- Low minimum investment
- Accepts non-accredited investors
- A pool of properties to provide diversified investment
- 90 days money-back guarantee
- Commercial real estate access
- Highly illiquid investment
- Complex investment options
- The fee process is hard to understand
Table of contents
- What is Fundrise?
- How does Fundrise work?
- Features of Fundrise:
- Who is fundrise best for?
- Qualified investors new to real estate
- Fundrise fees
- Potential returns and cashflow
- Is fundrise legit?
- How Fundrise make money?
Real estate investment is one of the safest investments to build your portfolio and grow your money. But most people hesitate to invest in real estate due to high startup rates. Investing with Fundrise solves this problem and offers great benefit for the average person or non-accredited investors. To start investing with Fundrise, you just need $500 to get started. Present stats of Fundrise are following:
This article will provide you a complete guide on how you can invest with fundrise and deep insights into the company overall.
What is Fundrise?
It is an online real estate investment platform or crowdfunding platform that offers investment options for low-budget people and pays back a reasonable amount.
The basic product that fundrise offers are REITs (real estate investment trust). Investors can buy this product by utilizing one of the four following portfolios.
This one is a default portfolio that you get after signing up. It is a low-rise and a low-return option where you can create an account for as low as $500.
This portfolio is used for the supplemental income flow for the investor. It can be achieved through rental income and property value appreciation. Good income source but long-term gain is low.
A highly diversified portfolio consists of property value appreciation and income-generating. Overtime investors can make decent value using this portfolio.
With this portfolio, you can get up to 15% annual returns per year. It consists of properties that give the most significant appreciation with time and it doesn’t offer a regular income stream.
How To Invest In Real EstateReal estate investment simplified
How does Fundrise work?
Fundrise works by utilizing your invested money in acquiring, building, and managing properties. It includes things like single-family homes, apartment complexes, hotels, and shopping centers.
It uses different ways to earn returns:
- By renovating the undervalued real estate property and then increasing the rents or value of the property.
- By collecting rental income
- Collecting interest and holding mortgages
The profit is then distributed among shareholders. Moreover, it is great for long term investors who want to play a big game in real estate.
Features of Fundrise:
It offers different notable features. It gives a couple of different options to invest which include eREITs (the most common method), eFund, portfolios, Self Directed IRA, goal-based investment, and through Fundrise IPO.
Other important features:
- Easy signup process
- Prefund investments are allowed
- VC funding
- Available in all 50 states of America
- Both equity and debt options of investment are available
- Minimum investment as low as $500
Who is fundrise best for?
It is best for:
Novice real estate investors
If you don’t have any experience with real estate investment, you can get started with Fundrise for a little amount like $500
By investing with fundrise, you will lessen the risk chances as your money will be invested in multiple properties. If one fails, you will have other properties to offset the loss.
Qualified investors new to real estate
If you are an experienced investor but do not have enough knowledge about real estate then, you will find a fundrise your true friend.
It guides the new investor and gives them access to the dashboard to monitor the income.
Annually Fundrise charges a 0.85% asset management fee. Additionally, it charges a 0.15% advisory fee. Furthermore, the company charges a miscellaneous fee that adds the total fee to 2%. You can expect to pay up to 3% every year as a fee.
Potential returns and cashflow
On average, every year the platform makes returns between 8.76%-12.42%. For the year 2018, Fundrise came up with a return of 9.11% that means returns of $5.9million in dividends to the investors.
Fundrise also offers reinvestments of dividends that mean your profit or income from the investment will be reinvested back in the company. It will further add up to your investment program.
Fundrise offers a hold period of 5 years or more. In the meantime, your money will just add up and start giving profit after 5 years. It has a limited redemption offer as if you want to sell your shares in the holding period, you will get 97% of the original value. Fundrise cost 3% for early redemption.
Is fundrise legit?
Fundrise is a good option for young investors who don’t have much balance and they can start with a minimum of $500. This company is not best for people who want short term investment. It works with 2-5 years of holding period and people with long-term investment plans can make a good bond with Fundrise.
Investments can be upgraded to one of the three $1000 accounts. It has many features that can benefit potential investors.
You can monitor your funds through account balance and various charts, which makes it ideal for passive investors.
How Fundrise make money?
Fundrise works as a platform for investment in real estate and for itself, it charges 0.85% annually as an asset management fee along with a 0.15% advisory fee.
Fundrise is an inter-linked entity including management, advisory, investment, and a lending company of different shapes and sizes which pays others for getting services. It claims to be a lack of broker fee and commission fee that comes with other REITs which makes the overall fee less as compared to other traditional REITs.
When you want to sell or buy any entity, you would have to pay the fundrise affiliates fee. Up to 1.50% fee is paid on average to the affiliates and it can be reduced by the manager of a company.
Real estate investment is always a long term investment program to get real benefit out of your invested money. If you are serious about doing a long-term investment but you don’t have enough money or you are an early investor, you can entirely trust fundrise with your money starting with a little amount.
You do not need to actively monitor your funds but you have the access to track your investment. fundrise is a less risky, easy to use, and fewer management costs platform as compare to traditional REITs. If it suits you and meets your expectations, it is a good investment option.
This fundrise review is unbiased and has authentic information for you. If you want to do any investment now or in near future, the provided information is all you need to know.