When it comes to investing, I’m always looking for something different and new. A few years ago I came across a site called Funrise.com. I’ve always been interested in owning real estate and at the time had yet to buy my first investment property. Fundrise seems like a good way to break into the industry, and I was right. Since then I’ve seen good returns with almost no work done on my side. Truly passive real estate investing at it’s finest. Here is my review of the last four years investing with Fundrise, but first a bit of background information.
What is Fundrise?
Fundrise is an online commercial real estate crowdfunding platform that allows everyday investors to get in on investments that would otherwise but unavailable to them. Commercial real estate is typically limited to investors with huge amounts of capital and knowledge. Think of massive apartment complexes, offices, strip malls and other non-residential buildings. Most of the investments on fundrise cost millions which most of us don’t have lying around. By crowdfunding these investments, Fundrise is getting more investors into this lucrative market.
What Types of Investments Does Fundrise Make?
As noted, Fundrise typically deals in commercial real estate. Each of its investments are well-vetted and using their proprietary software, Fundrise identifies opportunities that are typically undervalued and typically very safe. From their website:
“We follow a “value investing” strategy of acquiring assets for less than what we believe is their intrinsic value, and typically less than their replacement cost. Our team then works to increase the value of each asset over time through hands-on management and in partnership with local operators.”Fundrise.com
What this means is that Fundrise is not playing fast and loose with your money. They are making wise and sound investments while still seeing high returns.
How Long Has Fundrise Been Investing?
Fundrise has been investing with its eREIT ( electronic Real Estate Investment Trust) since 2015. Since then it has seen some of the best returns from any real estate investment trust.
Who Can Invest With Fundrise?
Unlike other commercial real estate sites and funds, Fundrise is open to any one that is a U.S. citizen, at least 18 years of age and has $500 to invest. You don’t need to be accredited or have any previous experience when it comes to investing.
How Can I Get Started?
You can start investing with Fundrise by opening an account on their website, Fundrise.com.
Depending on how much you invest will change a few options that are available to you.
Basic Plan($1000 Invested)
Their basic plan will allow you to start investing your money right away. You don’t need to pick investments as it is all done for you. With the basic plan come automatic investing options, dividend reinvestment plus the ability to make and change your investment goals.
Core Plan($5000 Invested)
The core plan builds upon the basic plan with a few more features. You’ll gain access to more eREIT funds plus you can now choose one of three investing strategies. You can have your investments focus on being growth oriented, dividend oriented or a balance between the two.
With the advanced account level, you’ll gain the ability to choose specific funds for your portfolio to invest in.
Getting to the premium account leve will give you direct access to the fundrise investment team and access to exclusive investment opportunities.
What Are Their Fees?
Most investors will be charged an annual .15% advisory fee, plus an additional .85% asset management fee for most of their portfolios. This comes out to be an overall fee of 1% or $10 for every $1000 you’ve invested with Fundrise.
How Do I Make Money?
So of course the main goal of any investment is to make money. Fundrise will make money in the same fashion as any other real estate investment. Depending on the type of investment, you will earn money through rent, interest on a loan or by selling properties at a higher value than you bought them. Fundrise will do all the work for you and pays your account with quarterly dividends accordingly.
Obviously, we want to know how well Fundrise performs. Below are my yearly returns:
As you can see my returns have ranged from about 6.8%-8.9% on any given year. As far as passive income goes, that’s pretty good in my opinion. It should be noted that my portfolio is in long-term growth. At the same time, my quarterly dividends have tacked on about another .3 -.4% in revenue bringing my returns up about 7% and 9% respectively.
How to Get Money Out
I honestly don’t know how to get money out of Fundirse and I don’t want to. Kidding aside, there are options when it comes to redeeming your shares. Under your account setting Fundrise will offer a “Redemption Request’. Based upon your investments and how long you’ve been invested will change your options on getting your money out. Since this is real estate, the investment is typically illiquid and even with the requests, it can take several months to get all your money out.
The Website is Great Too
On top of being a great investment, Fundrise’s website makes it easy to understand everything that is going on. The company is very transparent with your investments. Logging into your account will show you a breakdown of the funds you are investing in, the specific real estate in your portfolio and easy to use breakdowns of all kinds of other information. Fundrise’s website is super easy to use and you’ll easily find what you’re looking for. If you want to change strategies, find dividends or update any personal information, it won’t take you long.
Fundrise is a quick and easy way to start investing into real estate. With a very good investment strategy, killer website and awesome returns, there’s no reason not to start putting some of your investment funds with them. You don’t need a lot to start and the more you invest, the better it becomes. My goal is to get into that Premium account level! If you haven’t already done so, check out the site and you won’t regret it.
Jeff is a fan of all things finance. When he’s not out there changing the world with his blog, you can find him on a run, a Mets game, playing video games, or just playing around with his kids.