Fundrise lowers hurdles so more people can invest in real estate. Real estate is a great alternative investment. Real estate is a good option for investors who want to increase their returns.
Real estate returns don’t correlate with the stock market, so it’s a good idea to invest in real estate. Real estate investing has the potential for long-term appreciation and tax benefits, making it an attractive option for those looking todiversify their investment portfolio.
Our team members who are active investors in Fundrise will help guide this review. Our review will give valuable insights into the world of Fundrise investing.
What Is Fundrise?
Fundrise is a Washington, D.C.-based, online real estate investment platform developed and launched by brothers Ben and Dan Miller in 2012 after receiving SEC approval in 2010. One of the most trusted sources for real estate investment opportunities in the United States is the platform.
Fundrise is one of the best real estate crowdfunding platforms. Thousands of people have been able to invest in real estate with as little as $500. A $10 deposit on Fundrise.com could make you a real estate investor. You can invest in high-quality real estate projects with just a few clicks with Fundrise.
Fundrise was the first real estate crowdfunding platform in the United States, and it remains one of the only real estate investment portals open to non-accredited investors.
How Does Fundrise Work?
Just like Lending Club lets you invest in personal loans without starting a bank, real estate crowdfunding platforms let you put a smaller amount of money in real estate. Real estate crowdfunding platforms allow you to invest in a different asset class without the hassle of owning physical property.
Investment Types
Through Fundrise you can invest your money in real estate through two different investment vehicles:
- Fundrise invented electronic real estate investment trusts, or eREITs, which are non-publicly traded trusts. eREITs give investors access to a wide variety of real estate assets, allowing them todiversify their portfolios and potentially benefit from higher yields than traditional real estate investments. A lot of different real estate developments could be included in a single eREIT share. Short-term income growth can be achieved with shares in eREITs. Access to a diversified portfolio of real estate investments is provided by eREITs. Projects such as office buildings and shopping centers are usually held by these funds.
- Fundrise’s eFunds targets long-term growth in property value for the investor. Fundrise and Saltbox shifted their eFund strategy from urban housing to industrial properties. Fundrise and Saltbox have created an industry-leading portfolio of industrial properties in some of the most desirable markets in the country.
eREIT and eFund shares are hard to cash out because they can’t be publicly sold. It may be difficult to sell holdings in an eREIT or eFund without a secondary market. Fundrise has worked to address the issue, but you would still need another investor to buy your shares. Fundrise encourages investors to invest in multiple properties in order to spread the risk of a single asset. This takes time.
Investment Strategies
You will be able to choose an investment strategy when you join Fundrise. A team of investment advisors will help you make the most informed decisions for your investments. The strategies are based on your risk tolerance and goals. These strategies need to be reviewed regularly to make sure they are still appropriate for your needs.
Here’s a quick breakdown of Fundrise’s four strategies:
- This plan invests in real estate. This plan invests in real estate financing and gives investors a steady stream of income. It nets a moderate return of around 4%. It’s a great way to invest without taking on too much risk.
- Core Plus: Core Plus invests in residential and industrial properties for higher income and growth, with an average total return of 6-10%
- This strategy invests in areas with limited affordable housing and has an expected overall return of 8%. The goal of this strategy is to create long-term value by improving the housing stock and providing quality homes at an affordable cost to those who need them most.
- Fundrise’s riskiest strategy offers the highest potential for rewards, with an expected annual return of 10%, focusing on major undertakings like new developments in prime locations. The risks associated with such investments should not be taken lightly, as they are not for everyone.
Fundrise promises a 90-day money-back guarantee so I was skeptical at first. I was satisfied with my portfolio return, low fees, and transparent practices within the first 90 days. This portfolio will be a great investment for me. I will stick it out for the next 5 years.
Fundrise Investment Plans
Fundrise has a specific type of portfolio and risk tolerance. Fundrise makes it easy to invest in real estate. You have the option of choosing a plan. You should compare the different plans to see which one is best for you. Investing in a different combination of eFunds and eREITs reduces your risk compared to traditional real estate investing, and each plan invests your money in a different combination of eFunds and eREITs. You can gain exposure to real estate markets across the world by investing in a combination of eFunds and eREITs.
