Financial Education  Fundrise Review - Affordable Real Estate Investing
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Fundrise Review - Affordable Real Estate Investing
TABLE OF CONTENTS
Video Summary
Key Takeaways
What Is Fundrise?
How Does Fundrise Work?
Fundrise’s Best Features
User Experience
Investments Available
Investing Automation Features
Educational Resources
Minimum Investment Required
Types of Accounts
Is Fundrise Safe?
Liquidity and Redemptions
Fees
Fundrise Pro
Pros and Cons
Pros
Cons
Who is Fundrise Ideal For?
Fundrise Alternatives
Final Thoughts

Fundrise Review - Affordable Real Estate Investing

Learn how you can easily and affordably invest in real estate with Fundrise. Explore their eReits that let you start diversifying your portfolio with real estate with as little as $10.

Erik Machuca Erik Machuca
Mar 1, 2024
Imagine you could invest in real estate without the hassle of managing properties or needing a large amount of money upfront. That's where Fundrise comes in.
Fundrise
Fundrise
★★★★☆ | 4.2 / 5
Sign-Up Bonus
 
✅
Automated Investing
✅
Start investing with $10
✅
Diversified portfolios
⛔
Less liquidity compared to stocks
 
It's an online platform that lets you get started investing in real estate with as little as $10. Fundrise pools money from many investors to invest in real estate projects across the United States.
From apartment buildings to commercial spaces, Fundrise gives you a piece of the action in a variety of real estate ventures.
It's like having a diversified real estate portfolio at your fingertips, without the traditional barriers to entry.

Video Summary

Video preview

Key Takeaways

  • Diversification: Fundrise offers access to a diversified portfolio of real estate assets, allowing investors to spread their risk across various properties and geographic locations.
  • Accessibility: With low minimum investments and a user-friendly platform, Fundrise makes real estate investing accessible to individuals who may not have the capital or expertise for traditional real estate transactions.
  • Passive Income Potential: Investors can potentially earn regular dividends and benefit from potential appreciation in real estate values without the hassle of directly managing properties, offering a source of passive income.
Try Fundrise, and get a special sign-up bonus here.
Try Fundrise, and get a special sign-up bonus here.

What Is Fundrise?

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Fundrise is a modern platform that has made investing in real estate accessible for everyday individuals.
By breaking down traditional barriers to entry, Fundrise makes it possible for both accredited and non-accredited investors to access institutional-quality real estate investments with as little as $10.
At its core, Fundrise is a platform that allows you to invest in a diversified portfolio of real estate assets across the United States.
It was founded with the mission to make real estate investing more accessible to the average person.
The platform offers a variety of proprietary funds, including real estate private equity and venture capital, focusing on long-term growth and income generation.

How Does Fundrise Work?

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Fundrise operates on a simple yet powerful idea: crowdfunding real estate investments. When you invest your money with Fundrise, it goes into a pot with funds from other investors.
This pool of money is then used to buy and manage real estate properties. You're essentially buying shares in a portfolio of properties, which Fundrise selects and manages on your behalf.
Over time, as these properties generate income through rent or increase in value, so does your investment.
The best part? You don't have to deal with the nitty-gritty details of property management or real estate transactions. Fundrise handles all that, making it a hands-off investment option for you.
Investment Options
Fundrise provides investors with access to eREITs (Electronic Real Estate Investment Trusts) and eFunds. These are collections of real estate assets that Fundrise has carefully selected and managed.
eREITs focus on income-producing real estate, while eFunds are geared towards growth by Investing in land development and new construction.
Investment Plans
To cater to different investor goals and risk tolerances, Fundrise offers several pre-built investment plans. These include the Supplemental Income plan, Balanced Investing plan, and Long-Term Growth plan.
Each plan is composed of a mix of eREITs and eFunds, designed to achieve specific investment outcomes.
Management and Strategy
Once you've invested, Fundrise takes over the management of the properties within its funds. The platform finds, buys, and manages real estate properties on behalf of its investors.
This hands-off approach means you don't have to worry about the day-to-day operations of your real estate investments.
Fundrise's team of experts works to ensure that each property meets the investment objectives of the fund, aiming for long-term growth and income generation.

