Fundrise Review > Real Estate

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Fundrise Review


What is Fundrise & how does it work?

Fundrise is an online real estate company that lets average — read: not wealthy — investors buy into private commercial and residential properties by pooling their assets (Crowdfunding) through an investment platform. While some online real estate platforms are available only to accredited investors — defined in U.S. securities law as having a net worth of more than $1 million, not including their home’s value, or annual income of at least $200,000 for individuals or $300,000 for a couple — all of Fundrise’s current products are available to non-accredited investors.

The company’s main products are real estate investment trusts, or REITs, which generally invest in income-producing real estate, either through buying and managing buildings or by holding mortgages. These are REITs that don’t trade on a public exchange — they’re highly illiquid. That means there’s no guarantee there will be buyers for investors who want to sell shares. (Fundrise offers a redemption program) Fundrise highlights the online nature of its process by calling its product “eREITs.” Fundrise also offers eFunds, in which investors’ pooled money is used to buy land, develop housing and then sell it to home buyers.

Investors buy into these products via one of four portfolios: Starter, Supplemental Income, Balanced Investing or Long-Term Growth. Fundrise determines the mix of eREITs and eFunds in each plan, as well as the underlying properties. There are significant risks to investing in non-traded REITs — but there can be rewards, too. The average annual return for all Fundrise investments in 2017 was 11.44%, net of fees, assuming dividend reinvestment, according to Fundrise. (Historical returns reflect investment performance as calculated by Fundrise, not necessarily what was paid out to investors. Fundrise assumed a weighted average amount invested in each product; that is, some products were given more weight than others when the average was calculated.)


​Fundrise Fees & Features
Minimum Investment
$500
Fundrise Fees
1% / Year
Accredited Investor
NO
Private REIT
YES
Property Types
Commercial, Residential, & Single Family
Offering Types
Debt, Equity, & Preferred Equity
Secondary Market
NO
Promotions
None
Fundrise Summary
Fundrise is the first service that makes the benefits of private market real estate investing available to you through one simple platform. By combining technology with new federal regulations, Fundrise brings the once-unattainable world of private real estate investments directly to you.

PROS
  • Low Minimum Investment
  • Low Fees
  • Diversification
  • Quarterly redemption and distributions 
  • Passive Investment
  • No Accredidation
  • 90 day satisfaction guarantee 

​Signing up takes about 10 minutes, if that — assuming you’ve already read the lengthy investor disclosures (and you should read those first). You provide your address, phone number and Social Security number, and then choose whether to fund your account via an ACH transfer (i.e., linking your bank account), by entering your bank information on your own or by using a wire transfer. The website is easy to use, but also fairly simplistic. You won’t find tools or calculators, but you can review information about each property in your portfolio.

Real estate as an asset class is a long-term investment. This includes REITs, whether they’re publicly traded, non-traded or eREITs. The opportunities for capital appreciation, portfolio diversification, and regular distributions are alluring; however, distributions are never guaranteed.
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