Adding Fundrise real estate assets to your cash flow could be a source of passive income. With Fundrise, you can easily diversify your portfolio with real estate investments that are backed by carefully vetting properties, providing you the peace of mind to rest easy knowing your money is invested securely. Real estate deals can grow your portfolio and net worth.
Let’s look at each Fundrise account level:
1. Starter
- Minimum Investment: $10
- Advisory Fee: 0.15%
- Management Fee: Up to 0.85%
- Referral Bonus Shares: $25
With a $10 investment, you can invest in Fundrise’s Flagship Fund. You can keep your target with the Starter Account. It’s a great option for people just starting out in investing.
You can only invest in one Investor Goal type at this level. To find an investment mix that fits your risk/return profile, you can adjust the percentage of each asset class that is included in your Investor Goal type. You will have more control once you reach $1,000 in asset value. You can grow your money by investing in the stock market.
2. Basic
- Minimum Investment: $1,000
- Advisory Fee: 0.15%
- Management Fee: Up to 0.85%
- Referral Bonus Shares: $50
The Basic Plan offers all the features above, plus it gives you access to all of Fundrise’s You can choose where you invest. You can make informed decisions that are tailored to your financial objectives with the help of investor goals.
The Basic Portfolio allows you to open an IRA account and invest in the Fundrise IPO, buying yourself an ownership stake in the company. Fundrise’s dashboard will give you a comprehensive view of your portfolio.
3. Core
- Minimum Investment: $5,000
- Advisory Fee: 0.15%
- Management Fee: Up to 0.85%
- Referral Bonus Shares: $50
You can get access to a more diversified portfolio if you make a minimum investment of $5,000. This minimum investment will allow you to take advantage of professional money management services.
The Core Plan and higher allow you to tailor your portfolio by investing across funds with different objectives. You can make changes to your portfolio at any time to make sure it’s in line with your goals. You can invest in funds that aren’t registered. These investments may be subject to greater risks, but offer more flexibility and potential for higher returns. eREITs.
4. Advanced
- Minimum Investment: $10,000
- Advisory Fee: 0.15%
- Management Fee: Up to 0.85%
- Referral Bonus Shares: $50
With the same advisory and management fees as the lower tiers of plans, serious investors with $10,000 or more to invest can enjoy more advanced strategies and the potential for higher returns. It is important to remember that higher returns come with greater risks.
Advanced investors can directly allocate funds and access Fundrise’s eFund. Advanced investors can benefit from a dedicated account manager.
5. Premium
- Minimum Investment: $100,000
- Advisory Fee: 0.15%
- Management Fee: Up to 0.85%
- Referral Bonus Shares: $100
If you are an accredited investor, you can take advantage of Fundrise’s Premium features. Fundrise is an excellent platform for accredited investors who want to invest in real estate.
In addition to all the perks of the lower-tiered plans listed above, you get priority access to Fundrise’s The investor relations team has access to private equity funds. The Investor Relations Team is dedicated to providing clients with the best possible access to profitable investments.
Fundrise is simple to invest in once you pick a portfolio. The Fundrise team is always available to answer any questions you may have. You aren’t picking from a single property when you invest. Instead, you’re investing in a portfolio of properties across the country to reduce risk. You don’t have to worry about one deal going wrong ruining your entire portfolio because this keeps your risk low. It is important to have a diverse portfolio.
Cost and Fees
Fundrise does not charge any fees for transactions. Fundrise portfolios have two annual fees, an advisor fee and an assets under management fee.
The annual advisor fee is 0.15%. The lower fee makes it an attractive option for investors. You can expect to pay 1% of your assets management fee each year to use Fundrise. Fundrise is an attractive option for those looking to build their wealth because of its low fee.
Fundrise notes that you could be responsible for additional fees if you invest in individual real estate projects. If you sell your investment, you may be subject to capital gains taxes.
You will incur a 1% fee on the shares you liquidate if you cash out on private eREIT or eFund investments in the first 5 years.
My Fundrise Results
I have been investing in my Fundrise account for over a year. I have seen good returns in my portfolio. $3,000 was put into the long-term growth plan by me. I have reinvested every quarter since the second quarter of last year. I built a portfolio that gives me passive income and allows me to grow my wealth over time.
