How To Get Money Using Fundrise? Is It Legit To Use? App Review In 2023
You don’t have to be filthy rich to be able to invest in real estate trusts. Now, you, too can buy into real estate private commercial and residential properties, thanks to Fundrise.
Average investors can now buy into private real estate investment trusts that are tailored to different financial goals and investment strategies. These places offer access to non-publicly traded fund assets which poses some extra risks when it comes to investing in the real estate industry.
But there are ways to generate some profit by adding real estate investment to your portfolio. You can easily do so by using Fundrise. Before you use Fundrise, give this review a quick read and know if it is any good for you.
About Fundrise
Fundrise is a real estate company online that allows average investors to buy into real estate properties (private, commercial, and residential). Investors can buy into a real estate property by pooling the assets using an investment platform.
However, the real products of Fundrise are real estate investment trusts. The real assets of Fundrise are REITs that generate income through the purchase and management of properties or through holding them. These assets are usually addressed as eREITs by the company.
Fundrise offers eFunds. The company offers eFunds to pool money from investors and use them to develop housing and buy lands before selling them for a profit. Investors can also go for Flagship Funds, which are high-liquidity funds with lots of room for diversification. The latest addition to the offerings of the Fundrise platform is the “Innovation Fund.” it only focuses on shares of tech companies held privately.
How Fundrise Operates?
Investors can purchase their shares on Fundrise through one of the different strategies offered by them. Here is how an investor can generate profit from one of the strategies of the company –
- Fixed Income: This strategy allows investors to make modest income with lower risk through real estate loans.
- Core Plus: this strategy offers a higher amount of income and modest growth through property investments.
- Value Add: value add investment allows investors to earn by investing in properties that require renovations.
- Opportunistic: this type of investment is all about investing in projects with the high-potential returns. Such investments also pose a greater risk as well.
Fundrise functions by determining the mix of eREITs and eFunds in each of the investment strategies and the properties underlying those investment strategies. It also offers Premium and Advanced levels of accounts. Once you choose your preferred investment strategy, they will manage your fund and include properties in your portfolio based on your investment objectives.
Fundrise Features
Before investing, Fundrise investors need to know about the different features that this platform has for investors.
Investment Available For Non Accredited Investors
Many online real estate platforms are exclusive to US citizens with a net worth of 1 million dollars (excluding the value of their home) or an annual income of $200,000.But, Fundrise makes its assets available to nonaccredited investors.
Low Investment Minimums
Thanks to Fundrise, investors can get into real estate investment even without a lots of money in their bank account. You don’t have to pay a hefty amount of money to invest in real estate properties.
Ease Of Use
You do not need pro-level investment skills or tech savvy to get started with Fundrise. It only takes a few minutes to set up your account (excluding the time you need to read the investor disclosure). When signing up, you have to provide your Phone Number, Address, and Social Security number. After that, you have to choose the mode of depositing funds into your account. You can choose from ACH transfer, wire transfer, or by filling out your bank information.
Redemptions
New investors love this feature of Fundrise. The platform allows investors to sell their funds back to Fundrise. However, when doing so, investors have to pay one percent of fees back to the fund if they have not held their shares for a minimum of five years.
Interval Funds
If Fundrise investors need a more liquid investment opportunity, they may look for interval funds. It offers improved access to the investment fund of the investors in the type of quarterly repurchase offers. So, when you liquidate your interval funds quarterly, you don’t have to pay any penalties like eREITs and eFUNDs. It is also capable of holding more assets with a higher possibility of diversification.
Fundrise Pros & Cons
There are both pros and cons to investing in Fundrise. You may go through the ones mentioned below –
Pros
- The platform finds, manages, and buys real estate properties on behalf of the investors.
- The minimum investment required for Fundrise is very low.
- It operates and invests your balance automatically based on your investment objective.
- Offers high liquidity to investors.
- These investments have a high potential to generate massive returns and income.
- Investors can easily use this platform.
Cons
- The platform requires 1% in annual fees every year.
- Larger balances don’t enjoy any additional discounted fees.
- Liquidity for private REITs is much less compared to publicly-traded REITs.
- When facing any market downturns, the platform might limit withdrawal which is often frustrating for investors.
- For some funds, you have to pay some penalty when you withdraw your fund within five years of your investment.
- They don’t have the best customer support suited for a platform of this stature.
Is Fundrise For You?
Whether Fundrise is for you or not depends on the type of investor, you are. If you are more of a conventional investor investing in large real estate properties, then Fundrise is not the platform you should choose. However, if you want to invest in real estate properties without having to buy a property for a hefty amount, then Fundrise is the right place for you to invest in.
Also, if you are using this platform, you should at least have a long-term goal (a minimum of five years. There are some penalties in some types of investments, but some of the funds offer early redemptions free of any penalty. So, if you are looking for an investment smaller in scale but with the potential of high return in the REITs, you can choose to invest in Fundrise.
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