Fundrise Review 2021 | Features, Pros and Cons

The Fundrise platform is launching an ICO in November, which will allow you to be a part of the investment community. With additional features such as automated rebalancing and portfolio management tools, this is one crypto-backed crowdfunding project that could change your life!

The “fundrise returns 2021” is a review of the company that offers investment opportunities in real estate. It covers the features, pros and cons of investing with fundrise.

For those who wish to build money over time, real estate has long been an attractive investment choice. Many individuals, on the other hand, are unsure about where to invest, what to invest in, or how much to invest. Fundrise comes to the rescue in this situation.

REITs are one of the greatest and simplest ways for investors to enter into real estate (Real Estate Investment Trusts). These real estate investments allow investors to diversify their portfolios while minimizing risk. Fundrise is one of the most popular online real estate investing platforms, making it simple to invest in REITs.

We’ll take a careful look at Fundrise and its features in this review. We also investigate other parts of the platform to see whether it’s worth a shot.

What Is Fundrise and How Does It Work?

Fundrise is an online platform that enables any investor to benefit from the real estate market’s rapid growth. To generate returns for investors, the corporation employs a value investment strategy.

Fundrise, which was founded in 2012, is one of the largest real estate investing platforms available. It was also one of the first platforms to empower ordinary investors by offering low-cost institutional-quality real estate investments. To optimize profits, they employ software and technology to reduce expenses and fees for their investors.

The firm now has over 150,000 investors, has invested in over 5.1 billion dollars in real estate, and has paid out over $100 million in net dividends. Fundrise is a fantastic alternative for investors looking to increase their real estate income, with an average return of 10.1 percent.

Fundrise is the source of this information.

What Is Fundrise and How Does It Work?

Instead of having your money invested for you, you may invest directly in private market real estate via diverse, low-cost portfolios with Fundrise at your fingertips. The technology basically eliminates the middleman, lowering corporate costs and keeping your prices low.

After you’ve chosen your account level, the platform distributes your assets across a variety of diverse funds and REITs that are appropriate for your overall strategy. This implies you don’t have to choose particular REITs or offers. Furthermore, Fundrise is continually acquiring new properties to add to your portfolio, ensuring that you benefit from the high returns that real estate is recognized for.

How do I sign up for a Fundrise account?

Opening a Fundrise account is simple and takes roughly five to ten minutes. Before you may invest on the site, you must first complete the following steps: 

1. To join up, go to the website or download the app and input your e-mail address, password, and personal information such your name, social security number, and birthday.
2. Before choosing an account level and maybe an investment plan, tell Fundrise about your objectives and investment amount.
3. Fundrise assembles a dynamic portfolio of a dozen carefully selected real estate projects that align with your investment plan. 
4. The Fundrise dashboard is then used to track and manage your investments.
5. Watch your portfolio develop as you earn money over time.

Fundrise is the source of this information.

Features of Fundrise

Fundrise provides a slew of features that are ideal for all sorts of investors looking to diversify their portfolios with real estate. 

Minimum investment amounts are low. 

Fundrise is for you if you’re seeking for a real estate investment platform that enables you to start investing with only a few bucks. The $10 minimum first investment is ideal for new investors and those who want to get their feet wet in the real estate market. 

Non-Accredited Investors Can Participate

While many real estate crowdfunding platforms need qualified investors, Fundrise enables almost any investor from the United States (citizens and permanent residents) to invest.

Reinvesting Dividends

The Fundrise Dividend Reinvestment Program (DRIP) allows you to automatically reinvest dividends without incurring any additional fees. This is a fantastic feature since the money you earn may be re-invested to help you earn more.

Self-Directed Individual Retirement Accounts (IRAs)

You may use the site to invest in standard and Roth IRAs held by Millenium Trust Company. While it’s a great alternative for folks planning their retirement, bear in mind that the site charges a $125 yearly fee on top of their regular expenses.

Fundrise is the source of this information.

iPO Fundrise

An “internet Public Offering” (iPO) allows investors to purchase shares in Fundrise’s parent company as an early-stage investment in the firm’s development. The shares are not registered on an exchange and cannot be openly traded, unlike regular IPOs. There are no fees connected with this investment, but it does need a $1,000 minimum.

