Any smart investor will tell you that putting your money in real estate is a sound decision. After all, land is one of the few things that we can’t make more of. As a result, lots of savvy investors have found ways to profit by owning real estate.
However, the cost of getting started in real estate investing can be hard for many people to meet. Thankfully, modern technology has brought a new way for people to profit from real estate without needing a huge up-front investment. Companies offer a product called a Real Estate Investment Trust, or REITs.
What is a REIT?
A REIT works as a way for people to pool their money to make real estate investments. Because they’re putting their money in with other people, the cost of entry is lower. As a result, REITs can be a great way to start building wealth by establishing a portfolio of real estate investments.
There’s a few different companies that offer this innovative product. This article will look at three of the most popular options. We’ll cover Fundrise, Realty Mogul, and PeerStreet. Each company sets up their products differently. Moreover, each company’s products are better for different types of real estate investments. Some of them are intended only for accredited investors, while others are private REITS which are open to anyone. This guide will help you better understand each company so that you can decide which is the best investment opportunity for your unique situation.
OUR TOP PICK
Realty Mogul is a crowdfunding platform for commercial real estate investment. That means the company focuses on purchasing property for businesses and shops to rent out and use.
Many real estate investors prefer focusing on commercial property because businesses are more likely to pay their bills. Additionally, the return on investment for commercial properties is frequently higher than that of residential properties. Finally, there are frequently fewer legal regulations and codes to follow for commercial real estate, which lowers the cost of operating and boosts your profits.
Realty Mogul Investing Facts
One of the first things that many investors want to know when considering their different options is what the minimum investment is. While Fundrise has a minimum investment requirement of $500, the minimum investment for Realty Mogul is a bit higher – $1,000. That means the barrier to entry is a bit higher than you get with Fundrise.
Another important feature of any investment service is the account fees. Realty Mogul charges account fees of 0.30% – 0.50% per year. That’s on the lower end of account fees offered by REITs, which helps ease the impact of the slightly higher minimum investment.
The investment length for the REITs offered by Realty Mogul spans from 6 to 120 months. As a result, you can pick and choose the product that produces returns to best line up with your investment strategy. Once your investment matures, you can choose to reinvest your profits with Realty Mogul, or you can take your returns elsewhere.
One thing you should be aware of is that you will need to be an accredited investor to reap the full benefits of Realty Mogul’s services. That means you need to have a net worth of at least $1 million excluding your primary residence or an annual income of $200,000 or more.
However, you don’t need to be an accredited investor to invest in the two MogulREITs, which is the product that Realty Mogul has created and positioned to compete with Fundrise. Instead, you’ll just need the minimum of $1,000 for non-retirement accounts and $5,000 for retirement accounts. That means these are the products you should look for if you are just getting started with real estate investment.
The MogulREITs have a more diverse property portfolio than some of the other products offered by Realty Mogul. However, the process works in the same way. You invest money in the MogulREIT. Realty Mogul uses that money to buy and manage properties around the country. You see returns on your investment as a share of the rents paid by the people that are leasing that property.
Pros of Realty Mogul
There are several benefits of working with Realty Mogul. One of the biggest advantages is the pre-vetted investments the company offers. This means that Realty Mogul has a preliminary underwriting process that thoroughly checks each property and renter. This includes things like criminal background checks and other checks to ensure the solvency of each investment. That means you’re more likely to see higher returns than you would be with a non-vetted investment.
Many of the crowdfunding real estate investing services we’ve looked at don’t advertise this kind of diligence. That means that you’re getting an added level of safety and security for your investment. It also means that your investment isn’t likely to be upended by unforeseen issues or problems.
Another advantage of using Realty Mogul is that they don’t have any capital calls. As a result, your initial investment is the most capital you’ll be required to put up. You can, of course, invest more money with Realty Mogul if you want to. However, it’s important to note that your investment can become diluted if other investors in your pool add money to their investment while you leave your investment the same. That can result in lower net returns over time.
Finally, the fact that Realty Mogul offers private REITs in the form of the MogulREITs makes the company an excellent way to get started investing. That’s because you don’t need accredited investor status. After all, there aren’t a ton of people that can meet the qualifications of $1 million net worth or an annual income of at least $200,000. These private REITs open up real estate investing for everyone so you can grow your wealth no matter what your investment status is.
