Real estate crowdfunding platforms are meant to open the doors for the average Joe to get into real estate investments, such as REITs. While becoming more popular in recent years, many companies have emerged with offerings designed to appeal to investors seeking a low barrier to entry.

Fundrise is one of the leaders of this REIT market. In addition to sharing what unique traits this company has to offer, and historical funds data, this review will provide the most up-to-date BBB rating and need-to-know factors so you can determine if it’s a good fit for your portfolio and your wallet.

~ Some of our articles may contain affiliate links. For more information, see our Disclosure Statement.

What is Fundrise? (Review)

commercial real estate investment options
My Fundrise QUICK-LOOK Review

Company Name: Fundrise

Company Website: https://fundrise.com/

Founders: Ben Miller, Dan Miller

Minimum Investment: $500

Investment Term: 5 years (early redemption plan info below)

Account Fees: 1% annually for combined asset management and investment advisory fees

Annual Yield: between 8.7% – 12.4% since 2014

Property Types: multi-family / multi-tenant apartment and business buildings with cash flow

Accolades: The New York Times, Forbes, Wired, Tech Crunch


Compare your REIT options. Read this article: What is stREITwise (Review) Should You Invest?


The Modern World of Real Estate Investing

Gone are the times when only wealthy individuals and businesses could invest in real estate. Companies like Fundrise are making it easy for anyone to add real estate to their portfolio. With low initial investment requirements, low account fees, no broker fees, and higher than average annual yields, crowdfunded real estate investing offers great opportunity to diversify and earn with generally low risk involved.

The traditional vs the modern investment portfolio

My Fundrise FULL Review

About Fundrise

Fundrise launched their first online real estate investment offering in 2012, with the intention to redefine the way that people invested in real estate by focusing on 3 Key Ideas:

  • lowering costs
  • improving quality
  • broadening access

By cutting out brokers, and therefore broker’s fees, costs are reduced. By building expert-managed, well-diversified real estate portfolios of income-producing and appreciation potential commercial properties, quality is improved. By offering a start up account with a minimum investment amount of $500, access is broadened to more investors than ever before.

The Fundrise REIT Plan Options

An Affordable Way to Get into Real Estate:

By offering low start-up investments, crowdfunded REITs present income and growth opportunities in the real estate sector to the masses. Fundrise leads the way with not only one of the lowest initial investments available at $500, but with the most REIT options available.

The Details on the Fundrise REITs:

There are currently 4 REIT Plans to choose from! One Starter plan, and 3 Core plans.

1. The Starter Portfolio

  • $500 initial investment
  • approximate 5 year term
  • this is a 50 / 50 growth and income portfolio
  • comprised of 5 to 10 real estate properties diversified into the following:
    • Income eREIT 2019 – 50% of portfolio
    • Growth eREIT 2019 – 25%
    • Growth eREIT – 25%
  • currently returning quarterly dividends and periodic cash dividends from sales
  • 90 Day Satisfaction Period
  • Free upgrade to a Core Plan (the 3 plans below) when your investment is $1,000 or more

2. The Supplemental Income Plan (Core plan 1)

  • $1,000 initial investment
  • approximate 5 year term
  • this is an income-oriented plan
  • comprised of 51 real estate properties diversified into the following:
    • Income eREIT 2019 – 75%
    • Income eREIT – 10%
    • East Coast eREIT – 7.5%
    • Heartland eREIT – 7.5%
  • currently returning quarterly dividends through interest or rental income, and share appreciation
  • 7.8% – 9.3% projected annualized return
  • 90 Day Satisfaction Period

smiling woman wearing glasses

3. The Balanced Investing Plan (Core plan 2)

  • $1,000 initial investment
  • approximate 5 year term
  • this is a balanced income and growth oriented plan
  • comprised of 63 real estate properties diversified into the following:
    • Growth eREIT V – 40%
    • Income eREIT 2019 – 35%
    • East Coast eREIT – 7.5%
    • Heartland eREIT – 7.5%
    • Growth eREIT – 5%
    • Income eREIT – 5%
  • currently returning quarterly dividends through interest or rental income, and share appreciation
  • 8.7% – 9.8% projected annualized return
  • 90 Day Satisfaction Period

4. The Long-Term Growth Plan (Core plan 3)

  • $1,000 initial investment
  • approximate 5 year term
  • this is a growth-oriented plan
  • comprised of 42 real estate properties diversified into the following:
    • Growth eREIT V – 75%
    • Growth eREIT – 10%
    • East Coast eREIT – 7.5%
    • Heartland eREIT – 7.5%
  • currently returns small dividends with focus on appreciation value over time
  • 9.4% – 10.3% projected annualized returns
  • 90 Day Satisfaction Period

Account Minimum Investments:

With the Starter Portfolio, you can invest as little as $500 to get started.