Investing with a Purpose

Investors with a Basic account level or above on Fundrise may plan long-term (more than five years) investments, such as a significant purchase or retirement, and utilize the goal tracker to check whether they’re on schedule. This feature illustrates how your portfolio may expand over time with consistent investments, capital appreciation, and dividend payments, as well as the measures you need take to get there.

eREITs are available for purchase.

All investors who have joined up for the Core account level or above have access to this service. The eREITs offered by Fundrise are private, non-registered funds that invest in real estate with a particular goal in mind.

Platform that is simple to use

Fundrise accounts are simple to set up and take just a few minutes to complete. The platform and its associated dashboard are intended to simplify and transparently streamline the real estate investment process. 

Fundrise is the source of this information.

Program of Atonement

Investors in Fundrise’s non-introductory eREIT and eFund shares may redeem them early. These redemptions, however, are subject to penalties, which range from 3% if you only retain shares for 90 days to three years to 0% if you keep shares for five years or longer. If you redeem Introduction Shares during the 90-day introductory term, you will get your original investment returned.

Private Offerings Access

Access to specialized private funds that become available on a regular basis is a feature offered only to Premium account holders. Highly illiquid equity funds with varying risk, return profiles, and investment time horizons are examples of such offers.

Account Levels on Fundrise

Fundrise has five account tiers, each with a distinct starting investment amount. After selecting a starting account, investors may quickly upgrade their account to have access to more features, advantages, and investment opportunities. 

Fundrise is the source of this information.

Starter

If you’re a novice investor looking to give Fundrise a try, the Starter account level could be the best option. You may get started investing as little as $10 and have access to the following benefits:

• Options for penalty-free redemption at quarterly intervals
• Reinvesting dividends
• The ability to invest automatically
• Access to items that have been registered
• Fees are eliminated for 90 days for every friend you successfully introduce to Fundrise.

Basic

A $1,000 minimum commitment is required for the Basic account level. It has all of the features of the Starter account level, plus:

• The capacity to set and achieve investing objectives 
• IRA accounts are a great way to invest.
• The ability to use the Fundrise iPO

Core

The Core account level is a popular option for those who want more flexibility and control over their portfolio. The needed first investment is $5,000. All of the following features are included with the Core account, as well as access to: 

• A portfolio approach tailored to your specific investing goals.
• Diversification over a larger number of real estate ventures
• Non-registered products, such as eREITs, are available.
• Advisory costs are eliminated for 180 days for every friend you successfully introduce to Fundrise.

Fundrise is the source of this information.

Advanced

You may invest in the Advanced account if you have at least $10,000. More complicated tactics with a bigger return potential are available at this account level. The following are some of the advantages:

• Access to Plus plans to invest a part of your capital in long-term real estate solutions.
• Investing directly in eFunds
• Advisory costs are eliminated for 270 days for every friend you successfully introduce to Fundrise.

Premium

Finally, a $100,000 first investment qualifies you for the Premium account, which caters to high-end investors. In addition to all of the above listed characteristics, the following are to be expected: 

• The team’s priority support
• The ability to arrange a call with a member of our investing team who is knowledgeable.
• Access to private monies that become available on a regular basis
• Advisory costs are eliminated for 365 days for every friend you successfully introduce to Fundrise.

Fundrise is the source of this information.

Fundraising Techniques

Fundrise employs a mix of real estate strategies with varying degrees of risk and annualized return rates. They are used by Fundrise to “create well-rounded, robust portfolios aimed to provide good outcomes” that are tailored to their investors’ strategy and risk profile. a regular income, Core Plus, Value Add, and Opportunistic are the four strategies.

Fixed Income

By offering real estate-backed loans and inventive financing solutions, the Fixed Income approach strives to create above-market returns. The most cautious of the four techniques is this one. With a total return of 6% to 8% every year, it has the lowest overall risk and the lowest total return. Income investors, on the other hand, may favor this approach since cash flows immediately after the purchase, and predicted income returns range from 6% to 8%.

Core Plus

Core Plus is a moderate approach with a lengthy investment horizon that focuses on stable, cash-flowing real estate. The company’s goal is to acquire high-quality residential and industrial properties at a discount to market value in emerging economies, then enhance value via asset management. Annual returns are expected to range from 8% to 10%. Fundrise also expects to see initial cash flow in six to twelve months, with an annual income return of 4% to 6%.

Value Add

The Value Add Strategy at Fundrise focuses on purchasing affordable residential real estate below replacement cost and investing money to make it more competitive. Growing markets with a lack of affordable rental homes are the emphasis. This risky technique normally yields profits of 10% to 12%. However, it often takes more than a year for cash flows and income returns to vary from 2% to 4%.

