We see that Fundrise users often switch to other investment platforms due to three key limitations:
- Low returns and distributions: According to Fundrise’s website, their Flagship Real Estate Fund has generated 4.3% annualized returns since inception. Their distribution rate (i.e., the amount of cash returned to investors each year as a percentage of their total investment) is also very low, at only 0.21%.
- Limited liquidity: Fundrise has minimum holding periods lasting multiple years, and early withdrawals may be restricted or penalized. We’ve also heard users say that Yieldstreet only allows 25% redemptions per year, so it can take four years to get out of a position.
- Increased exposure to market downturns: Fundrise’s flagship fund invests in real estate itself and not the debt. This presents a higher risk because real estate investors only get paid from sale proceeds after all debtors are paid in full, leaving them more exposed if property values decline. (We’ll explain this in more detail later.)
A good Fundrise alternative should address these three limitations.
It should (1) generate higher returns and pay a healthy distribution, (2) allow you to withdraw your principal and returns soon after making the investment, and (3) protect your capital by investing in the debt secured by the real estate and not the real estate itself.
In this article, we look at the five best Fundrise alternatives. We start with how Constitution Lending ticks the three boxes above: higher yields, liquidity, and capital protection.
Start investing in real estate loans that we’ve originated with just $1,000. Due to the quality of our loans, our investors have never experienced a principal loss.
1. Constitution Lending
Invest in High-quality Real Estate Loans Yielding 10% to 14% Annually
Through our real estate debt investing platform, investors can purchase fractional ownership in the hard money loans (e.g., fix-and-flip, bridge, and construction) we originate.
This differs from Fundrise’s investment strategy of building and leasing rental properties since you’re an investor in the loan used to construct or purchase the real estate. This offers three significant advantages:
- 10% to 14% returns: The interest rates on our fix-and-flip, bridge, and construction loans range from 10% to 14%. This allows our investors to earn higher interest returns than Yieldstreet and most other real estate investment platforms.
- 6 to 12-month holding periods: The duration of our hard money loans is 6 to 12 months. At this time, the borrower sells the investment property and repays the loan amount, then you receive your principal investment and any owed interest. You don’t have to commit for years like with Yieldstreet.
- More capital protection: Investing in real estate debt is safer than real estate itself because, when the property is sold, debtors get paid first and in full. This means if you invest in a $750,000 loan used to rehab or construct a $1 million property, the property’s value can drop to $750,000, and you can recover your full principal. The borrower’s $250,000 equity cushions the loss. If you invest with Yieldstreet, you’d be the one cushioning losses.
Here’s what clients say about investing in our real estate loans:
Let’s dive deeper into each of these three benefits below.
If you’re ready to start investing, open a free investment account here, and see our real estate debt options.
Consistent 10% to 14% Annualized Returns
As we mentioned above, the main limitation of Fundrise’s flagship fund is its low returns: just 4.3%.
Interest rates on our fix-and-flip, construction, and bridge loans range from 10% to 14% and are paid to you monthly. When the borrower sells the property at the end of the term, you receive your full principal. This payment structure ensures you receive consistent cash flow for the entire term.
We also offer a payment guarantee, which automatically kicks in if a borrower misses an interest payment. We will pay your interest payments for up to 6 months (or until the borrower resumes payments). During this time, we work to liquidate the property and use the sale proceeds to return your principal investment and accrued interest.
We are the only real estate investment platform that offers a payment guarantee feature.
That said, investors very rarely need our payment guarantee, given our borrower quality. We lend to experienced real estate professionals (e.g., flippers, construction companies, rental investors) who know what they are doing and pay on time.
As a result, our default rate is less than 2%, while the nationwide average is 4%. (Default rate is the percentage of borrowers who stop paying.)
You Can Withdraw Your Investment within 6 to 12 Months
Another common complaint about Fundrise is its liquidity rules. You’re typically locked into positions for years and cannot withdraw soon after making your investment.
With Constitution Lending, our short-term notes are between 6 and 12 months long. After the loan term is over, the borrower sells the property and uses the proceeds to pay off the loan, and we return your principal investment.