With any of the other 3 Core Plans, the minimum initial investment is $1,000.

The Potential Return:

The average since 2014 is 10.8%. (between 8.7% – 12.4% since 2014)

Click to view all of the REIT Circulars for SEC filed information.

Must-know Investment Information:

Due to the nature of a REIT investment, and one of the goals being increased appreciation value, these are meant to be long-term investments.

However, Fundrise has implemented a limited Redemption Plan, whereby an investor can request a redemption of funds.

After an investor’s redemption request is filed, there is a 60-day waiting period, then the investor may obtain monthly redemptions.

Redemption Plan Details:

  • 90 days to 3 years – 97%
  • 3 – 4 years – 98%
  • 4 – 5 years – 99%
  • More than 5 years – 100%

So, if need be, you can request a premature redemption of your investment at any time, at the discounted amount stated above. The remainder is held as a fee, not to be paid to Fundrise, but to be added to the distribution to remaining shareholders.

The 90 – Day Satisfaction Period:

If for any reason you are unhappy with your investment in Fundrise, you can request a full refund within the allowed 90-day satisfaction period, and you should receive your full initial investment amount.

After the 90 days, the return policy is as stated above in the Redemption Plan.satisfaction guarantee label

Four (4) Available Account Levels

Aside from the Starter and Core Plans detailed above, Fundrise offers 2 additional Account levels: Advanced and Premium.

As my focus with this section of our website is primarily to provide options for the everyday investor, I won’t go into great detail with either of these plans. Here are the basics…

The Advanced Account Level:

  • Minimum Initial Investment of $10,000
  • Investors have the choice to opt-in to “Plus” versions of the plans, which include additional properties and offer a potentially higher return (with potentially higher risk)

The Premium Account Level:

  • Minimum Initial Investment of $100,000
  • Fairly new Account level that provides the benefit of receiving a full year of advisory fees waived for every person referred to Fundrise. (the other levels are 90 or 180 days for a referral)

The Fundrise iPO – An interesting move

As if Fundrise didn’t have enough to offer interested investors with their 4 REIT options, they also have a first-of-it’s-kind iPO.

What’s an iPO? An internet Public Offering.

This gives long-term Core Plan investors the opportunity to invest in Fundrise’s parent company, Rise Companies Corp. (Yes, you first have to be a Core Plan investor)

How is this different from a traditional IPO?

These shares are not listed on any exchange or publicly traded. If eligible, you will receive an email invitation to buy shares directly. Returns on investment (if any), will be determined by the long-term performance and value of Fundrise.

Why this is interesting, is that besides the (usual) possible loss of investment, there is NO estimated return on an iPO investment, because that would mean that Rise Companies Corp either moves forward with a traditional IPO on a stock exchange, or sells the company.

Hmm, so they have essentially planned to either go public or sell at some undetermined point in the future. What does that mean for the Fundrise REIT investors?

I spoke with Samson Akinfenwa at Fundrise to get the answer to that question. His response:

“Our offerings – eREITs and eFunds –  are separate legal entities and are not wholly-owned by Fundrise. Each offering shares are unique and not the same as the Fundrise iPO shares. Hence, if Fundrise iPO goes public, it’s unlikely our real estate offerings themselves would go public too since the reason we created this platform was to provide investors the opportunity to invest in private-market REITs.”

So, at this point, rest assured they plan to keep their REIT offerings off of the public stock exchange.