Opportunistic

The Opportunistic tactic is the most dangerous. Fundrise seeks for underused buildings in prime locations in the most active areas and renovates them using its in-house expertise. While these projects require the most time and are the most difficult, the potential returns of 12 to 15% make the effort worthwhile. For income investors, this approach is the least appealing since it takes at least two to three years for cash flows and income returns to fall below 2%.

Fundrise is the source of this information.

How Does Fundrise Help You Make Money?

While payments vary per user, the majority of users will get one of two types of payouts: dividends or returns. While dividends are more consistent, returns from an asset’s growing value normally account for a higher portion of your total returns.

Dividends are a kind of income that is paid out (Income)

Dividends are an appealing option for real estate investors since they provide constant cash flow and passive income. They are the earnings from your real estate investments that are distributed to you. 

Fundrise typically pays out dividends to its investors every quarter. Once you activate the function, these payments may be reinvested via the company’s dividend reinvestment plan. Dividends, on the other hand, aren’t guaranteed since they’re anticipated to vary over the year. 

Appreciation of Assets

Your real estate assets may also create income via increase in value, in addition to dividends. While (capital) appreciation often accounts for a larger share of the total return, you must wait until the asset’s investment term finishes before receiving your substantial payout.

In the case of Fundrise, this refers to the amount by which the value of your account rises without any further principle or dividend reinvestments. This differs from typical real estate value appreciation in that Fundrise investors invest in funds rather than individual properties.

Fundrise is the source of this information.

Fundrise Fees and Pricing

A 0.15 percent advisory fee, which may be waived in certain situations, and a 0.85 percent management fee are the only expenses the business charges investors each year. These costs are lower than the standard 0.3 percent advising fee or the 1% account administration fee charged by many financial platforms. 

Furthermore, there are no transaction fees, sales commissions, or costs for activating services for investors. For their involvement on a given project, Fundrise may charge extra development or liquidation fees. 

Fundrise Protection

Your information is secure since the platform employs bank-level security and AES bit symmetric key encryption to prevent hacking and assaults. Furthermore, Fundrise uses HTTPS and TLS to encrypt and protect all connections (Transport Layer Security). Additionally, all investors have the option of enabling two-factor authentication. At the same time, app users may add another degree of account protection by using Face Unlock and fingerprint authentication.

There are also several secure data centers on the platform. It saves all of its data and hosts it on Amazon Web Services, which adds an extra degree of protection.

Customer Service at Fundrise

Unless you upgrade to a premium account level, getting in contact with the firm might be difficult. 

While Premium members get priority assistance and the option to arrange a call, investors in the other four account levels must use the website’s contact form or send an e-mail, with an average response time of one or two business days. 

The platform does not offer a direct contact number to talk with a team member, despite the fact that the website has some excellent tools and FAQs. Regular business hours are 9:00 a.m. to 5:00 p.m. ET.

Fundrise is the source of this information.

Pros of Fundrise

• A $10 minimum investment is required. 
• Non-accredited investors are welcome to participate.
• Dashboard that is simple to utilize
• Your money is automatically diversified via Fundrise. 
• Dividends are able to be re-invested.
• It is possible to invest automatically.
• Fundrise’s first-of-its-kind iPO allows investors to invest in the company.
• Investing in a self-directed IRA is encouraged.
• The redemption program enables investors to sell their shares before they expire.
• Every investor has a different account level.
• Investors who are not accredited may invest in complex techniques. 
• The yearly costs are just 1%.
• Dividends and capital appreciation provide income to investors.

Cons of Fundrise

• Investments in private REITs and funds are very illiquid.
• There are no one-off specials available.
• Investors must do their own due diligence.
• Email is the sole way to contact customer service.

Alternatives to Fundraising

Roofstock and CrowdStreet are two fantastic alternatives to Funrise, which is accessible to everyone. Nonetheless, there is no other choice that is as simple to use and dependable as Fundrise.

Roofstock

Roofstock is also available to everyone and has no investment requirement. Roofstock investors, unlike Fundrise, may invest directly in turnkey single-family rental buildings and use property management services to oversee operations. They may, however, invest in customized portfolios comparable to Fundrise’s private REITs. 

