What Is Fundrise and How Does It Work
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- Fundrise is a platform for making long-term investments in private real estate.
- Fundrise's Starter Portfolios carry a $10 minimum and offer a blend of eREITs and eFunds.
- With $1,000, you can utilize more portfolio allocations and account features.
- Click here to open an account with Fundrise.
Overall rating
Is Fundrise right for you?
Fundrise is a crowdfunding platform that lets you invest in commercial real estate projects across the US. In addition to IPOs, you can invest in a combination of the company's two primary investments – eREITS, or electronic real estate investment trusts, and eFunds, or electronic real estate funds – but you'll need at least $10 to begin.
It also has an investment team that works directly with real estate developers, manages client portfolios, and handles real estate deals.
Headquartered in Washington, D.C., Fundrise offers investors access to real estate project throughout all 50 states. The platform also provides desktop and mobile access, allowing users to monitor asset growth and review market trends and project alerts.
The Fundrise mobile app is available on iOS and Android devices.
Not sure if Fundrise is right for you? Keep reading to see how it stacks up against similar investment platforms.
How does Fundrise compare to other investment platforms?
Fundrise, CrowdStreet, and Yieldstreet are all popular platforms for both real estate assets and alternative investments. But the investing platforms do vary when it comes to fees and investment choices.
If you're looking for a low-cost, automated platform that offers REITs and other inexpensive real estate funds, Fundrise could be right for you. CrowdStreet has a much higher minimum ($25,000), but it offers an array of real estate funds, with the option of managed portfolios.
Yieldstreet has a lower minimum than CrowdStreet, but it may not be the best choice for investors solely focused on automated REIT investing.
Ways to invest with Fundrise
Starter Portfolio
You'll only need $10 to begin investing at Fundrise. With $10, you can set up a Starter Portfolio and gain access to a diverse mix of US real estate projects. As for fees, you'll pay a 0.15% annual investment advisory fee and a 0.85% annual asset management fee.
Fundrise primarily offers eREITs and eFunds, but for Starter Portfolios, you'll be investing in an equally allocated blend of the company's Growth eREITs and Income eREIT II. You'll earn returns through quarterly dividends and appreciation of share value.
Basic account level
With a $1,000 minimum requirement, this account level gives you access to auto-invest and dividend reinvesting, investment goals, IRA investing, and Fundrise IPO investing. And like the Starter account level, you can get up to 90 days of no fees when you invite new clients to Fundrise.
Core plans
Fundrise's Core plans are a bit more expensive than its Starter portfolios – they include a $5,000 minimum investment requirement – but they offer access to more investment strategies and account features. Core portfolios offer three different investment plans: Supplemental income, Balanced investing, and Long-Term Growth.
Each plan comes with a varying portfolio allocation and expected return rate. For example, Supplemental Income plans typically utilize a larger percentage of income-focused assets than they do growth-focused assets. Balanced plans employ an equal blend of both, and Long-Term Growth plans rely more on growth-focused assets.
Fundrise's growth-focused assets direct more attention to appreciation and pay less attention to dividends. For instance, for Long-Term Growth plans, Fundrise primarily uses growth eREITs and another asset called eREIT XIV.
All three plans also offer IRAs, auto-invest and dividend reinvestment, and discounts for referrals.
Advanced and Premium account levels
Fundrise's Advanced account level includes a $10,000 minimum investment requirement, but it offers Plus plans which function as add-ons to each Core plan. This account basically offers the same features as the Core plans. The only difference is that it allows you to allocate a percentage of your portfolio to more complex real estate funds and strategies.
The Premium account essentially functions as an add-on to the Advanced account level. With a $100,000 minimum investment, you can not only utilize all of the Advanced account's features, but you also gain priority access to Fundrise's investment team.
Premium accounts also offer access to specialized, private equity funds that carry longer time horizons.
Self-directed IRAs
Fundrise partners with Millennium Trust Company to provide IRAs and digital investing solutions. You'll need to transfer an existing IRA in order to invest in real estate funds. Once you set up your account, you'll be able to invest in commercial real estate with eREIT products.
In addition to the combined 1% annual fees, you'll pay a $125 fee if you decide to invest in multiple eREITs or invest through one of Fundrise's plans. However, you'll pay a $75 fee to Millennium for a single Fundrise eREIT.
It's also important to note that Fundrise's IRAs are currently only eligible to invest in eREITs, not eFunds.
Fundrise IPOs
Fundrise offers another investment option – itself. You can purchase shares of the company as long as you've got a Core account level or higher. The firm says it plans to make its IPO available to account holders within their first year of investing.
Since Fundrise has a parent company, Rise Companies Corp., you'll be purchasing stake in both Fundrise and Rise.
Is Fundrise trustworthy?
Fundrise has received an A rating with the Better Business Bureau. BBB ratings range from A+ to F, so Fundrise's A indicates that the company interacts well with its customers, promptly acknowledges and settles customer complaints, and exhibits trustworthy business practices.
The BBB assigns its ratings by assessing company information from business and public data sources and reviewing any customer complaints filed against the company.
BBB ratings tend to vary per investment app. For instance, Webull currently has an F rating for amassing numerous customer complaints and failing to respond to them. The investment app can also attribute its F rating to the BBB's concerns with its business practices.
Fundrise hasn't elicited any major lawsuits or public scandals since its founding. The app has had 56 complaints filed against it in the last three years. In the last 12 months, it's closed 46 complaints, according to BBB data.
Rickie Houston, CEPF
Wealth-Building Reporter
Rickie Houston is a wealth-building reporter for Business Insider, tasked with covering brokerage products, investment apps, online advisor services, cryptocurrency exchanges, and other wealth-building financial products. He is also a Certified Educator in Personal Finance (CEPF). Previously, Rickie worked as a personal finance writer at SmartAsset, focusing on retirement, investing, taxes, and banking topics. He's contributed to stories published in the Boston Globe, and his work has also been featured in Yahoo News. He graduated from Boston University, where he contributed as a staff writer and sports editor for Boston University News Service. Learn more about how Personal Finance Insider chooses, rates, and covers financial products and services »
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What Is Fundrise and How Does It Work
Source: https://www.businessinsider.com/personal-finance/fundrise-review#:~:text=Fundrise%20is%20a%20platform%20for,open%20an%20account%20with%20Fundrise.
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