Fundrise’s Best Features

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Accessibility: Fundrise is open to non-accredited investors, with a minimum investment as low as $10. This makes real estate investing accessible to a wider range of individuals.
Diversification: Fundrise offers a variety of proprietary funds, including eREITs and eFunds, which invest in a range of real estate properties across the U.S.
This allows investors to diversify their portfolios beyond traditional asset classes like stocks and bonds.
Investment Plans: Fundrise provides pre-built investment plans tailored to different investment goals, such as Supplemental Income, Balanced Investing, and Long-Term Growth.
Each plan offers a different mix of eREITs and eFunds, providing varying levels of income and growth potential.
Automatic Investing: Fundrise offers automatic investing features, allowing your money to be automatically invested in real estate projects based on your chosen investment plan. This includes features like auto-invest and dividend reinvestment.
Fundrise Pro: For more hands-on investors, Fundrise Pro offers the ability to customize your portfolio, make direct investments in specific funds, and build custom allocations.
It also provides access to unique tools and exclusive content. Fundrise Pro comes with an additional cost, but a 30-day free trial period is available.
Transparency: Fundrise provides a high level of transparency, with most information readily available on its website.
This includes details about its funds, the underlying properties, and the platform's fee structure.
Mobile Access: Fundrise offers a mobile app, available on iOS and Android, allowing users to monitor their investments, review market trends, and receive project alerts on the go.
Try Fundrise, and get a special sign-up bonus here.
Try Fundrise, and get a special sign-up bonus here.

User Experience

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From signing up to managing your investments, the platform is designed with you in mind. It's intuitive, easy to use, and provides all the information you need to make informed decisions.
You can easily track your portfolio's performance, learn about the properties you're invested in, and adjust your investment strategy as needed.
Signing Up and Getting Started
Getting started with Fundrise is a breeze. The sign-up process is streamlined and can be completed in just a few minutes.
You simply enter your contact information, fund your account, and select an investment strategy. This simplicity ensures that even if you're new to investing, you won't be overwhelmed by complicated procedures.
Navigating the Platform
Fundrise's platform is designed with the user in mind. Whether you're accessing it through the full website or using the app, you'll find it easy to navigate.
The interface is clean and intuitive, allowing you to easily understand and manage your portfolio. This is a significant advantage, as some investment platforms can be clunky and difficult to navigate.

Investments Available

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Account Tiers
Fundrise offers five account tiers, each with different investment options and minimum investment requirements.
These range from the Starter tier, which requires a minimum investment of $10, to the Premium tier, which requires a significant initial investment.
Each tier provides access to different funds and investment strategies, allowing you to choose the level of investment that best suits your financial goals
The primary types of investments available on Fundrise are:
eREITs (Electronic Real Estate Investment Trusts): These are funds that invest in a variety of real estate properties across the U.S. They are designed to generate income through rent and potentially appreciate in value over time.
eFunds: Similar to eREITs, eFunds are portfolios of real estate properties. However, they differ in their structure and tax implications. eFunds are designed to invest in residential real estate in specific cities, offering a more targeted investment strategy.
Investment Plans: Fundrise offers several pre-built investment plans tailored to different investment goals. These plans include the Supplemental Income plan, Balanced Investing plan, and Long-Term Growth plan.
Each plan offers a different mix of eREITs and eFunds, providing varying levels of income and growth potential.
Fundrise Innovation Fund: This fund is currently available to Fundrise Pro members for direct investment or inclusion in a custom investment plan.
Direct Investments: For Pro members, Fundrise allows direct investments in funds that are currently accepting additional investments. This offers more control and customization over your investment strategy.
These investment options provide a range of opportunities to gain exposure to real estate, whether you’re looking for income, growth, or a balance of both.
Try Fundrise, and get a special sign-up bonus here.
Try Fundrise, and get a special sign-up bonus here.

