Should You Sign Up For A Fundrise Account?

Jeremy BiberdorfBy: Jeremy Biberdorf

February 15, 2024February 15, 2024

Disclosure: This is a testimonial in partnership with Fundrise. We earn a commission from partner links on Modest Money.

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Fundrise is a pioneer in the world of real estate investing platforms, making it accessible to the average person, even those who aren’t accredited investors, with a minimal initial investment of just $10. Beyond traditional real estate properties, Fundrise has expanded its offerings to include investments in private tech companies prior to their IPOs.

The question that arises is whether Fundrise is the right choice for you. It’s important to note that Fundrise simplifies the process of real estate investing with its user-friendly platform, low fees, and low minimum investment requirements. These factors collectively break down the high barriers that often deter individuals from entering the real estate investment market.

If you’re considering real estate as an investment option, exploring Fundrise could be your best route to enter this lucrative arena. So, should you sign up for a Fundrise account? Let’s dive into the details and discover if it aligns with your investment goals.
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What is Fundrise?

Fundrise is a groundbreaking real estate investment platform that has redefined accessibility to diversified alternative assets. Founded by Ben Miller in 2012, Fundrise aimed to democratize real estate investing, allowing individuals of all backgrounds to participate.

Who is allowed to invest with Fundrise? Any U.S. resident aged 18 or older can get started with a minimum investment of just $10.

Fundrise’s primary offerings come in the form of real estate investment trusts, commonly referred to as REITs. These REITs focus on income-producing real estate, whether through direct building management or mortgage holdings. Fundrise has coined its products as “eREITs,” reflecting their digital nature and accessibility.

The essence of Fundrise lies in its mission to break down barriers and provide an avenue for individuals to engage in real estate and alternative asset investments effortlessly. With its inclusive approach and low entry requirements, Fundrise has transformed the landscape of real estate investing.

Should You Sign Up For A Fundrise Account?

Fundrise is an excellent choice for investors who have a long-term perspective and are looking to diversify their investment portfolio beyond the traditional options of stocks and bonds. It’s a platform that suits those who are willing to conduct their own research and actively manage their investments.

In a broader context, Fundrise stands out as a strong investment option. Over the past 140 years, the average 10-year stock market return has been 9.2%. What’s impressive is that Fundrise not only meets this benchmark but often surpasses it, demonstrating its robust performance.

Moreover, including real estate in your investment portfolio for diversification purposes is a wise strategy. Unlike stocks, the housing market operates somewhat independently, reducing its correlation with the stock market and offering stability during bear markets.

So, should you sign up for a Fundrise account? It’s certainly worth exploring for long-term investors seeking diversification and high returns.

If you do decide to sign up for a Fundrise account, you can expect the following benefits:

  • Available to nonaccredited investors: Fundrise offers investment products that are accessible to both accredited and nonaccredited investors, making real estate investing inclusive and available to a broader audience.
  • Low investment minimums: With low minimum investment requirements of just $10, Fundrise eliminates high financial barriers to entry, allowing individuals to participate in private real estate deals with smaller capital amounts.
  • User-friendly platform: Fundrise’s platform is designed for ease of use, with a straightforward signup process that typically takes around 10 minutes. Investors can fund their accounts through various methods, enhancing convenience.
  • Transparency: Fundrise prioritizes transparency, providing investors with comprehensive property information, maps, and detailed financial data. The platform encourages open communication and responsive customer service.
  • Competitive Advantage: Fundrise strategically focuses on projects with market caps ranging from $5 million to $100 million, leveraging its competitive advantage. These projects offer opportunities often overlooked by traditional banks, providing a unique investment landscape.

Fundrise Investment Options

If you decide to sign up for a Fundrise account, they will have a plan that fits your investment goals. Here are the main investment options:

  • Supplemental Income: This plan focuses on generating additional income for investors and includes a mix of eREITs (similar to ETFs) and eFunds that prioritize steady cash flow.
  • Balanced Investing: For those seeking a balanced approach, this plan combines eREITs and eFunds to provide both income from dividends and potential asset value appreciation.
  • Long-Term Growth: Investors with a long-term outlook may opt for this plan, which emphasizes the appreciation of assets over time. It includes a blend of eREITs and eFunds that target considerable appreciation.

Fundrise eREITs

Fundrise’s eREITs are a key component of its investment offerings. These non-traded REITs are not publicly listed, reducing fees but also limiting liquidity. The eREITs include:

  • Income eREIT: Focusing on debt investments in commercial real estate, this eREIT aims to generate consistent cash flow, offering a current dividend of 4.99%, above average for dividend stocks.
  • Growth eREIT: This eREIT prioritizes assets expected to appreciate significantly, resulting in a lower dividend of 1.78%. It targets wealth creation through asset appreciation.

Fundrise iPO : Fundrise introduces an “internet public offering” (iPO) that allows users to purchase shares in the company. A minimum investment of $1,000 in a Fundrise portfolio is required to participate, with an investment cap of 50% of the real estate principal invested.

Interval Funds: For investors seeking greater liquidity, the Fundrise Interval Fund offers quarterly repurchase offers, allowing shares to be liquidated every financial quarter without incurring the 1% fee. This fund provides diversification benefits while maintaining access to eFunds and eREITs.

Starter Portfolio: The starter portfolio offers an entry point for investors with a minimum investment of just $10. It includes a 50/50 blend of the income eREIT and the growth eREIT. Investors can expect to hold these investments for five or more years, with quarterly liquidation options. Combined annual fees include a 0.85% fund management fee and a 0.15% account management fee.

Goals-Based Portfolios: Investors with a minimum investment of $1,000 can access Goals-Based Portfolios. These portfolios encompass up to 7 eREITs and numerous properties, tailored to different goals. Options include balanced, passive income, or aggressive growth portfolios, with fees comprising a 0.85% annual management fee and a 0.15% portfolio management fee.

Final Thoughts

So, should you sign up for a Fundrise account? Ultimately, that will come down to your individual goals and risk tolerance. With a low investment minimum, user friendly platform, and a variety of investment options, Fundrise appeals to a wide range of investors. Click Here to get started today.
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Jeremy Biberdorf
Jeremy Biberdorf

About the Author:

Jeremy Biberdorf is the founder of Modest Money. He's a father of 2 beautiful girls, a dog owner, a long-time online entrepreneur and an investing enthusiast.

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