Fundrise Review 2022: The Best Way To Start Real Estate Investing

Do you want to start investing in real estate, but don’t have the money to do so?

You don’t need to be really wealthy in order to invest in real estate nowadays.

Yes, really!

There are other ways that you can invest in the commercial real estate world without actually buying a house.

Today we are going to do a Fundrise review and find out all about whether it’s a good idea to invest with them or not.

Let’s go!

What Is Fundrise?

Fundrise is a crowdfunding investment platform that has been set up as an easy way for people to invest in real estate.

It was founded in 2010 by brothers Ben and Dan Miller and has been called the first company to successfully crowdfund investment in the real estate market.

They’re set up so that the average person can make investments in real estate. Real estate investment has historically been only for the very wealthy. 

But not anymore! It’s time for you to get in on real estate investment funds and other investment opportunities that can make you money!

So, is Fundrise legit? Oh yes, it is!

So let’s talk about what Fundrise is and why you should get on the platform today!

Who Is Fundrise For?

Fundrise is

• long-term investors
• investors who are looking to diversify their portfolio- aka having more than stocks and bonds
• hands-on investors, those who will do the research and some leg work to invest wisely

How Does Fundrise Work?

Fundrise IPO has two main investments that you can invest in:

• eREIT (electronic real estate investment trust)
• eFund (electronic real estate fund)

The eREITs investments are by buying or managing buildings or having mortgages.

The eFunds are when your money (and other investors’ money) is used to buy land, which houses are then built on, and then they are sold on to the home buyers.

As a Fundrise investor, you will be buying shares of the eREITS or eFunds by buying one of the portfolios available on Fundrise:

• Starter
• Supplemental income
• Balanced Investing
• Long-term growth

Fundrise will choose which mix you will have in each Fundrise plan, based on what your goals are.

Fundrise Features

The Fundrise website is easy to use and sign up to – it should only take a few minutes to sign up

Let’s have a look at some of the features:

Low minimum investments

Low initial investment. A lot of people want to invest early in real estate, but don’t have the capital in order to start buying a lot of different properties. Fundrise offers the chance to invest for a low initial investment.

Passive Investments

If you are looking for real estate investments, this typically isn’t very passive, however investing in eREITs is passive. Meaning your investments are more hands-off once you’ve got your money dedicated in your portfolio.

Open to nonaccredited investors

Available to non-accredited investors. A lot of investment companies are only available to accredited investors who have a net worth of at least $1 million or an annual income of $200,000 ($300,000 for couples)

Interval Fund

The Fundrise Interval Fund is for those looking for more liquidity in their investments, plus Fundrise investors have more assets and higher diversification. 

Investing With Fundrise

Starter Portfolio

To get started on Fundrise, you simply need $10. That’s it!

If you start with the Starter Portfolio, you can use $10 to invest in U.S. real estate opportunities. 

Just like other investments, you’ll get quarterly returns from whatever you invest in, typically a mix of eREITs and eFunds, and you’ll get money from appreciation from your share values.

Basic Level

At the Basic Level, you start with $1,000 investments, which is a pay bump, but you also get access robo-investing, IRA investing, Fundrise IPO investing, and more.

The larger investment minimum means more investment chances, and more investments mean you have more opportunities to get higher returns on investment.

Core Plans

Next up, you’ve got the Core Plans, which have a starting investment of $5,000. There are 3 Plans: Supplemental Income, Balanced Investing, and Long-Term Growth. 

Each comes with more investing plans and strategies to aid you in getting more money from your portfolio. Each plan has an expected return rate, so it may be something you’re interested in if you want more certainty from your investments. 

Advanced Level

The Advanced Level is another step up, with a minimal requirement of $10,000, and it offers the same features as the Core Plans in addition to investing in more complex and advanced real estate funds.

Premium Level

This last level is a biggie, as the Premium Level requires investors to have a minimum of $100,000. You can start with the Start Protfolio and then switch to Premium for no cost, but you have to be an accredited investor for this level.