This way, you receive your principal back shortly after making your investment; you aren’t locked in for years.
By reinvesting more frequently, you can quickly pivot based on market conditions, whether that means reinvesting in more performing loans, diversifying earnings into other investments like stocks or bonds, or withdrawing for personal reasons.
Your Capital is Secured by Real Estate Worth Significantly More Than the Loan Amount
One of the key advantages of real estate debt is that it carries less risk than direct real estate ownership.
That’s because when a property is sold, the sale proceeds are used to pay debtors first and in full. Once debtors have recovered their full investment, real estate investors keep the remaining sale proceeds.
This protects you from losses in the property's value because the real estate investor’s equity absorbs losses in the property’s value. As a debtor, you only start losing money once the real estate investor loses their entire equity investment.
To maximize principal protection, we only originate loans where the loan amount is less than 75% of the underlying property’s value — giving our investors a 25% borrower equity cushion to protect against losses. It means that a property valued at $1 million, for example, can fall to $750,000, and our investors won’t lose a cent.
Due to this capital protection, our investors have never experienced a principal loss.
Read more: How to Invest in Short-Term Notes and Earn 10% to 14% Annualized Returns
Additional Benefits of Choosing Constitution Lending Over Fundrise
You Have Full Transparency and Control Over Your Investments
When you invest with Fundrise and most REITs, you’re investing in a pool of rental properties. You have little transparency into which properties fund managers are choosing, their location, type, or the borrower's financial profile.
With Constitution Lending, you can view all available loans on your dashboard, including details such as the individual property’s address, loan amount, property value, borrower credit score, and more — then choose which you’d like to invest in.
You have complete transparency into available deals and control over where your money goes.
We Invest Alongside You
Fundrise typically doesn’t invest their money alongside yours; their role is to manage investor capital. There are exceptions as Fundrise may co-invest with affiliates, but this isn’t common.
Fundrise’s stake (if any) is relatively small compared to the investor base, so they don’t have much skin in the game.
With Constitution Lending, we originate every single loan you see on our investment platform with our own capital, and hold a 50%+ stake in them for the entire term. This means that we put our money alongside yours — we have skin in every deal — so our financial incentives align to ensure the borrower continues to pay.
We Don’t Charge High Fees
The final limitation with Fundrise we’d like to highlight is that some users report that they charge steep management fees.
Constitution Lending, on the other hand, charges low fees, and we’re transparent about them. We charge a payment guarantee fee of 0.50% (acting as insurance in case borrowers don’t pay) and a servicing fee of 0.50%. That’s it.
How to Invest in Constitution Lending
- Create your investment account with Constitution Lending to begin.
- Once logged in, you’ll arrive at your personalized dashboard (as shown below), where you can explore our portfolio of active, income-generating loans. Each listing includes key details such as loan-to-value (LTV) ratio, purchase price, exit strategy, projected yield, loan term, and overall risk rating.
- If a particular note catches your attention, click on it to do your due diligence — including the outstanding loan balance, current and after-repair LTV, borrower credit score, and a concise deal summary.
- To invest, link your bank or IRA account to your Constitution Lending wallet. Then, select “Fund This Loan” at the bottom-right corner of the screen and enter your preferred investment amount.
- From there, you’ll receive monthly interest payments from the borrower, with your principal returned in full at the end of the loan term.
Invest Fractionally in Constitution Lending Real Estate Loans
Open a free investment account here and start investing in commercial real estate loans that we originate with just $1,000.
We believe that the quality of private real estate loans we originate makes us the best option for investors looking for Fundrise alternatives. However, we wanted to cover some alternatives in case you’d like to do some more research and compare us to other investment options.
2. Yieldstreet
Yieldstreet is a real estate crowdfunding platform that focuses on deploying investor capital in private market investments such as real estate, private credit, venture capital, cryptocurrency, and other alternative asset classes. Minimum investments typically start at $10,000.
