Fundrise Performance and Real Estate Investing

Fundrise has consistently delivered strong performance since its inception in 2012. With a focus on eREITs, the platform has provided investors with a unique opportunity to invest in a diversified portfolio of properties.

Fundrise's eREITs have historically outperformed traditional REITs, with a 10-year annualized return of 12.3% compared to 8.9% for traditional REITs. This is a significant difference, especially considering the lower fees associated with Fundrise.

Investors have been able to generate strong returns through Fundrise's eREITs, with a minimum investment requirement of just $1,000. This makes it an accessible option for those looking to get involved in real estate investing.

Fundrise offers a diversified investment portfolio with a mix of eREITs and eFunds, allowing investors to spread risk and increase potential returns. This approach enables investors to benefit from the stability of eREITs, which invest in a portfolio of properties, and the flexibility of eFunds, which invest in a diversified pool of eREITs.

By investing in Fundrise, you can potentially earn a steady income through quarterly distributions, with an average annual return of 8-12% over the past 5 years.

REITs can provide a way for private investors to speculate in real estate without the need to own, manage, or finance properties, offering attractive dividend yields and the potential for capital appreciation.

Fundrise offers four portfolios with the same fees: 0.85% in annual management fees and 0.15% in annual advisory fees, totaling 1% annually.

Miller, the company's founder, claims Fundrise delivers the same asset at a lower cost by "drilling through all those layers" of fees, allowing individual investors to access private market assets at a price comparable to institutions.

Fundrise's model is built around a super-low-fee approach, aiming to provide investors with a cost-effective way to deploy into real estate.

Here are some benefits of using Fundrise:

REITs can provide a way for private investors to speculate in real estate without the need to own, manage, or finance properties.

They typically offer attractive dividend yields.

Investors can benefit from the potential for capital appreciation.

REITs offer diversification, which can be a major advantage in a portfolio.

High dividend income is another key benefit of investing in REITs.

Liquidity is also a benefit, as REITs are required to provide regular financial reports to the SEC.

Transparency is another advantage, thanks to SEC requirements.

Fundrise has consistently delivered strong returns, especially during times of market volatility. Their track record, as of August 2024, shows a cumulative time-weighted return, taking into account both appreciation and dividends.

In 2020, Fundrise held steady during the worst of the downturn in March, closing up 7.42%. This is impressive, considering the S&P 500 declined significantly during that time.

Fundrise's five-year average platform portfolio has yielded a 10.79% return, outperforming the Vanguard Total Stock Market ETF (7.92%) and the Vanguard Real Estate ETF (7.4%).

Here's a breakdown of Fundrise's performance in previous years:

2021 was an outstanding year for Fundrise investors, with returns ranging from 17.98% to 25.12% depending on the investment plan objective. The Flagship Interval Fund performed exceptionally well, returning 28.1% after just a year in operation.

In 2022, Fundrise returned 1.5% overall, significantly outperforming Public REITs (-25.10%), Public Stocks net of dividends (-18.11%), and Bonds net of coupon payments (-11.99%).

Fundrise offers a range of investment plans, with a minimum investment of just $10. You can choose from a starter plan or one of the four other plans, which have minimum investments of up to $100,000.

The company's investments have returned 1.5% to investors in 2022, and -3.21% in the first three quarters of 2023, with 1.0% annual fees. This compares favorably to publicly traded REITs, which returned -25.10% and -5.17% in 2022 and the first three quarters of 2023, respectively.

You can invest in various types of funds through Fundrise, including eREITs, eFunds, Flagship Real Estate Fund, and Innovation Fund. Additionally, you can choose from taxable accounts, traditional IRAs, Roth IRAs, and SEP IRAs.

Here's a summary of Fundrise's fees:

Fundrise offers four investment portfolios, each with its own unique characteristics. These portfolios are designed to cater to different investment goals and risk tolerance levels.

The Starter Portfolio has a minimum investment requirement of $10. The Supplemental Income plan, Balanced Investing plan, and Long-term Growth plan also have a minimum investment of $10. These plans have an advisory fee of 0.15% and a management fee of 0.85%.

Investors can choose from a range of investment options, including eREITs, eFunds, Flagship Real Estate Fund, and Innovation Fund. Fundrise is open to non-accredited investors, making it a more accessible investment platform.