Back to those REITs…

What the Fundrise REITs have to Offer

  • DIVERSIFICATION
    • an alternative to the volatile stock market with historically higher return potential and inflation hedge
  • LOW MINIMUM INVESTMENT
    • $500 minimum initial investment for Starter Portfolio
    • $1,000 minimum initial investment for Core Plans (Supplemental Income, Balanced Investing, Long-Term Growth)
  • NO BROKER FEES
    • However, there are account management fees as described at the top of this article
  • PROFITABLE TRACK RECORD
    • They have been profitable and paid out dividends since inception
  • CUSTOMER SATISFACTION
    • 4.9 stars by investors on BBB, Google, and TrustPilot
    • Acclaimed by The New York Times, Forbes, Wired, and Tech Crunch

What Does the BBB Have to Say?

Fundrise has been filed with the BBB since 2014, and Accredited since 2016. They currently hold an A+ rating. To instantly check their current status, you can visit the BBB’s website.

The PROS and CONS

Overall, Fundrise has a very aesthetic and user-friendly website. It’s very easy to navigate between the most important topics which are: Why Fundrise, and What are the Investment Options. You can read the details of each REIT and view historical performance. Here are the pros and cons…

PROS:

  • A+ BBB Rating
  • Low minimum investment amount of $500
  • Investor-friendly Redemption Plan
  • Broad diversification of properties in each REIT
  • Track record of 8.7% – 12.4% annualized returns

CONS:

  • Possible additional fees not mentioned. According to some investor reviews, there have been additional fees periodically. I wouldn’t call them ‘hidden,’ so much as ‘not in plain sight.’ They are briefly mentioned in the FAQs pages, and explained as required by law in the circulars.

NOTE: I won’t add it as a pro or a con, but simply a note to keep in mind the unique dynamic here of REIT offerings as well as an iPO offering, which indicates likeliness of going public or selling in the future. It’s been confirmed that the REITs should remain private, and Fundrise’s ultimate goal is to bring investors additional profits. It’s just currently unknown as to what path they’ll travel to get there.

How Do You Become a Fundrise Investor?

You Can Get Started in 5 Easy Steps:

1. Click on the “Get started” button

2. Select your desired Investment Plan

Note: you can NOT change plans once you invest, or have more than one plan at a time.

3. Create Your Account

Complete your personal profile including name and email address.

4. Make your Investment

Enter an amount at or above the initial investment amount.

5. Sign the Investor Agreement


* Disclaimer – BYIO is not providing investment advice. BYIO is not promising a return on your investment. BYIO suggests you consult with your financial professional, or make sound judgment on your own, when debating investing in Fundrise or any other online investment company. We’ll keep sharing what information we have, and we hope you make a lot of money!


Some Fundrise FAQ’s

1. Why Fundrise?

The only company with a 90-day Satisfaction Guarantee. If you’re not happy for any reason, they will buy back your shares and return your initial investment amount at 100%. They offer one of the lowest initial investment plans.

2. Can I switch plans after I invest?

No. You can not transfer your funds from one plan to another. Additionally, you can only invest in ONE plan at any time.

3. Can I invest more money after my initial investment?

Yes. You can invest additional funds at any time from your Fundrise Account Dashboard. The minimum additional investment amount is $100.

Fundrise also offers auto-invest. You can set up recurring monthly, or twice monthly, investments of $100 or more.

4. Can I reinvest my dividends instead of taking the distribution?

Yes. You may opt-in to reinvest your dividends from your Fundrise Account Dashboard.

5. Can I contact somebody at Fundrise if I have a question before investing?

Yes. Here is their Contact Information:

Address: 11 Dupont Circle NW, 9th Floor, Washington, DC 20036

Phone Number: (202) 584-0550

Email: contact@fundrise.com

You can also find them on these social media platforms:

Facebook | Instagram | Twitter | LinkedIn

Who are Fundrise’s Competitors?

DiversyFund

Click to read our DiversyFund Review. Minimum initial investment of $500, but no early redemption plan.

Realty Mogul

Click to read our Realty Mogul Review. Minimum initial investment of $5,000.

stREITwise

Click to read our stREITwise Review. Minimum initial investment of $1,000, and check out their early Redemption Plan!

CrowdStreet

Click to read our CrowdStreet Review. ACCREDITED INVESTORS ONLY. Minimum initial investment is $25,000.

Rich Uncles

Click to read our Rich Uncles Review. No minimum initial investment required.

There are many real estate crowdfunding companies available to choose from. We’ll keep reviewing, and updating as necessary. We hope you find the right company to meet your goals!


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