Investing Automation Features

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Fundrise offers several investing automation features designed to make the investment process more convenient and efficient for its users:
Auto-Invest
The auto-invest feature on Fundrise allows you to set up automatic, periodic investments into your Fundrise portfolio.
You can schedule these recurring investments according to your preferences, such as on a weekly, biweekly, or monthly basis.
This feature helps you to consistently invest in your portfolio without having to manually transfer funds each time.
Dividend Reinvestment
Fundrise also offers an automatic dividend reinvestment program (DRIP). When you earn dividends from your investments, you can choose to have these dividends automatically reinvested back into your portfolio.
This can help compound your returns over time by continuously reinvesting your earnings into new investment opportunities.

Educational Resources

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Beyond its core investment offerings, Fundrise provides many educational resources to help you become a more knowledgeable investor.
From detailed breakdowns of investment strategies to insights into the real estate market, Fundrise empowers you with knowledge.

Minimum Investment Required

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Getting started with Fundrise is incredibly accessible, thanks to its low minimum investment requirement. With just $10, you can begin your real estate investment journey.
This low barrier to entry makes Fundrise an attractive option for beginner investors or those looking to start investing in real estate without significant upfront capital.
Try Fundrise, and get a special sign-up bonus here.
Try Fundrise, and get a special sign-up bonus here.

Types of Accounts

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Fundrise supports a range of account types to meet different investor needs:
Individual Account: This is a standard account for a single investor.
Joint Account: You can open an account with another person, and Fundrise supports joint accounts with rights of survivorship, meaning that upon the death of one owner, the surviving owner retains control of the account.
Retirement Accounts: You can invest through retirement accounts such as Individual Retirement Accounts (IRAs), with options for both Roth and Traditional IRAs available directly on the Fundrise platform.
Fundrise also supports Entity and Trust accounts if you’re investing on behalf of a legal entity or through a trust.

Is Fundrise Safe?

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Investments made through Fundrise are not insured by the Federal Deposit Insurance Corporation (FDIC) or the Securities Investor Protection Corporation (SIPC).
This means that unlike traditional bank accounts or brokerage accounts, your investments with Fundrise do not have the protection that FDIC or SIPC insurance provides against the loss of your cash or securities in the case of a financial institution's failure.
Fundrise is registered with the Securities and Exchange Commission (SEC), which governs the platform and provides a level of oversight.
However, the lack of FDIC or SIPC insurance means that there is a risk of losing money, and investors should be aware of this when considering investing with Fundrise.

Liquidity and Redemptions

It's important to note that investments made through Fundrise are less liquid than traditional stocks or bonds.
While you can request to redeem your shares, Fundrise states that it reserves the right to freeze redemptions during economic downturns.
This is a consideration for investors who may need access to their funds on short notice.

Fees

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Fundrise has a straightforward fee structure designed to be transparent and manageable for investors. Some of the fees include:
Annual Advisory Fees: Fundrise charges a 0.15% annual advisory fee. This fee covers the cost of investment advice and other related services provided by the platform.
Annual Asset Management Fees: For the management of its real estate funds, Fundrise imposes a 0.85% annual asset management fee.
This fee is applied to cover the costs associated with managing the investment properties within the Fundrise portfolios.
Innovation Fund Fee: A specific fee of 1.85% is charged annually for managing the Innovation Fund, a particular investment option offered by Fundrise.
IRA Custodial Fee: For those investing through an Individual Retirement Account (IRA) on Fundrise, there is a $125 annual custodial fee charged by Millennium Trust Company, the third-party custodian.
Early Redemption Penalty: For certain investments, such as private eREITs and Fundrise eFunds, which must be held for at least five years, Fundrise charges a 1% penalty on shares cashed out if withdrawn early.
Fundrise Pro Membership: Fundrise offers a Pro membership option, which costs $10 per month or $99 per year.