Here are the details of Fundrise's investment portfolios:

For those looking to invest in a retirement account, Fundrise offers an IRA option with a minimum investment of $1,000. This option comes with an annual fee of $75 per eREIT, capped at $125 annually.

Fundrise offers a range of investment options, including eREITs, eFunds, Flagship Real Estate Fund, and Innovation Fund.

The minimum investment with Fundrise is just $10, making it accessible to a wide range of investors.

Investors can choose from taxable accounts, traditional IRAs, Roth IRAs, and SEP IRAs to suit their needs.

Fundrise's fees are 1% total, consisting of an 0.85% asset management fee and a 0.15% advisory fee, with additional fees possible.

Investors should be aware that Fundrise's investments are illiquid, meaning they can't be easily sold or traded.

The company offers quarterly dividend payments, which can be reinvested via a dividend reinvestment plan (DRIP).

Fundrise also offers custom investment plans with its Fundrise Pro service, available for $10 per month or $99 per year.

Here are the key investment options available with Fundrise:

Fundrise's low $10 investment minimum makes it an attractive option for those looking to get started with real estate investing. This low barrier to entry can be especially beneficial for those who are new to investing or want to diversify their portfolio without breaking the bank.

The platform offers broad diversification among investment plans, allowing you to spread your risk and potentially increase your returns. This can be a major advantage for those who want to minimize their exposure to any one particular investment.

Fundrise's transparent platform is also a major plus, providing you with clear and concise information about your investments. This transparency can help you make informed decisions about your portfolio and give you peace of mind.

However, one of the downsides of Fundrise is that early redemption is subject to penalties. This means that if you need to withdraw your money before the end of the investment period, you may be charged a fee.

Fundrise's average historical income returns may not be the highest, but they can still provide a steady stream of income for investors. It's essential to keep in mind that past performance is not a guarantee of future success, but it can give you an idea of what to expect.

Here are some key pros and cons of Fundrise:

The low $10 investment minimum is a great feature for small investors, but those with IRAs will encounter a $1,000 minimum.

This platform offers broad diversification among investment plans, which are aligned with distinct goals such as Growth, Income, or Balanced.

You can view every corner of the platform and drill down into each offer, including the prospectus for every fund, after a brief login that doesn’t require a Social Security number.

Quarterly redemptions are available, but not guaranteed, on a first-come-first-served case.

Fundrise, like any investment, has its downsides. Here are some of the notable cons:

Early redemption comes with penalties. If you redeem shares before holding them for five years, you may be subject to a penalty and won't receive your entire capital investment back.

Average historical income returns are nothing to get excited about. The average income returns are updated daily, but they don't include returns from capital gains. They're comparable to those of a corporate bond fund, which provides greater liquidity.

Finding specific project details can be a chore. You'll need to dig deep to get to the pages that describe the individual projects and find legal documents, such as prospectuses.

Customer service can be a challenge. To speak with a Fundrise associate, you'll need to complete an email request and wait for a callback, as no phone number is available on the website.

Here are the three biggest disadvantages of Fundrise, summarized in a list:

Fundrise's fee structure is transparent and straightforward. They charge an annual advisory fee of 0.15% to cover platform management, including client dashboards, tax management, customer support, and portfolio construction.

This fee is similar to what you'd pay to a financial advisor for managing your assets. In addition to the advisory fee, Fundrise also charges fund management fees ranging from 0.85% to 1.85% depending on the type of fund.

One of the benefits of Fundrise is that they don't charge broker and placement fees, which can save investors money. However, they do charge a high asset management fee of 0.85% in addition to the advisory fee.

For every $1,000 invested, Fundrise charges $10 per year in fees, consisting of $8.50 in asset management fees and $1.50 in advisory fees. This is comparable to traditional services, which often charge between 0.25% and 1.45% annually.

Fundrise also provides a tax package to investors, including reporting data for tax returns, and offers quarterly liquidation opportunities. However, these opportunities are not guaranteed, and investors should be aware of the liquidity options available to them.

Fundrise's fees and penalties are clearly spelled out, and they don't charge commissions or transaction fees. However, there are some additional fees to be aware of, including development and liquidation fees, IRA management fees, and origination/acquisition fees.

Here's a breakdown of Fundrise's fees:

Fundrise Pro, a service for self-directed investors, costs $99 per year or $10 per month, providing greater control over the portfolio.