Cons of Realty Mogul
There’s no such thing as a perfect service – and Realty Mogul is a great example of this. While there are some outstanding pros for the company, there are some drawbacks as well.
The biggest drawback is that to get the best results from Realty Mogul you need to be an accredited investor. This status lets you have more control and involvement in your investments. This higher level of management and access can lead to greater returns.
The other drawback of Realty Mogul is that there’s no secondary market where you can sell the positions you have with the company. Instead, you’ll need to wait for any investments to mature. As a result, if you find yourself in a liquid capital crunch, you won’t be able to recoup anything from Realty Mogul immediately.
This isn’t much of a problem for most investing strategies. However, if something catastrophic happens to the rest of your portfolio and you find yourself facing capital calls or in need of liquid capital, then your investment with Realty Mogul won’t offer a solution.
PeerStreet is a good real estate investment service if you’re looking for higher risk-reward investments. That’s because PeerStreet operates similarly to Lending Club. It pools money from investors to offer mortgage loans for single family residential buildings. That means you’re investing in a family’s debt. As long as the family can pay their mortgage bill, you’ll see returns. However, economic disruptions can cause you to take a hit with PeerStreet. We’ll look at some of the specific aspects of the service to help you decide if PeerStreet is right for you.
PeerStreet Investing Facts
PeerStreet requires a minimum investment of $1,000. Moreover, you need to be an accredited investor in order to work with the company. That means if you’re looking to start your portfolio or don’t have accredit investor status, then you should look towards Fundrise or the MogulREITs. PeerStreet doesn’t offer any Private REITs.
Another important facet of working with PeerStreet are their account fees. You’ll pay a startup fee of between 0.25% and 1% to get started with the company. This is higher than many of the other real estate crowdfunding platforms we’ve looked at. However, PeerStreet does also offer the possibility of higher returns than the other services.
An investment with PeerStreet takes between 6 and 24 months to mature. These investments earn an average APR of between 6% and 12%. That’s because the loans PeerStreet offers are for special situations that most banks don’t work with. For example, PeerStreet will offer loans for property rehabilitation, which many banks and investment services don’t work with.
Finally, PeerStreet has a special process to handle loan defaults. They hold all defaulted loans in a bankruptcy-remote entity. This entity is distinct from their standard business. PeerStreet deals with the workout process. That means they’ll ensure the highest possible proceeds from any liquidation to protect your investment.
Pros of PeerStreet
There’s a lot to like about working with PeerStreet. For one, the average annual returns of 6% to 12% are much higher than you get from many investments. Combined with the relatively short maturity period of PeerStreet investments, that means you can see lots of profits really quickly
Another advantage of PeerStreeet investing is the low minimum investment. A $1,000 investment for an accredited investor isn’t much. That means you can see how the service operates with minimum risk. If you like the service and the results, then you can invest more with them. If you’re not satisfied with your results, then you aren’t out too much capital.
PeerStreet also allows a tremendous amount of diversification when compared to other real estate crowd funding platforms. You can pick between different types of properties and loans, as well as different states and locations. As a result, you can use your own insights to find the best returns possible.
Finally, there’s no interest rate risk with PeerStreet. That’s a result of the shorter investment maturation periods that PeerStreet offers. Things like long-term bonds risk interest rate fluctuations. That can alter the return you can expect from those investments. This undermines the predictability of your returns which can throw a wrench in your long-term investment strategy.
Cons of PeerStreet
There are a few drawbacks that you need to know about when you’re considering PeerStreet. The biggest drawback is that they don’t offer any private REITs. That means you’ll need to be an accredited investor in order to invest with the company. As a result, it’s not an option for people that have a net worth of less than $1 million excluding their primary residence or an annual income of $200,000.
Another drawback is that PeerStreet has a higher risk of producing a loss. That’s because of the types of loans and debt products they invest in. This can lead to higher returns, but you need to be aware that a loan default is always possible.