As you may expect, this level gives you access to everything from everywhere else, plus you can be involved with Fundrise’s investment teams.

Fundrise IPOs

Not only can you get involved in real estate, but you can also invest in Fundrise by buying shares of the company if you’ve for a Core account. 

Fundrise Pros & Cons

Pros

• Available for the average investor, instead of being only for the very wealthy
• Low minimum initial payment amount to get started
• Minimal requirements to sign up (just need to be over 18 and a U.S. citizen)
• A way to get involved in real estate investments without having to actually purchase a property
• The investments are available to non-accredited investors
• The Fundrise fees are quite low

Cons

• $500 initial payment may be too much for some people, and this is only for the Standard plan
• You need to keep your money in there for at least 5 years
• The fees may be confusing to some (be sure to read through it all before signing up)
• The investment is illiquid. You aren’t able to cash out easily because of this

Who Can Use Fundrise?

Real estate investing has always seemed like something that only the very wealthy could participate in.

We love that there are more and more companies set up with an average participant in mind.

Not everyone will be able to buy multiple properties – there needed to be an option for those who couldn’t buy another house – and that’s where Fundrise stepped in.

So, who is Fundrise for?

Well, to start with, the requirements to invest with Fundrise are to be a U.S. citizen and at least 18 years of age.

FAQs For Using Fundrise

Is Fundrise a scam?

No, Fundrise is not a scam! We wouldn’t recommend an investment opportunity to you if it was a scam!

Fundrise is an SEC-regulated platform that is a safe app to invest in commercial real estate.

Are Real Estate Investments a Good Fit for YOU?

On the Fundrise site, they say that you need to be prepared to invest for a minimum of at least 5 years.

Real estate investing isn’t a get-rich-quick scheme. Like most investments, the longer you leave it, the better you tend to do.

The reason for this is that it is an illiquid asset. This means that cannot be easily sold – so you won’t be able to cash out any profit that you make straight away, unlike some other investments.

Something else to bear in mind is that there is a minimum starting investment of $500 for the Starter plan (it’s more for the other plans).

Real estate investing is something that you can consider if you are looking for long-term investments and won’t need the money back quickly.

Can You Really Make Money With Fundrise?

Yes, you can make money with Fundrise. There are 2 ways that you can get payouts from Fundrise, which are:

• Quarterly dividends
• Appreciation in asset value

Fundrise has said that in 2019 the average annualized platform Fundrise returns were 9.47%, which is based on reinvesting back into it.

They seem to be quite consistent over the years but it’s worth remembering that it is an investment which means that there is no guarantee.

What Does Fundrise Cost? What Are The Fees?

There are several types of fees to bear in mind when it comes to Fundrise:

• 0.15% annual investment advisory fee
• 0.85% annual asset management fee

You will need to have a minimum of $500 in order to start investing on the Fundrise platform – more if you want to use one of their other plans.

Fundrise Alternatives & Fundrise Competitors

Fundrise isn’t the only real estate crowdfunding platform out there, so if you want to look for other options you could take a look at:

• Equity Multiple
• Realty Mogul
• RealtyShares
• Patch of Land
• PeerStreet
• Roofstock

When you are looking into alternatives, make sure that you look at the fees on the platform and also the minimum investment required.

The thing that we love about Fundrise, in particular, is that the minimum amount that you need to start is only $500, which is a lot less than the other platforms.

Final Thoughts On Fundrise

If you are interested in investing in real estate but don’t have the capital to purchase a property off the bat, then investing with something like Fundrise is a good option.

There are other companies out there that you can use for the same thing, but the great thing about Fundrise is that you can have such a small amount to start with.

There are similar companies out there where you need $5000 to invest with them, but with Fundrise you only need $500 to start with their Standard plan.

We think that if you are looking to get started investing in real estate, looking at eREITs and similar is a really good option.

If you don’t have a lot of money to start with, then Fundrise could be a good option for you.