Disclaimer - I only have a very small amount of $$ committed (a bit more than $1,500) to Fundrise to get a feel for what it's like.
To respond to the question of "why not a REIT", Fundrise does have an article that goes into some detail about how they view the difference between their private eREIT platform and public REITs and specifically VNQ.
https://fundrise.com/education/blog-posts/vanguard-vs-fundrise-which-is-the-better-investment-optionI'm no expert, but my distillation of their argument is:
* Vanguard ETF invests in public traded REITs which invest in property management companies which invest in real estate and while Vanguard's fees might be low, ultimately there are higher costs that result in lower performance to ordinary investors due to all these layers
* Fundrise invests in their own private REITs which directly invest in properties allowing ordinary investors to get into real estate investments higher in the value chain resulting in quote "better returns at lower costs" by eliminating various middlemen
A downside of these non-publicly-traded private eREITs is that there is a limited liquidity, but Fundrise would tout that as a benefit to keeping costs low by avoiding the "premiums" of public markets.
I suppose the only score that matters is the performance of the investments. Fundrise
publish some data present some high level stats here:
https://fundrise.com/historical-performancewith what appears to be a decent average annualized return, however if you click on "Learn more about the assumptions" it quickly becomes clear that computing performance of these funds is complicated, quite frankly beyond my understanding - which of course may be good reason to steer clear. On the other hand, I'm not sure a public REIT would be less complicated, but perhaps it is far more established.
Scrolling down they also present a higher annualized dividend year than VNQ, although that is of their "Supplemental Income" portfolio which if I understand correctly is optimized to return the most dividends to investors.
Personally, I don't have the time or wisdom to invest in individual properties, and I enjoy the frequent updates from Fundrise describing (with pictures) the individual properties my $$ are being invested in, even if only tiny amounts.
I'm debating on whether to move beyond toy money to at least a small % of the portfolio going here, my inclination is to do so.