Finally, investments with PeerStreet aren’t liquid. There’s no secondary market for the loans and investments that you make through the service. You can’t sell or trade your investment with PeerStreet. As a result, you’re locked in until your investment matures.
How Does Fundrise Work?
Fundrise allows small investors to join in on private real estate investments via crowdfunding. Pool small amounts from scores of individual investors, Fundrise is able to invest in individual private real estate deals across all property types (office, multifamily, retail, industrial).
As is common with private real estate investing, Fundrise goes into deals with the objective of turning around/enhancing undervalued real estate property.
They either renovate/stabilize properties for a quick resale (flip), or improve the cash flow generation of a property in order to produce distributions for investors.
Turnaround situations can be riskier than other real estate investments. For more conservative investors, Fundrise offers opportunities to invest in property that have already been stabilized. These properties are operated as-is, and can generate cash flow for investors.
Types of Portfolios Offered by Fundrise
In order to provide diversification and to reduce risk, Fundrise offers small investors the opportunity to invest in several portfolios tailored to varied investor objectives.
The Starter Portfolio
The starter portfolio consists of two separate sub-portfolios: Income eREIT and Growth eREIT.
Income eREIT invests in real estate loans (first mortgages, mezzanine debt, etc). This portfolio provides both low volatility and consistent cash flow generation.
Growth eREIT invests in properties with a high likelihood of appreciation. This is a riskier portfolio, but over a long time-frame can produce returns that outsize those of the Income eREIT.
Other Portfolios Offered
Fundrise also offers a second set of portfolios. These portfolios require a larger minimum investment ($1000), but can provide location-specific diversification. Investors can mix and match any of these five funds:
- East Coast
- West Coast
As implied by the fund names, the last three funds invest in deals specific to the region indicated.
Fees Charged by Fundrise
As an investment management platform, Fundrise does charge fees for its service. Unlike index funds, alternative investments such as private real estate typically have higher management fees to compensate for the complex nature of the investment.
Fundrise’s fees consist of an acquisition fee (2% of asset value at time of purchase), plus an annual management fee of 1%.
One plus of Fundrise’s fee structure is that there are no other brokers involved in the process. All fees due are only those charged by Fundrise.
How To Start Investing With Fundrise
To start investing with Fundrise, you must create an account. The account setup requires your name, phone number, residential address, as well as your social security number.
After providing this personal information, Fundrise will send you a prospectus that discloses all the details of your potential investment.
It is imperative you read and fully understand the terms and conditions of an investment via Fundrise. Alternative investments have certain caveats that traditional stock market investments typically do not have.
After you have read and acknowledged the investor disclosure, you are now ready to invest with Fundrise.
Your account can be funded either via wire transfer or by linking your checking account. There may a required waiting period of a few days for the transaction to clear and your funds available to invest.
Why Fundrise May Be A Great Investment Product For Your Portfolio
- Fundrise can give your portfolio exposure to private commercial real estate. Historically, small investors have been unable to invest in private commercial real estate. With Fundrise, you can expose your portfolio to this valuable alternative asset
- Fundrise requires a very low account minimum. With just $500, you can begin investing in commercial real estate deals. Try doing that with a traditional real estate fund.
- Fundrise is a great way to get started investing in commercial real estate. The low minimum investment is a low-commitment way to determine if the asset class is right for you.
- To put your fears at ease, Fundrise currently offers a 90-day money back guarantee for first-time investors with the platform.
- You do not have to be an accredited investor. Unlike other crowd funders in the real estate space, you do not have to meet the criteria of a high net worth investor.
- Private commercial real estate investments are an alternative to traditional stock market investments. Historically, they have offered lower volatility, and lower correlation to the public markets.
- Fundrise’s portfolios are highly diversified, lowering your risk exposure with no required due diligence on your part.
- Fundrise takes care of the details. Private real estate investing requires a lot of behind-the-scenes work. For busy professionals, there is simply not enough time to conduct the required due diligence, deal hunting, negotiation, and property revamp commercial real estate investment requires.
- Fundrise provides quarterly distributions. Private real estate is an illiquid investment, but Fundrise offers its investors the opportunity to generate cash flow from their investments.
