Its investment plans make room for both new and advanced investors.
Fundrise is an online real estate investment platform without the upfront and ongoing costs of property ownership. Asset management and advisory fees are clearly listed, but watch out for hidden costs.
Peter Carleton is a writer that covers banking and investing, breaking down what you need to know about where you put your money. When Peter's not thinking about cutting-edge banking apps and robo-advisors, he runs a creative agency and spends his spare time cooking or reading.
Fundrise suspends investor withdrawals in light of the coronavirus outbreak
Numerous investor complaints on both the Better Business Bureau and Trustpilot report difficulty accessing invested funds in the wake of COVID-19.
On its website, Fundrise states that redemption requests for its mature eREITs and eFunds have been suspended in response to market volatility triggered by the outbreak. It also states that it is no longer accepting new investments on its mature eREITs and eFunds. Fundrise explains that these measures are intended to prevent the depletion of its cash reserves and to avoid having to sell property in a down market.
In a blog post on its website published November 2018, Fundrise suggested that in times of financial crisis, investor requests for liquidation may be suspended. Whether or not its investors were made aware of this prior to investing funds is unclear.
Fundrise is not the only real estate investment platform to suspend investor withdrawal requests — Upside Avenue has also placed a temporary pause on investor redemptions. But a number of other platforms still allow investor redemptions, including DiversyFund, PeerStreet and Patch of Land.
What makes Fundrise unique?
Fundrise sets itself apart from competitors by offering tiered investment plans based on how much and how often investors want to contribute. Beginner investors can get started with just $500 in the Starter plan, while more experienced investors can sign up for the Advanced plan with $10,000.
With these unique investment plans in place, Fundrise positions itself to cater to both new and advanced investors — a distinction most of its competitors have yet to achieve.
How does Fundrise work?
Fundrise creates and gathers real estate trusts and portfolios comprised of residential and commercial properties, allowing users to invest in a diversified mix.
Plan. Choose between one of three plans according to your initial investment:
a.Starter: $500 minimum, five to 10 projects
b.Core: $1,000 minimum, 40+ projects
c. Advanced: $10,000 minimum, 80+ projects
Invest. Choose an investment style to determine which products to invest in:
a.Starter: Low-risk, low-return portfolio with a low minimum investment
b.Supplemental income: A consistent income stream
c.Balanced investing: High diversification to build wealth steadily
d.Long-term growth: Focus on overall returns over the long term
Earn. After funding your account, you’ll start earning returns through quarterly dividends and appreciation in the value of the shares in your investment.
Who is Fundrise best for?
Fundrise is suitable for a variety of investors:
New investors. You can start investing in real estate with as little as $500.
Experienced investors. Diversify your portfolio without substantial capital requirements.
Long-term investors. Real estate is an illiquid investment but it can provide long-term returns. Plus, Fundrise’s retirement and IRA accounts can help with retirement planning.
Hands-off investors. You can invest indirectly so you won’t need to commit to a downment, maintenance costs or upkeep that real estate investments generally require.
What are the benefits of Fundrise?
You don’t need to be an accredited investor to use and take advantage of Fundrise’s perks:
Low minimums. Anyone can start investing with a minimum deposit of $500.
Diversification. Portfolios contain a diverse mix of commercial and residential properties that generate revenue differently.
Low fees. Fundrise charges advisory and management fees that total 1%, which is lower than most competitors.
90-day satisfaction guarantee. If you’re under a Starter account and you aren’t satisfied with your investment after 90 days, Fundrise will buy it back for the price you paid.
What to watch out for
Any returns you make with Fundrise are taxed as ordinary income along with the following downfalls:
Illiquid. Real estate investments are illiquid and Fundrise REITs aren’t publicly traded, so there’s no guarantee that there will be buyers if you want to sell. Plus, you can only request to redeem shares every quarter, but a waiting period and fees may apply.
Lack of transparency. Fundrise isn’t specific about your invested projects and the risk tolerances, returns or projections for each investment style. You can find most of this information in the account disclosures during signup, but it isn’t mentioned elsewhere.