The platform’s goal is to make these investment opportunities accessible to accredited investors seeking higher yields and greater diversification beyond stocks and bonds. Yieldstreet offers a variety of funds and individual offerings, each with different risk-return profiles, liquidity terms, and minimum investments.
While the platform provides an appealing entry point into alternatives, it’s important to note that many alternative investments are illiquid and may have longer holding periods than typical Constitution Lending real estate loans.
Additionally, Yieldstreet doesn’t offer payment protections like our payment guarantee feature, which can leave accredited investors exposed if tenants or borrowers don’t pay.
3. AcreTrader
AcreTrader is an investment platform that allows you to purchase fractional shares in farmland across the U.S. Accredited investors can gain exposure to farmland without purchasing entire plots themselves, with minimum investments starting at $15,000.
Each offering is structured through a separate LLC, so investors own equity in the underlying land and earn returns through rent and potential long-term appreciation. AcreTrader also handles all management responsibilities, from farm operations to tenant relations, making the process entirely passive for investors.
While their real estate crowdfunding platform provides an accessible way to invest in farmland, it’s important to note that the duration of these alternative investments is quite long; it’s common to be locked in for five to 10 years. The platform has announced plans to develop a secondary market to help investors sell shares earlier, but this option remains limited.
A final consideration is that AcreTrader doesn’t offer a payment guarantee like Constitution Lending. If one or multiple farmland tenants don’t pay, your cash flow can dry up.
4. Arrived Homes
Arrived Homes is a commercial real estate investment company that searches the market for top-performing rental properties in the most attractive markets (including single-family homes, multifamily homes, and vacation rentals), and deploys investor capital to purchase them.
Accredited investors receive rental income from these properties as well as appreciation payments once they are sold, and can start investing with $100.
Like AcreTrader, each property is held in its own LLC, and Arrived handles all management responsibilities, such as finding tenants and handling repairs. It’s a good way for investors to earn passive income.
That said, investments in Arrived Homes typically have holding periods of about five to seven years. However, timelines vary depending on market conditions and property performance.
During this period, investors receive quarterly dividends from rental income but cannot exit without paying penalties. In addition, Arrived Homes doesn't offer protections for investors in case tenants don’t pay.
Even with those cons, Arrived Homes offers an accessible and hands-off way to invest in real estate.
5. DiversyFund
DiversyFund is designed to make it easy for individual investors to get started in real estate without the hundreds of thousands of dollars required by direct investing. DiversyFund pools investor capital and uses it to purchase apartment complexes across the U.S. You can start investing in their flagship Growth REIT with just $500.
On their website, DiversyFund says that their investment strategy is based on four principles: (1) diversification across locations and borrower types, (2) long-term appreciation, (3) transparency, and (4) an experienced team of real estate investors and asset managers.
In February 2023, DiversyFund announced its first cash distributions for its Growth REIT I fund. That payout represented an approximate 6.1% annualized return for investors. While past returns don't guarantee future returns, it’s nice to know that DiversyFund has a track record of delivering returns higher than Fundrise's.
Investors’ money is typically tied up for about 5 years, as the fund reinvests rental income profits into property improvements and new acquisitions rather than paying regular dividends. Returns are realized primarily when real estate properties are sold and gains are distributed.
Runner-up Fundrise Alternatives
- RealtyMogul: Investors can get exposure to both public, non-traded REITs (Real estate investment trusts) and private placements, which focus on multifamily and commercial real estate.
- CrowdStreet: Investors can purchase shares in institutional-grade commercial real estate projects, giving them direct access to individual deals.
- EquityMultiple: Provides accredited investors with a mix of equity, preferred equity, and debt investments in professionally vetted commercial real estate projects.
- Roofstock: Focuses on single-family rental properties, allowing investors to purchase fully leased homes and earn rental income.
- Streitwise: A private REIT open to both accredited and non-accredited investors, offering consistent dividend income from leased commercial properties.
Invest in High-Yield Real Estate Loans with Constitution Lending
Sign up for a free investment account and earn 10% to 14% annually.
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