Caveats to Consider Before Investing With Fundrise
- Private real estate investments (such as those offered by Fundrise) are highly illiquid. It is difficult to buy or sell real estate within a few months, let alone a few days. Stock market investments provide a greater deal of liquidity. The trade off is that private commercial real estate can be a great long-term alternative to index funds and other stock market investments. If you are looking for long-term returns uncorrelated to the public markets, Fundrise’s portfolios may be a strong consideration for your portfolio.
- Real estate crowdfunding has not yet seen a correction. Funds such as Fundrise did not develop until just a few years ago, when the commercial real estate market was bouncing back from the Great Recession. Because of this, real estate crowd funders have not yet seen a downturn, which has allowed them to post above-average track-records. It is important to note that past performance is not indicative of future results, and a recession may cause losses greater than anticipated for the real estate crowdfunding platforms.
- Fundrise may not be a tax-efficient investment. Unlike index funds and other tax-efficient investment products, distributions from Fundrise’s eREITs will not be considered dividends like the ones seen from stock market investments. Some or all of your distributions may be taxed as regular income, which is taxed at higher rates than dividends.
How Does Fundrise Stack Up To The Competition?
There are several competitors to Fundrise, both in the realm of real estate crowdfunding, as well as in the public markets. Here is an inclusive but not exhaustive list of Fundrise’s competitors:
- Peer Street
- Vanguard REIT
How Fundrise Performs Compared to Peer Street
PeerStreet is a similar investment product to Fundrise, with one key difference: PeerStreet is only available to accredited investors. Accredited investors, also known as high net worth investors, are those who have a high enough portfolio value and/or income to be considered sophisticated enough for alternative investments.
PeerStreet makes up for this requirement by offering distributions bi-monthly, as opposed to the quarterly distributions offered by Fundrise. For investors seeking cash flow generation from their portfolio, and meet the accredited investor requirements, PeerStreet may be a more attractive option.
How Fundrise Compares Against RealtyShares
RealtyShares is another major crowd funder in the private commercial real estate space. RealtyShares requires a higher account minimum of $10,000. Unlike Fundrise, which offers highly diversified portfolios across all major property types and geographic regions, RealtyShares specializes in acquiring and turning out residential properties.
Fundrise Versus Vanguard REIT: Alternative Real Estate Versus a REIT Index Fund
When considering alternative stock market investments (such as hedge funds), accredited investors like to compare the fund’s performance to that of the S&P 500 (the market’s typical barometer for stock market performance). The rationale is that a fund should in theory provide risk-adjusted returns that outpace the broad market, in order to justify the higher management fees alternative investments require.
To do the same comparison for private commercial real estate investments, it is key to compare their results to that of the Vanguard REIT index fund.
Vanguard is the industry leader in passive investing. While it has been common knowledge that most fund managers fail to beat the market, Vanguard took that finding and said “if you can’t beat them, join them”. Creating funds that mimic the broad stock market returns via high diversification and passive investing, Vanguard’s index funds have become a fast growing investment vehicle for individual investors.
Vanguard’s REIT fund essentially tracks the performance of REITS, or real estate investment trusts (publicly-traded owners of commercial real estate).
The key advantage of Vanguard’s REIT fund is not the performance, but the liquidity. While Fundrise’s funds are highly illiquid and require a long time horizon, Vanguard’s REIT exchange-traded fund can be bought and sold at any time, making it a more flexible option for small investors.
The downside is that REIT performance is not highly correlated with private commercial real estate investments. Historically, REITS have shown closer correlation to the stock market at-large (such as the S&P 500), and have been more volatile than private commercial real estate investments.
Bottom Line: Is Fundrise Right For Your Portfolio?
If you are a small individual investor looking to take advantage of the many opportunities presented by private commercial real estate, Fundrise is a great option to get your feet wet in this space.
With a low account minimum, you can risk as little as $500 and see if private commercial real estate investments are right for your portfolio.
The key caveat of Fundrise is the liquidity of the investment. Are you looking at a long-time frame (5 or more years), or will you require liquidity within a few years or less? Before committing your money to private real estate, consider if you are willing to trade liquidity for the potential for low volatility returns that have historically shown low correlation to the public markets.