Fundrise offers a range of investment types, including eREITs and eFunds.

eREITs are a type of investment that allows individuals to invest in a diversified portfolio of commercial properties, providing a steady stream of income.

eFunds, on the other hand, are a type of investment that allows individuals to invest in a diversified portfolio of real estate investment trusts, or REITs.

Investing in eREITs and eFunds through Fundrise provides a low minimum investment requirement, making it accessible to a wider range of investors.

Investors can choose from a variety of eREITs and eFunds, each with its own unique investment strategy and focus.

By investing in eREITs and eFunds, individuals can earn a passive income stream, providing a steady source of returns.

Before investing in Fundrise's eREITs, it's essential to consider several factors.

Do You Need Steady Income? Fundrise's eREITs are required to distribute at least 90% of their annual income to unit holders, resulting in high-yield cash distributions at the end of every quarter.

You'll need to weigh the benefits of these distributions against the tax implications, as REIT distributions are taxed like regular income.

How Risk Tolerant Are You? Fundrise may promise consistent returns, but it's crucial to match your investment with your risk profile, considering your age, income, and goals.

Publicly traded REITs may be a more suitable alternative for conservative investors, offering a reliable income while protecting their principal.

Liquidity is a crucial aspect to consider when investing in Fundrise, a real estate crowdfunding platform. Liquidity refers to the ease and speed with which you can convert your investment into cash.

Fundrise investments are considered long-term, and the trade-off for higher returns is longer capital lock-up periods, ranging from several months to years. Lock-up periods can be a challenge for investors who need access to their money quickly.

To redeem all or part of your shares, you'll need to submit a liquidation request. Liquidations are not guaranteed and are fulfilled on a first-come-first-serve basis.

Here are some key facts to keep in mind:

If you need to liquidate your shares, be aware that there may be a 1% fee for redeeming shares you’ve held for less than five years. However, the Flagship Fund and the Income Fund are exceptions, allowing investors to sell prior to five years for no penalties.

If you're looking for steady income, you'll be happy to know that REITs are required by federal law to distribute at least 90% of their annual income to unit holders.

This means Fundrise's eREITs will make high-yield cash distributions at the end of every quarter.

However, keep in mind that REIT distributions are taxed like regular income, not at a low rate like corporate dividends.

This is why REITs are sometimes called tax-inefficient investments, though how efficient they are depends on your specific tax situation.

You might find it's better to invest in a stock that reinvests the majority of earnings instead of distributing them to shareholders, as this can result in higher net returns and a lower tax bill.

Your risk tolerance is a crucial factor to consider before investing your money. Fundrise may promise consistent returns, but it may not match your risk profile.

Your age and overall goals play a significant role in determining how much risk you're willing to take. Fundrise, founded in 2012, has yet to experience a major downturn in the housing and real estate markets.

Publicly traded REITs may be a more suitable alternative for conservative investors like retirees who want a reliable income while protecting their principal.

If you're looking for alternatives to Fundrise, there are several options worth considering. Arrived, for example, focuses on investing in single-family homes, and has a minimum investment requirement of $1,000.

Cadre is another alternative, catering to accredited investors with a minimum investment of $50,000. This platform allows you to diversify your portfolio in real estate.

CrowdStreet is also an option for accredited investors, offering the chance to invest directly in specific commercial real estate projects by partnering with developers across the U.S. The minimum amount to invest in any single project is $25,000.

DiversyFund allows non-accredited investors to buy into residential multi-family properties with investments starting at just $500, but comes with a significant downside: there's no liquidity, as early withdrawals are not permitted and there's no market for selling your shares.

Here are some key differences between these alternatives and Fundrise:

Fundrise's approach to investing in real estate is distinct from traditional REITs, which have publicly traded share prices that can be highly liquid. However, this also means that REITs can be subject to short-term price volatility.

Fundrise, on the other hand, has a more stable returns profile, with no publicly traded share price. This means that you won't have to worry about fluctuating prices in the short term.

To invest with Fundrise, you first need to sign up for an account online and select an investment plan, choosing from a Growth, Income, or Balanced Portfolio.

Each portfolio includes dozens of alternative assets, such as commercial, industrial, and residential debt and equity, giving you a diversified investment mix.