Hidden costs. Underlying REIT fees, fund development fees, asset origination costs, liquidation charges and early redemption fees aren’t mentioned in the fee schedule.
Compare with other real estate investing platforms
Fundrise fees and pricing
Fundrise has a straightforward pricing model that’s less expensive than most competitors. Here’s what you’ll pay to use the service:
Investment Advisory fee: 0.15% annually
Asset Management fee: 0.85% annually
However, underlying REIT fees along with fund development, asset origination and liquidation charges may apply. Your investments may also be subject to early redemption fees depending on how long you’ve owned the shares before selling:
Less than 90 days: None
91 days–3 years: 3% of value
3–4 years: 2% of value
4–5 years: 1% of value
5 years+: None
Customer reviews and complaints
Fundrise feedback is mixed. Its mobile app gets stellar ratings but it receives lukewarm feedback on Trustpilot.
As of June 2020, Fundrise is a Better Business Bureau (BBB) accredited business with an A- rating and 43 complaints. On Trustpilot, Fundrise maintains a TrustScore of 3.5 out of 5 based on 295 reviews. Its mobile app scores 4.6 out of 5 on Google Play and 4.8 out of 5 in the Apple App Store.
Customers praise the company’s frequent investment updates and its beginner-friendly platform. But there are numerous complaints on both the BBB and Trustpilot of investors having difficulty withdrawing funds. A number of these complaints were filed in 2020, with investors stating Fundrise refused their withdrawal request due to the unstable market conditions produced by the coronavirus outbreak.
How do I sign up?
Sign up for Fundrise in 10 minutes:
Visit the Fundrise website and click Get Started.
Select your plan.
Fill in your personal information, then click Continue.
Confirm your country of citizenship and residence, then click Continue.
Choose your account type, then click Continue.
Fill in your contact information and Social Security number and click Continue.
Choose your initial contribution and fund your account, then click Continue.
Read and agree to all account disclosures and agreements, then click Continue.
Review your information and account details, then click Submit.
At least 18 years old
Valid Social Security number
Valid US address
$500 minimum deposit
First and last name
Phone number and email
Social Security number
Bank account information
How do I contact Fundrise customer service?
There are two ways to get in touch with customer service:
I’m ready to start using Fundrise. Now what?
Now that you’ve signed up, here’s how you can make the most out of the service:
Investor profile. Set up your investor profile and any other account information, such as beneficiaries, accreditation, etc.
Set up auto-invest. If you plan on investing regularly, set up auto-invest to make recurring contributions.
Refer friends. Depending on your account, Fundrise will waive your fees for a specific period of time for each qualified friend you refer.
Add two-factor authentication. Visit your account settings page to set up two-factor authentication.
Turn on notifications. Get notified when there are new projects, portfolios or other important details.
Resources. Take advantage of the Fundrise investor resources to learn about investing, real estate and more.
Download the app. Download the Fundrise iPhone app from the app store to manage your portfolio when you’re away from your desktop.
Fundrise is an online investing platform that allows users to invest in real estate without the need for down payments, maintenance costs and other barriers to entry. It has a low minimum investment of $500 and an annual management fee of 1%. But investments are extremely illiquid and early withdrawal fees may apply. Learn about other real estate investing platforms then compare your options if this one isn’t right for you.
Frequently asked questions
Yes. At the moment, Fundrise is only available to US citizens with a valid US residential address.
Plaid is a third-party service that essentially creates a link between your account and Fundrise, allowing them to collect payments from you.
You can’t withdraw until the quarterly redemption period, and even then, your request is subject to review depending on which funds you have invested in. You can request a withdrawal by visiting the account settings page — keep in mind that there’s a 60-day waiting period and early redemption fees may apply.
No. Fundrise only allows you to invest in properties and projects within its pre-selected portfolios.
Fundrise Ratings are letter grades that quantify the relative risk of each asset in your investor portfolio. Ratings are based on factual information of the projects such as their development status, total leverage and more.
Yes. You can use the Fundrise Dividend Reinvestment Program (DRIP), to automatically invest your dividends into projects that align with your chosen investment style and plan.
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