doesn't charge any fees. The only caveat is that fees will apply if you decide to liquidate the Short Note before its maturity date.

Pros of Investing with Connect Invest

Investing in Connect Invest Short Notes has several pros. We've touched on a couple already, but let's consider a more complete list.

• A low minimum investment of $500 makes real estate investing possible for everyone.
• All offerings are open and accessible to accredited and non-accredited investors.
• All properties are located in well-performing markets and are carefully vetted.
• Connect Invest is an easy-to-use platform with no confusing jargon.
• Fixed-rate monthly passive income eliminates the guesswork in calculating your returns. Once you're locked into a Short Note, your interest rate does not change.
• Connect Invest works closely with loan originator Ignite Funding, a company that boasts solid historical performance.
• A user-friendly platform with clear investing steps makes investing in Connect Invest Short Notes one of the simplest ways to invest in real estate development in the U.S.

Cons of Investing with Connect Invest

The Short Note Portfolio contains several diverse real estate developments. Investor funds are spread across the loans within that portfolio, so investors can't select specific developments to invest in. This may be a negative for investors who like to choose specific projects.

What is Fundrise?

Fundrise is a real estate investing platform offering both accredited and non-accredited users investment opportunities in diverse equity, debt, and venture capital.

How Does Fundrise Work?

When creating an account, investors choose from plan options that include:

• Supplemental Income (real estate debt providing cash flow)
• Long-Term Growth (real estate capital appreciation through improving properties)
• Balanced Investing (combination of debt and equity investments)
• Venture Capital (private, pre-IPO technology companies)

Each plan has a unique risk and return profile, allowing investors to choose the plan that best suits them. Once the plan is selected and funded, monies are automatically allocated so that each fund invests in a diversified pool of assets. 

Fundrise investors fund eREITs and eFunds, which are the limited liability companies holding the real estate projects in each portfolio. Investors buy shares of these companies, resulting in the ability to efficiently diversify into several properties at a low cost. The difference between Fundrise and REITS is that Fundrise invests in private REITS rather than the usual public ones.

What is the Minimum Investment for Fundrise?

The minimum investment depends on the type. For example, most eFunds, eREITS, and the Innovation Fund (Venture Capital) require just $10. The Fundrise IPO minimum investment is $500, and funding with an IRA requires $1,000. Investors will need to note the minimum investment requirements for their chosen plan. 

What Fees Does Fundrise Charge?

Investors can expect to pay Fundrise fees, including a 0.15% advisory fee, which can be waived depending on circumstances. This advisory fee, over 12 months, amounts to $1.50 for every $1,000 invested. 

Funds in the standard portfolios pay an annual asset management fee of $8.50 for every $1,000 (0.85%), and other investments, like the Innovation Fund, charge higher fees (1.85%).

Pros of Investing with Fundrise

There are several reasons why an investor would consider Fundrise, and these include:

• Many investment options are available on the platform, including debt and equity, commercial and private real estate, single-family homes, apartment buildings, private equity, and IPO.
• The ability to invest in multiple sectors, customizing your portfolio to your liking.
• Earning bonus shares when referring friends to the platform.

Cons of Investing with Fundrise

While the Fundrise platform has several pros for investors, there are also cons to be considered. These are:

• Unlike Short Notes, where investors receive monthly dividends, Fundrise returns aren't consistent or fixed. Investments have the potential to generate quarterly dividends, but it depends on portfolio performance.
• Investing with Fundrise is a long-term, 5+ year proposition. It's not a good fit for short-term investors. 
• Investments are primarily illiquid, and while investors can request to redeem shares at any time, they are not guaranteed. The platform will consider requests to liquidate shares quarterly and monthly after a 60-day waiting period for the Fundrise eFund.
• Fees to invest with the platform are high, whereas Connect Invest offers a fee-free platform.
• Customer reviews online have been poor, with 1.7 out of 5 stars on Trustpilot, several recent negative reviews on Google, and 1.8 out of 5 stars on BBB. A common complaint is the lack of live customer service.
• Although non-accredited investors are allowed, many lucrative eFunds/eREITs are only available to accredited investors.
• Fees are complicated, and understanding them could be tricky to navigate.

Comparing Connect Invest vs. Fundrise as Real Estate Investing Platforms

Connect Invest and Fundrise are investing platforms that strive to create real estate investment opportunities for a broader investor demographic. They are similar in that they allow non-accredited investors, funds are diversified across commercial and residential real estate projects, and both are considered crowdfunding options.

A significant difference is that Connect Invest's Short Notes pays investors a fixed-rate monthly dividend, while Fundrise dividends depend on the portfolio's performance. Other differences include the $10 minimum with Fundrise vs. the $500 minimum with Connect Invest, Short Notes directly fund real estate loans while Fundrise mainly consists of eFunds and eREITS, and Connect Invest is the only one of the two platforms to provide live customer service. 

Bottom Line: Connect Invest vs. Fundrise

Online platforms are a great starting point for investors wondering how to create supplemental income and grow wealth through real estate investing. Crowdfunded platforms can provide excellent access to REITS and other investment opportunities, but remain aware that liquidity is typically limited with many platforms. When considering investment platforms, think about your risk tolerance, financial goals, and investment strategy.

Where Fundrise requires investors to exercise due diligence and possess some knowledge that beginners may not have acquired, Connect Invest's Short Notes model and user-friendly platform make real estate investing simple and accessible. 

Is Connect Invest legit? The proof is in the pudding - Connect Invest reviews have consistently scored high, receiving excellent 5 out of 5 stars on Google reviews from customers. Start investing today!