- Fundrise is an American real estate investment platform founded in 2012 with over 387,000 active investors and $7 billion invested in real estate across the USA.
- The platform allows users to invest in real estate with as little as $10 and zero credit requirements — all for a modest annual management fee.
- Fundrise is only available to Americans, but Lotly offers similar benefits for Canadian real estate investors in the GTA.
We need more accessible investment options for real estate in Canada. That’s where real estate crowdfunding startups like Lotly come in, to help people access real estate equity without insane down payment requirements or credit barriers.
Another popular real estate platform is Fundrise. You may have seen the company mentioned on Fortune.com or Business Insider. Plus, people love it — the platform has over 387,000 active investors.
But upon a quick Google search of Fundrise Canada, you’re met with a snag: Fundrise isn’t available in Canada…let alone Toronto. But Lotly is!
We’ll cover the basics of how Fundrise works and how you can access similar real estate appreciation and ROI in the GTA through Lotly.
What is Fundrise?
Headquartered in Washington, DC, Fundrise is a real estate investment platform and app that seeks to close the gap between the average investor and access to real estate.
We’d say they succeeded. Since its conception in 2012, Fundrise has:
- Opened the doors to real estate equity to over 387,000 investors
- Invested $7 billion in real estate across the USA
- Managed over $3 billion in real estate equity
- Paid out over $311 million in dividends
So, how does it work? First, you download the app. Keep in mind that you need to be a US citizen to invest through Fundrise. Next, you’ll create an account and select a portfolio strategy for your investment. You can put in as little as $10.
Then, Fundrise manages your investment. The interface looks a bit like a stock portfolio since you can see your investment’s dips and peaks. We love the transparency, as Fundrise shows you:
- Construction progress
- Project completion alerts
- Occupancy reports
- Market trends
- YTD and daily returns
You’ll pay a 0.15% annual investment advisory fee, which is superbly competitive. Just to put things into perspective, that’s under $10 ($8.50) per $1,000 invested.
Now, where exactly did your investment go? A mix of commercial and residential real estate.
- Single-family rentals: Over 3,400 homes across 30 US markets backed by Goldman Sachs
- Multifamily apartments: 10 US markets with over 2,400 units, including a project to transform California’s Bloomberg neighbourhood
- Industrial properties: 2.3 million square feet of commercial rentals like coworking spaces
And how much are investors earning with Fundrise?
Here’s a quick chart from Fundrise’s website comparing their returns to similar investments like REITs:
But unless you’re blessed with dual US-Canada citizenship, Fundrise can’t be part of your investment strategy.
That’s where Lotly comes in.
What is Lotly?
Lotly is one Canada’s most innovative real estate investment startups that’s passionate about making real estate investing and, as a result, homeownership accessible and affordable for people.
Our platform helps Canadians invest in GTA single-family homes and condos without the headaches of large down payment requirements, mortgages, or property management.
We also support aspiring homeowners purchase property by supporting their down payments with our investor funds. The idea is that investors put in a minimum of $1,000 and receive their initial investment plus appreciation once the homebuyer sells or refinances their property.
Similarities between Fundrise and Lotly
1. Fundrise and Lotly don’t require big investments: With the average home price in the GTA and big American cities, investing in real estate feels like an uphill battle. Both platforms eliminate that barrier to accessing real estate.
2. Fundrise and Lotly don’t care about credit history or mortgages: Today’s traditional real estate investor needs to have an impressive credit rating to obtain a mortgage approval. With Fundrise and Lotly, you don’t need to worry about either.
3. Fundrise and Lotly eliminate the stressful property management aspect of real estate investing: You’ll never have to worry about broken pipes, angry tenants, or condo maintenance fees when you invest with either Lotly or Fundrise.
Bottom line? Lotly and Fundrise both make life easier for today’s real estate investor.
Differences between Fundrise and Lotly
1. Lotly requires a higher minimum investment: We require a minimum $1,000 investment, while Fundrise allows a minimum of $10. Sure, the $10 minimum is super accessible; however, we feel that you can’t really experience a worthy return with less than a $1,000 investment. At that point, a $10 minimum feels more like experimentation than investing.
2. Lotly doesn’t manage any real estate properties: Fundrise has already purchased a large collection of properties and manages them with the investments sourced on their platform. On the other hand, Lotly’s investments go directly to homebuyers who care for and love the property (i.e. their home) themselves.
3. Lotly serves both the investor and the homebuyer: Fundrise is a platform for investors to access real estate appreciation, but doesn’t offer any services for an aspiring homebuyer. Lotly saw gaps to fill on both fronts, and offers homebuyers access to purchasing real estate backed by investor down payments.
4. Lotly has a higher management fee: Lotly charges a 0.5% management fee and a 2% up-front initiation fee. This is higher than Fundrise’s 0.15%, but they have a decade of history on us. To put things into perspective though, Lotly’s 0.5% management fee is the same as Wealthsimple’s managed account fee.
5. Lotly focuses on single-family residential real estate: While we think it’s great that Fundrise offers varied real estate investment opportunities, we’ve focused on single-family GTA homes.
6. Lotly has higher projected returns: The US real estate market is vast and popping with appreciation — but not as much as Toronto’s. Indeed, Fundrise cites an average of 10% in client returns from 2018 to 2022 (see image above). But since Lotly works with Canadians and the GTA market, we predict an impressive 15% projected return for our investors.
Invest with Lotly, real estate crowdfunding in the strongest market
We commend the waves Fundrise has made in the real estate crowdfunding game — but if you’re in Canada, you need a Fundrise Canada alternative.
If you’re looking for a low-cost, low-stress and high-return way to tap into real estate without heavy down payment requirements, mortgages, maintenance and every other landlord headache, then invest with Lotly.
We’ll pair you up with a Lotly advisor to walk you through the process, and once you’ve put in your money? Just sit back as you reap a 15% projected annual return with absolutely zero work required on your part.