You can browse the Fundrise portfolios online and see the projects in each plan, with details on each investment's type, location, rating, and projected return.

Fundrise's advanced plans require a minimum investment of $1,000, $10,000, or $100,000, depending on the plan chosen, but you can start investing with as little as $500.

Real estate investments with Fundrise are not a short-term investment, and you should plan to hold your investment for at least five years to see the best results.

You can sign up for a Fundrise account online and select an investment plan that aligns with your goals and desired strategy.

Fundrise offers three main investment plans: Growth, Income, or Balanced Portfolio, each including dozens of alternative assets like commercial, industrial, and residential debt and equity.

You can choose from advanced plans that require a minimum investment of $1,000, $10,000, or $100,000, depending on the plan.

To invest, you must be a U.S. resident over 18 and have at least $500, though advanced plans have higher minimums.

Fundrise's portfolios are meant for long-term investors who won't need to cash out within five years, as real estate investments typically take time to mature.

You'll receive quarterly dividends, but getting your initial money back will be challenging unless you take advantage of the 90-day satisfaction period or redeem your shares.

During the 90-day satisfaction period, Fundrise will buy back your investment at the original amount you paid in, subject to some limitations.

You can also redeem your shares through the quarterly redemption plan, but details can be found in the Offering Circular.

Fundrise's eREITs or eFunds are on a quarterly dividend schedule, allowing you to receive dividends every three months.

You can opt to reinvest your dividends through the Fundrise Dividend Reinvestment Program, or change your account settings online to opt out at any time.

Auto Invest (Drip) is a feature that allows you to automatically reinvest your dividend earnings into your chosen offerings. This enables you to earn compounded returns and grow your principal over time.

Reinvesting your dividends is a great way to build wealth, as it allows your earnings to snowball and increase your dividend payouts.

Shares bought via auto investment must be held for a minimum of five years to avoid the 1% early withdrawal penalty.

Fundrise's average annual return is approximately 1.50%, which is a significant improvement over the -25.10% return of publicly traded REITs and the -18.11% return of the S&P 500 index in 2022.

The company pays out dividends quarterly, providing a great source of passive income. These dividends are calculated based on the total rental and interest income received by Fundrise, not the value of your shares.

You can either have Fundrise transfer your earnings to your bank account or reinvest them into your portfolio using its Auto Invest dividend reinvestment plan (DRIP). This plan allows you to automatically reinvest your dividends into your portfolio, which can help your investment grow over time.

Long-term investors have earned an average annual income return of 4.81%, according to Fundrise.

Fundrise's portfolio delivered an average annual return of approximately 1.50% in 2022, outperforming the S&P 500 index's return of -18.11% and publicly traded REITs' return of -25.10%.

Long-term investors have earned an average annual income return of 4.81% with Fundrise. This return is significantly higher than the company's overall portfolio return, but it's essential to note that returns are not guaranteed.

The company states annual returns on its "Client Return" performance page, which provides a clear picture of the platform's historical performance. This transparency is a significant advantage for investors who want to make informed decisions.

Investors can make money with Fundrise, but it's crucial to understand that higher returns often come with a cost, such as reduced liquidity.

Dividends are a great source of passive income, paid out quarterly by Fundrise.

You can choose to have your earnings transferred to your bank account or reinvest them into your portfolio using Fundrise's Auto Invest dividend reinvestment plan (DRIP).

Fundrise uses a "first in, first out" (FIFO) share redemption process, so if you reinvest your dividends, it doesn't reset the holding period of your entire investment each quarter.

Dividends are calculated based on the total rental and interest income received by Fundrise, not the value of your shares.

You can make money on your investment in two ways: through dividends and appreciation.

You can make money with Fundrise, but it's essential to understand how it works. Fundrise investors don't invest in specific real estate projects, but rather in one of the company's eREITs or eFunds.

The Innovation Fund focuses on high-growth private technology companies, which can lead to significant returns through appreciation over time. Fundrise's eREITs and eFunds are not publicly traded, making them less liquid than other investments.

You can make money through dividends and appreciation. Fundrise pays out dividends quarterly, which can be a great source of passive income. Dividends are calculated based on the total rental and interest income received by Fundrise, not the value of your shares.

Fundrise's eREITs contain a mix of debt and equity, while eFunds contain only equity. Long-term investors have earned an average annual income return of 4.81%, according to the company.