Fundrise Pro

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The Fundrise Pro premium membership offers benefits for those seeking more control and customization over their real estate investments. Some of the key perks include:
Custom Portfolio Customization: Fundrise Pro allows you to tailor your portfolio according to your specific investment preferences.
This means you can make direct investments in particular funds or build custom allocations, giving you the flexibility to shape your investment strategy more precisely.
Automatic Future Contributions: With Fundrise Pro, you can set up automatic future contributions based on your custom allocations.
This feature simplifies the process of growing your investment over time, aligning with your financial goals without the need for constant manual adjustments.
Access to Exclusive Funds: Pro members have the opportunity to invest in specific funds that may not be available to regular Fundrise investors.
This can include access to unique real estate projects or funds with particular investment focuses, offering a broader range of investment opportunities.
Enhanced Investment Control: The Pro membership is designed for more hands-on investors who prefer to have a greater say in where their money is allocated.
This level of control is particularly appealing to experienced investors or those with specific investment goals that require more nuanced portfolio management.
Cost-Effectiveness: Fundrise Pro is relatively affordable at $10 per month or $99 per year. This pricing is competitive, especially considering the level of customization and control it offers over your real estate investments.
30-Day Free Trial: For those unsure about committing to the Pro membership, Fundrise offers a 30-day free trial period.
This allows you to explore the full range of Pro features and benefits without any upfront cost, helping you make an informed decision about whether it's the right fit for your investment strategy.
The Fundrise Pro membership may appeal to investors looking for more direct control over their real estate investments, offering customization, exclusive access to certain funds, and enhanced investment management features.
Try Fundrise, and get a special sign-up bonus here.
Try Fundrise, and get a special sign-up bonus here.

Pros and Cons

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Pros

Accessibility: Fundrise allows non-accredited investors to invest in real estate with a minimum investment as low as $10.
Diversification: The platform offers a variety of investment options, including eREITs and eFunds, which are portfolios of real estate properties across the U.S.
Automated Investing: Fundrise offers features like automatic dividend reinvestment and auto-invest, which can help your investment grow over time.

Cons

Liquidity: Real estate investments on Fundrise are generally less liquid than stocks or bonds. If the company runs into trouble or decides to limit redemptions, investors may not be able to access their funds.
Fees: While Fundrise clearly notes its asset management and advisory fees, it also reserves the right to charge additional fees, such as development or liquidation fees, for work on specific assets. These fees can add up over time and eat into your returns.
Long-Term Commitment: Fundrise is designed for long-term investing, typically five years or more. Early redemption is subject to penalties.

Who is Fundrise Ideal For?

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Fundrise is ideal for beginner investors looking to diversify their portfolio beyond stocks and bonds. It's also a great fit for those interested in real estate but not ready to buy property directly.
With its low minimum investment requirement, Fundrise makes real estate investing accessible and manageable, even if you're just starting out or have limited capital to invest.
If you're patient and willing to invest for the long term, Fundrise could be a valuable addition to your investment strategy.

Fundrise Alternatives

Fundrise is a simple-to-use investing app for those wanting to add real estate to their investment portfolio, but here’s a few more apps worth considering.
Acorns: Acorns is a beginner-friendly investing app that invests your spare change, automates your investments, and offers pre-built and diversified expert portfolios.
Acorns: Acorns is a beginner-friendly investing app that invests your spare change, automates your investments, and offers pre-built and diversified expert portfolios.
Acorns Review
Stash: Stash is a user-friendly investing app that offers Smart Portfolios, investing automation tools, and a cash back card that earns you stock rewards in real companies from your purchases.
Stash: Stash is a user-friendly investing app that offers Smart Portfolios, investing automation tools, and a cash back card that earns you stock rewards in real companies from your purchases.
Stash Review
M1 Finance: M1 is a comprehensive investment platform that offers a unique blend of automated investing and individual customization, allowing you to invest in fractional shares of stocks and ETFs.
M1 Finance: M1 is a comprehensive investment platform that offers a unique blend of automated investing and individual customization, allowing you to invest in fractional shares of stocks and ETFs.
M1 Review

Final Thoughts

Fundrise stands out as a platform that brings real estate investing within reach of the average investor.
With its user-friendly interface, diverse investment options, and educational resources, it simplifies real estate investing and makes it accessible and engaging.
While it's important to consider the long-term nature and liquidity of real estate investments, Fundrise offers a unique opportunity to diversify your portfolio and potentially enhance your returns.
If you're curious about real estate investing, Fundrise could be a great place to start your journey.
Try Fundrise, and get a special sign-up bonus here.
Try Fundrise, and get a special sign-up bonus here.
Erik Machuca
Erik Machuca
Erik Machuca is the founder of EverydayInvesting.com. He is passionate about helping everyday investors simplify investing with technology.

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