- Editor Rating
- Rated 4.5 stars
- Fundrise Real Estate Investing
- Reviewed by:
- Published on:
- Last modified:
Savvy individuals put their well-earned money and savings into proper investment vehicles. Deciding what investment vehicles to use can be tricky.
Fundrise is one such option you can consider. They’re a rising firm featured on Forbes, Yahoo Finance, The Wall Street Journal and The New York Times.
Looking for a financial planner? Take a look at SmartAsset, which is free to use.
Fundrise can be considered an automated investing service for the real estate industry. More traditional automated investing services (e.g. Betterment and Wealthfront) work with diversified portfolios of stocks, bonds, index funds, etc.
I’ll review what strategy they use in the investing world.
|Fees||0.85% per year|
Fundrise Promotions: $0 Advisory Fees For 3 Months
I’m not sure how long the offer will continue, but once you’re a customer you can start making referrals and earn 90 days of no advisory fees per referral. As you upgrade your account based on your deposits, your amount of no advisory fee days per referral will increase (e.g. 180 days, 365 days).
Just to your account and you’ll see the option on the sidebar or under the menus.
Using a referral link to sign-up you’ll get 3 months of zero advisory fees.
*Thanks to readers, I’ve earned more years of $0 advisory fees than I’ll ever need. Current and future users are more than welcome to post your referral details in the comments section below. Please use each other’s links and spread the love : )
Here are some referral links posted by readers in the comments section you can use for your initial 3 months of zero advisory fees when you sign-up:
- https://fundrise.com/i/n3x4ze (reader Daniel’s link)
- https://fundrise.com/r/kjxrgv (reader Lucas’s link)
- https://fundrise.com/r/4o1x9d (reader Pankaj’s link)
- https://fundrise.com/r/xox499 (reader Clark’s link)
- https://fundrise.com/r/7z3y0 (my link – I encourage you to use one of the links above as I’ve earned more than enough in zero advisory fees already)
What Is Fundrise All About?
- Fundrise’s trademarked eREITs
From their start in 2012, Fundrise has evolved from the typical crowdfunding form of investment house. If you ever wanted to invest in property, here is a good place to do it. Benefit from less risk than actually buying property outright.
Fundrise has designed a unique process of getting your money into the real estate market. You’ll be investing in eREITs (Electronic Real Estate Investment Trust). They also invest in eFunds or electronic funds.
If you know a bit about mutual funds or ETFs, then eREIT investing will sit better with you. For those not in the know, a mutual fund is where you invest into a program managed by professionals and where the funding comes from the shareholders.
An ETF, or exchange-traded fund, allows funds to be invested and are spread across various vehicles, such as bonds, commodities, and other assets, such as you would find in an index fund. The price changes on a daily basis as they are bought and sold.
What Are eREIT’s Exactly?
With the eREIT there are some fundamental differences from mutual funds and ETFs. The fees are lower, and you do not deal with a broker or intermediary. You deal directly with Fundrise.
As we all know, a broker takes their portion of fees, so this drastically allows Fundrise to reduce the fees due.
What Are eFunds?
Electronic Funds are also exclusive to Fundrise and also are investments in real estate. Unlike the eREIT, eFunds are not publicaly traded. They are also taxed very differently. In fact, you make a savings here, by avoiding double taxation. They are set up as partnerships, and not as corporations.
As with their eREIT’s, you do not accrue broker fees or commissions. The eFunds are generally used for the Growth packages, as they are built better for this goal.
What Are The Fees?
Fundrise charges an annual asset management fee of 0.85% for the eDirect funds (eREITs and eFunds). Clients of the investment services and management system will pay an additional 0.15% annual investment advisory fee.
The founders, among having very strong ideas about providing an investment vehicle for the everyday man, also strongly disagreed with a high fee structure, which oftentimes, ate into the investment.
Fundrise Pros And Cons
|Low minimum investment contribution ($500)||Lack of liquidity as they are not traded on the markets. However, they do offer quarterly distributions and redemptions (they are unfortunately not guaranteed)|
|Less risky than investing directly in real estate||Tax liability – distributions are taxed as regular income, as opposed to the 15% charged on qualified dividends|
|Low fees||In comparison to Index Funds, their fee structure is higher|
|Pre-funded with their own capital||The average investment is less than $10,000, in comparison to other crowdfunding sites like Realty Mogul, which edges on $60,000|
|Big players in the industry back the Fundrise way of investing||Not open to non-U.S. citizens (at least not yet – although they suggest you can make a request if you’re an international client)|
|The deals are quality (and Fundrise only approves 2% of their deals)|
|Their track record is one of the best in the investment industry|
|There is no minimum criteria in terms of your own credentials (i.e. experience, gender, area code, income, etc.)|
|90-Day Guarantee is given to all new investors. What this means is that if you are not satisfied with the rewards gained in the first 3 months, you can close your account and Fundrise will buy your investment back at the original price you paid for it. Please note that there are certain limitations, terms and conditions.|
|Diversity – their spread of real estate options allow you to ensure you smooth out any risk you are not happy with in the mix|
|Accountability Policy – explained in detail below. In short, this is a guarantee that Fundrise offers each and every investor|
Fundrise Investment Options
Every good investment decision begins with a strategy. And, Fundrise has made it easy for you to decide which strategy of theirs will be the best option.
