Are you looking for a way to diversify your portfolio? Do you want to invest in real estate without the hassle of actually managing an investment property? If so, then Fundrise might be a good option for you. Founded by Ben Miller and Dan Miller, Fundrise is an online investing platform that is designed specifically with the individual investor in mind. With its innovative approach to raising capital, it provides investors like yourself with access to high-yielding commercial real estate opportunities.
As a potential investor, there are plenty of reasons why you should be excited about Fundrise. One of the main draws is that it allows you to earn a higher-than-average return on investment—in some cases as high as 15% per year. That's because fund investments are typically longer-term and this gives Fundrise properties more time to grow. For example, a traditional real estate developer may need to sell a building in as little as three years while Fundrise can hold on for 10 or more.
Fundrise also provides you with the potential for capital appreciation—or growth in the value of your investment. Because commercial properties tend to appreciate at a slower rate than residential properties, Fundrise makes this a key focus. Fundrise looks for properties that have the potential to appreciate within the expected timeframe of an investment (one to four years) while still providing you with rental income. This helps ensure your risk-adjusted returns are strong on both ends.
Fundrise is also unique in that it gives investors like yourself access to "crowdfunded" investments. A crowdfunded investment is when a person or company offers an investment opportunity to the general public through its online platform, but without all of the red tape that usually comes with it. For example, Fundrise manages every aspect of your investment—including property management and maintenance. They also deal with any tenant questions you may have (which is common with individual investors). This means that you won't have to worry about things like lease renewals, maintenance schedule updates, or even evicting a tenant who has fallen far behind on rent.
Fundrise's primary goal is to give you access to real estate opportunities that might otherwise be unavailable through other investment channels. With its focus on pre-screened properties and experienced real estate teams, Fundrise aims to offer you the opportunity for both capital growth and rental income
There's also a lot that can be done with your invested money. Unlike crowdfunding platforms such as Kickstarter or Indiegogo, Fundrise is not limited by what it can invest in – only by where the investment opportunities exist. On top of that, your funds are always liquid. That means you could choose to hold onto your investment(s) indefinitely or cash out at any time without penalty
Speaking of investments, let's take a look at what kind of opportunities Fundrise offers to potential investors like yourself:
Dividend reinvestment
Auto-invest
Create and manage investment goals
Invest via IRA
Customize portfolio strategy
Directly allocate to funds
Priority access to investments team
Fundrise offers a number of investment opportunities for different types of investors. While some vary in risk level, all carry the potential for capital appreciation as well as monthly income from rental fees or interest on bank loans:
Registered products: Registered products are the fund(s) that form the foundation of a new Fundrise investor’s portfolio. These fund(s) invest in a diversified portfolio of private real estate.
Non-registered products: Investors at the Core account level and above also have access to non-registered funds such as eREITs, which are private funds that invest in real estate according to a specific investment objective
Plus plans: Plus plans are an optional add-on for investors at the Advanced account level. These plans typically allocate a portion of your portfolio to more sophisticated real estate strategies that evolve over time based on new market opportunities.
Periodic accredited offerings: Premium investors can access private funds that periodically become available. These offerings are usually specialized, truly illiquid private equity funds with varying risk, return profiles, and time horizons.
Access to Fundrise IPO: The Fundrise IPO gives investors the opportunity to buy an ownership stake in Fundrise, the company, itself. When you invest in the Fundrise IPO, you are purchasing shares of Rise Companies Corp., the parent company and owner of Fundrise.
What makes Fundrise unique is that they are one of the only companies in the world that allow investors to gain access to diversified commercial real estate opportunities on a direct basis. That means you aren't investing alongside someone else, or through some fund manager who invests from a distance. Through Fundrise, you get to be directly involved with your investment – which can make all the difference.
How It Works: Examples and Case Studies
There is no better way to understand what we're talking about than through examples and case studies. While Fundrise offers a variety of personal investment opportunities, it's important to remember that the company also runs crowdfund real estate investments for small business owners and other crowdfunding investors as well. Here are some of the best examples of how Fundrise's crowdfunding platform and direct investment strategy work:
1. Rent Protection for Homeowners
In 2014, Fundrise launched a fund called the "Rent Protect" product to help property investors like yourself offset income loss caused by rising rents. Instead of having their tenants pay rent every month, you would collect that rent and then pay it back to the tenant (minus their agreed-upon rent percentage) as a loan that comes due in 24 months, and at the current market interest rate.
What's great about this strategy is that when you help your tenants pay off their monthly payments faster, they have more cash on hand to invest in other things – like repairs, upgrades, landscaping, and more. This means lower maintenance costs for you (which can help boost the value of your property).
2. Crowdfunding Opportunities from Friends and Family
There are plenty of people out there who know what they're doing when it comes to investing in real estate – but don't have the capital required to invest on their own. With Fundrise's crowdfunding platform, those "experts" can pool their resources with others for the sake of real estate investing.
One such example comes from a group of friends and family who all know the ins and outs of real estate investment better than most, but didn't have the capital to invest on their own. Together, they invested in a Fundrise Real Estate Investment Trust (Fundrise REIT) called the "Dunbar Loop Portfolio".
This portfolio included over $2.4 million worth of real estate investments to date – with plans for future growth:
3. Direct Investments vs Crowdfunding Investments
Crowdfunding and direct investment are both great ways to invest in real estate. You just have to decide which one is best for you. Before you dive into any investments, however, it's important to remember that they are not all the same – though they can be similar.
For example, a "Pre-Construction" Fundrise investment offers investors like yourself the chance to purchase fractional shares of four new apartment buildings. This enables you to take advantage of the investment at its ground floor stage, which gives you an opportunity for return on investment before the building has even been completed.
The greatest aspect about Fundrise is that it allows investors like yourself to get in on deals they might not otherwise have access to – while also providing an excellent way for experts to monetize their knowledge. To learn more about how Fundrise works, visit: https://fundrise.com/
With many people opting out of traditional investments like stocks and bonds due to economic instability overseas and at home, this new asset class may be just what we need right now. What are you waiting for? Invest today!