Check out all the assets/properties that I own a percentage of within the map below:
In 19 months, my initial investment returned $357.56 in dividends. I received a good return on my initial investment.
Pros and Cons
There are some advantages to investing with Fundrise. Before making a decision about whether or not to invest with Fundrise, it is important to evaluate both the pros and cons. We’ll cover the biggest pros and cons here:
Pros:
- Fundrise allows non-accredited investors to invest in real estate with as little as $10. This makes real estate investing more accessible to a larger group of people.
- It is possible to get higher returns in the private real estate markets. Private real estate investments require a larger upfront investment than real estate investment trusts.
- Diversification: It allows for instant diversification, so you are not stuck with one property manager or building project
- Higher Returns: Fundrise investments are harder to access than some short-term investments, paying higher returns as a result
- Income eREITs have quarterly dividends. Passive income can be generated by investors using income eREITs.
- Fundrise has great customer service over the phone and on the website. The Fundrise team is always available to answer questions.
- Fundrise is my favorite platform because of its ease of use. It’s easy to navigate and understand, even for beginners.
Cons:
- If the real estate market is down, it has the right to deny your request to cash out before 5 years or charge a penalty. It is important to consider the risk of investing in real estate before committing to a long-term investment.
- The website vaguely notes that you might incur other fees without clearly defining them unless you dig through each project’s offering circular. Maintenance charges, redemption fees, and other out-of-pocket costs can be included in these fees.
- Fundrise may be too passive for real estate investors who want to get their hands dirty. Passive Investing is a great way to invest without having to actively manage the property, but you should be aware of the potential risks associated with this type of investing.
- A decade isn’t enough time to know how it would perform in a recession or depression. The company’s long-term prospects remain uncertain and this could be a cause for concern.
Frequently Asked Questions
Who is Fundrise best for?
Fundrise could be a good fit if you check the three boxes below:
- Want to diversify into real estate holdings
- Don’t worry about illiquid assets. Before committing your money to a potential investment, it’s important to understand how it will work.
- Favor a passive investing strategy. It is possible to keep your portfolio simple and save time and energy with passive investing.
How do I get my money out of Fundrise?
You are expected to hold Fundrise shares for at least five years, and you may be charged an early exit fee if you leave early. Before making a commitment to invest in Fundrise shares, it is important to consider all of the possible risks and rewards.
The Income Fund and Flagship Fund have no penalties. The funds give investors access to a wide variety of investments. If you cash out eREIT or eFund shares before 5 years are up, you will be responsible for a 1% penalty. Any taxes incurred on the share sale will be your responsibility as well.
Is Fundrise a risky investment?
Fundrise has a history of good returns. It’s important to do your own research when investing in a company. Fundrise is best for long-term investors who don’t need immediate access to their assets. It’s not a good idea for investors looking for short-term profits.
Alternatives
With the help of Fundrise, you don’t have to have a lot of money or time to invest in commercial or residential real estate. You can get access to the same opportunities with a small investment.
The JOBS Act of 2012 made online real estate crowdfunding portals perfectly legal. Hundreds of different real estate portals let accredited investors buy small pieces of many properties at the same time. The portals have made it easier for investors to gain access to a larger real estate investment market.
Alternatives Options:
- RealtyMogul
- Prodigy Network
- iShares
There was a sense of exclusiveness in real estate investing when these portals were not open to the average investor.
Nowadays, that is all changing. Digital media has changed the way people consume content. A few real estate crowdfunding services have popped on the scene that don’t require accreditation and have small investment minimums, but still offer premier investment opportunities to investors, including Fundrise and RealtyMogul. The services allow ordinary investors to gain access to the same real estate investments that have been historically reserved for high net worth individuals, providing a unique opportunity to build wealth and diversified portfolios.
Is Fundrise Worth It?
The Fundrise platform is one of the best in the industry and is one of the first that is open to all investors. It is easy to use and accessible to beginners.
Fundrise is recommended to investors who want to Diversify their portfolios, or to non-accredited investors who want to invest in real estate. Fundrise is one of the most accessible real estate investment options because of its easy-to-use platform.
Considering there’s a $10 investment minimum, you can test the waters before diving in head-first (other platforms require a higher minimum!)