They realize that many of their potential investors will not have the know-how around real estate or even around investing, so they have provided a nifty and easy to use calculator. All you have to do is answer the questions posed to you and the calculator will give you the best strategy package based on those questions.
In addition, Fundrise promotes Goal-Based Investing:
- Income Only
- Income and Growth
- Growth Only
The portfolio strategies on offer are three great choices, giving you real diversity:
|Supplemental Income (Create an attractive, consistent passive income stream)|
|Should you be looking to supplement your income, this is a great way to do it. Targeted at those getting near to retirement, or for those just wanting some additional income, the Supplemental Income package is actually what I chose for my initial investment with Fundrise (more on this below). This package won’t yield the highest returns over the long term.|
You’ll find low variability, a decent time horizon for growth, and a passive income offering in this package.
|Balanced Investing (Build wealth confidently with the maximum level of diversification)|
|Objective: Income & Growth|
| If your aim is to build on what you already have, the Balanced Investing package is ideal.|
Expect to leave your investment in for a moderate to long term period, and be open to many diverse avenues on the investment pickings. There are minimal risk factors with this investment package.
|Long-Term Growth (Pursue maximum overall returns over the long term)|
|This is the package where you need to leave your money and not think about it. The Long-Term Growth package is built for the person that only wants to withdraw after a very long period of time. The results over this time will typically be better, but patience is the key here. Your investment is gauged into aggressive risk portfolios in the real estate market, and you will see many ups and downs as the years go by.|
My Update After Just 4 Months With Fundrise
As I stated above, I decided on the Supplemental Income investment plan. This plan will provide me a consistent passive income stream, albeit at a typically lower return than their other longer term plans. $10,000 was my initial investment in early April of 2018. I must say, I am fairly pleased with the results so far. With a rough calculation, I am getting a return a bit under 8% annually as of this update in August of 2018. If I do decide to invest further with Fundrise, I’ll likely change to either the Balanced Investing or Long-Term Growth package.
In conclusion, given all the facts, I am quite impressed with Fundrise’s formula and unique offerings.
Are you the right candidate for investing in Fundrise? Well, if you can afford a minimum of $500 to invest, are a U.S. resident and are over the age of 18, you can certainly get started. Their typical investor is in the 30 to 40 age bracket and invests around $15,000 on average. If you do live outside the U.S., you can certainly contact Fundrise to determine eligibility. Simply pop them an email to see what they can do for you.
I suggest you take some time in reading about Fundrise online. Sip some coffee while you go through a few of their interesting articles, and then give them a try when you’re ready.
The information contained herein neither constitutes an offer for nor a solicitation of interest in any securities offering; however, if an indication of interest is provided, it may be withdrawn or revoked, without obligation or commitment of any kind prior to being accepted following the qualification or effectiveness of the applicable offering document, and any offer, solicitation or sale of any securities will be made only by means of an offering circular, private placement memorandum, or prospectus. No money or other consideration is hereby being solicited, and will not be accepted without such potential investor having been provided the applicable offering document. Joining the Fundrise Platform neither constitutes an indication of interest in any offering nor involves any obligation or commitment of any kind.The publicly filed offering circulars of the issuers sponsored by Rise Companies Corp., not all of which may be currently qualified by the Securities and Exchange Commission, may be found at www.fundrise.com/oc.
|OFFER LINK||OFFER||OUR REVIEW|
|Chase Total Business Checking®||$300 Cash||Review|
|Chase Premier Plus Checking℠||$300 Cash||Review|
|Chase Total Checking®||$200 Cash||Review|
|Bank of America Checking||$100 Cash||Review|
|TD Bank Beyond Checking||$300 Cash||Review|
|HSBC Premier Checking||$450 Cash||Review|
|HSBC Premier Checking||Up To $600||Review|
|HSBC Advance Checking||$200 Cash||Review|
|HSBC Advance Checking||Up To $240||Review|
|You Invest℠ by J.P. Morgan||Up To $725||Review|
|Ally Invest||Up To $3,500||Review|
|Betterment||1 Year Free||Review|