Luis Pazos 
I’ve been investing with Fundrise since 2018, and I’m happy to report it’s been profitable. I’ve explored various real estate crowdfunding platforms but finally took the plunge with Fundrise about five years ago. Recently, I received a congratulatory email from Fundrise marking my “anniversary,” which seemed like a perfect opportunity to review how my investment has performed.
When I first ventured into real estate and private assets through Fundrise, I was primarily intrigued by its user-friendly crowdfunding approach, lower fees, and transparency compared to traditional private REITs. With Fundrise, the minimum investment is just $10, making it accessible to nearly everyone. This lower barrier means even if there’s a loss, it won’t be financially devastating.
Fundrise started in 2012 and quickly rose to prominence. By the end of 2023, they had facilitated over $4 billion in commercial real estate transactions and managed more than $7.1 billion in investments, paying $361 million in dividends to over 385,000 investors.
Unlike other private REITs, Fundrise discloses risks upfront, including liquidity issues during market downturns. They regularly update investors about potential restrictions on redemptions, especially if the real estate market dives. Such transparency is comforting, particularly considering that real estate, particularly commercial, isn’t a liquid asset like stocks.
I also looked into other real estate crowdfunding platforms. YieldStreet, for instance, also plunges into commercial real estate but includes alternative investments like marine loans and artwork. Groundfloor focuses on financing rather than equity investments, and DiversyFund emphasizes large apartment complexes. RealtyMogul, another competitor, requires a higher minimum investment and accredited investor status, making Fundrise’s lower investment requirement and accessibility stand out.
One significant advantage of Fundrise is their detailed reporting. I started with $1,000 in the Basic portfolio and later shifted to the Core plan by adding $4,000 to qualify for their IPO. Currently, my account balance is approximately $10,529.83, with a $3,055.99 increase solely from real estate investments. Fundrise’s breakdown of dividends, capital appreciation, and fees provides clear insight into how my investment grows.
Regarding returns, Fundrise has outperformed several real estate ETFs like Vanguard Real Estate ETF (VNQ) and iShares Global REIT ETF (REET) in certain years. Though not always the highest performer, its consistent positive returns are reassuring compared to the volatility of other investments. For example, Fundrise outperformed VNQ in years where VNQ faced losses, highlighting Fundrise’s steadier returns.
Comparing Fundrise with other investments like the stock market or even Bitcoin, you’ll see varying results. The S&P 500 and Bitcoin can offer higher returns but also come with higher risk and volatility. Fundrise offers a more stable alternative, especially critical for long-term financial goals like saving for a house or early retirement, where predictability can be more valuable than raw performance.
Fundrise provides diversification into commercial real estate without the need to manage properties directly. It fits well into a ‘barbell investment method’ that balances safe and high-risk investments. While it might not always offer the highest returns, its role in a diversified portfolio is undeniable.
In summary, Fundrise is a worthwhile investment platform. It offers accessible entry into the commercial real estate market, transparent fees, and regular updates. With a small initial investment and a solid track record, Fundrise stands as a valuable tool for investors looking to diversify their portfolios without the complexities of managing real estate directly.
For those considering Fundrise, here are a few frequently asked questions:
- Average Returns: From 2017-2021, Fundrise averaged an 11.78% return, with a YTD return of 5.4% through 2022.
- Earnings: Fundrise investors have seen over 60.4% returns from their original investments over the past five years.
- Risks: While there are risks, Fundrise offers safeguards like diversification and regular progress updates.
- Dividends: Paid quarterly, you can choose to receive them in cash or reinvest.
- Time to Profit: It varies, but you can expect decent returns over the long term.
- Passive Income: Yes, you can earn passive income through Fundrise’s crowdfunded real estate projects.
- Taxation: Fundrise investments are taxed as regular, taxable investment funds.
- Legitimacy: Fundrise is a legitimate and growing real estate investment company, backed by strong investor performance.
Overall, despite potential fees and liquidity issues, Fundrise offers transparency, a low entry point, and diversified real estate investment options, making it a solid choice for many investors.