Roofstock allows you to search for available properties and make offers based on your preferences. The portal charges a fee of 0.5 percent of the purchase price or $500, whichever is larger, if your offer is approved. You will get rental money as soon as you own the rental property. You may also use the platform to resell the home and use the proceeds in a 1031 exchange. To discover more, read our Roofstock review in its entirety.

CrowdStreet

CrowdStreet is another way to obtain immediate access to commercial real estate investment possibilities. However, the platform’s investment options are exclusively open to authorized investors. If you match the conditions, you may invest in diverse funds, individual transactions, or a professionally managed investment portfolio using the crowdfunding site.

The minimum investment is a whopping $25,000, which qualifies you for Fundrise’s Advanced account level. If you invest on CrowdStreet, you won’t have to pay any account fees like you would on other platforms, but you will have to pay additional costs that vary from 0.5 percent to 2.5 percent depending on the offer. To discover more, read our whole CrowdStreet review.

Who Is the Best Candidate for Fundrise?

The platform is appropriate for all types of investors, both large and small. Non-accredited investors, in particular, benefit since they are typically unable to participate in other real estate crowdfunding platforms. Furthermore, lowering the investment minimum to $10 will greatly benefit new investors with low account balances. 

Fundrise has a choice of account levels to suit your requirements and enables you to diversify your portfolio beyond stocks and bonds by investing in real estate. The platform is also ideal for long-term investors who don’t mind putting their money in a bank account for more than five years. Even if you need to withdraw money sooner than expected, you may do so with a minor penalty cost.

Fundrise is the source of this information.

Frequently Asked Questions about Fundrise

Despite the fact that we went through Fundrise’s product in great depth, you may still have some questions. We’ve produced a list of the most commonly asked questions and responded to each one. 

Is Fundrise a secure platform?

Multiple bank-level encryption technologies, including as AES, HTTPS, and Transport Layer Security, are used to keep your data secure. Furthermore, investors may safeguard their accounts using two-factor authentication, face unlock, or fingerprint authentication.

Is there a mobile app for Fundrise?

Fundrise is one of the few crowdfunding sites with a mobile app, putting it ahead of the competition. As a consequence, you’ll be able to manage your investments on the move with the same ease as if you were using a web browser.

How Do You Withdraw Fundrise Money?

To get your money off the platform, go to the Fundrise dashboard and submit a redemption request for your shares. You may also observe how long the withdrawal procedure takes there. However, if you haven’t held your shares for more than five years, all early eREIT and eFund redemptions are subject to a penalty. 

What Have Fundrise’s Past Returns Been Like?

Fundrise has a proven track record of generating excellent returns year after year, with an annualized average return of 10.1%. Most investors, however, earn somewhat more or less depending on the eREITs and eFunds in which they invest. Furthermore, real estate returns vary from year to year. Fundrise produced 12.4 percent revenue in 2015, but just 7.4 percent revenue in 2020.

Is it Safe to Invest in Fundrise?

Although no investment is completely risk-free, Fundrise makes every effort to reduce the risk associated with its eREITS and eFunds. Furthermore, since less-liquid real estate is not closely associated with equities or bonds, it performs better in downturns and offers superior protection. 

Is it possible to lose money using Fundrise?

If you redeem your non-introductory shares before the five-year hold term, you risk losing money with Fundrise. This is because you will be subject to a penalty of up to 3%. However, if you lock up your money for five years or more and sacrifice liquidity, you’re unlikely to lose money, since Fundrise has made a positive return every year since its inception.

Last Thoughts

Fundrise is a fantastic tool for anybody looking to make money off of private real estate investments. It is regarded as a forerunner in the industry, having been the first to develop innovative services and products. To fit their existing investment profile, investors may pick from five account tiers.

Fees are cheap, and you may start with as little as $10, which is ideal for first-time commercial real estate investors. Fundrise also enables you to reinvest profits and automatically diversifies your money for you. 

If you’re serious about making money, give Fundrise a go. You may earn money through capital appreciation as well as periodic dividends.

The “fundrise calculator” is a tool that estimates the potential returns on your investment. It takes into account different factors such as your age, risk tolerance, and portfolio size to give you an estimate of how much you can expect to make in the future.

Frequently Asked Questions

Can you really make money with Fundrise?

A: Yes, if youre smart about it.

Is Fundrise a good investment vehicle?

A: Yes, Fundrise is a company that specializes in investing and tracking real estate investments. It has been around for about 8 years and has shown some great gains on its investment portfolio.

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