It is also important to take into account that real estate crowd funding has come of age during a bull market in commercial real estate. We have not yet seen how these platforms perform in weak market conditions.
Putting it all together, depending on your personal investing objectives and risk tolerance, Fundrise may be a strong choice for making an small initial investment in private commercial real estate.
Choosing a Real Estate Investment Platform for REITs – Fundrise vs Realty Mogul vs PeerStreet
Now that you’ve got a better idea of the different companies, you’ll need to decide which option is the best for your needs. We’ll help you make the best decision based on your unique investment needs.
The first factor to consider when deciding on a crowdfunding real estate investment platform is whether or not you’re an accredited investor. As our reviews above state, PeerStreet only accepts investments from accredited investors. That means if you don’t meet those qualifications, then PeerStreet isn’t even an option for you.
However, if you are an accredited investor, then the options are wide open. That means you’ll need to decide based on other factors. We recommend looking at the minimum investment required, investment maturation schedule, and possible returns.
If you’re looking for a high-risk, high-reward investment opportunity and are an accredited investor, then PeerStreet is an excellent option. The flexibility and high returns that PeerStreet offers makes it a solid choice in this situation. However, that doesn’t mean that you shouldn’t carefully evaluate your specific PeerStreet investment options to ensure that you completely understand the risks involved with your investment.
If you want a lower-risk, lower-return option, then Realty Mogul is a better option for accredited investors. That’s because the investments are safer because of the types of loans and debt that the company invests in. This means you’re less likely to see a loss, but your returns won’t be as high.
For unaccredited investors, there’s only two options – Fundrise and Realty Mogul. The first step to deciding between the two is based on each company’s minimum investment. If you are looking to invest at least $1,000, then Realty Mogul is a good option. However, if you don’t have $1,000 to get started, then you should favor Fundrise.
Another way to choose between the three options are the maturation dates. Fundrise doesn’t have a set maturation date. That means the capital that you direct into Fundrise is more liquid than money invested in Realty Mogul. However, Realty Mogul has a wide range of maturation options, ranging from 6 months to 5 years. That means it allows for more planning and predictability than you’d get from Fundrise.
Account fees are another way to evaluate the choice between Fundrise and Realty Mogul. Fundrise charges an account fee of 1% per year, whereas Realty Mogul has account fees of 0.30% to 0.50% per year. That means lower fees, but your capital will be tied up until the investment reaches maturity.
Finally, you can look at the options that each service provides. For non-accredited investors, Realty Mogul only offers two REITs, MogulREIT I and MogulREIT II. Fundrise has a large amount of options for you to invest in. you can invest in an eREIT, which is a non-traded REIT that invests in a diverse array of commercial real estate. You can also set up an eFund, which is a private fund that invests in properties with an eye towards growth, rather than income.
Fundrise also has another way for you to make money, by investing in the company itself. Fundrise sells shares of itself through what they call an internet Public Offering, or iPO. There are some qualifications though – you need to have at least $1,000 in your Fundrise account and be on one of the advanced plans. You’re also limited to 25% of your account balance for the iPO.
As you can see, there are lots of ways to get involved in the business of crowdfunded real estate investments. Each company and product offers its own unique combination of drawbacks and benefits. The key is matching your needs and wants with the right company and product.
Use the information in this guide to make an informed decision about your investment future. Real estate is one of the safest and most profitable investments in the modern market. If you’re new to investing don’t let this intimidate you but if it does we cover investing for beginners in another article. Also don’t let the fact that you can’t afford the cost of buying another property prevent you from growing your wealth and taking advantage of this current economic trend.
For investing alternatives, you can also look at Motif investing or we also review the best investment app for beginners in another article. The point is don’t feel tied to one choice, you can and should diversify the methods by which you invest. There are more choices than ever.
Realty Mogul Questions
This section answers some of the most common questions people have about Realty Mogul.
What is Realty Mogul?
Realty Mogul is a crowdfunded real estate investment platform. They offer two private REITs for unaccredited investors and host of real estate investment options for accredited investors.
Is Realty Mogul worth it?
For many people, yes. Realty Mogul provides several ways to invest your money in real estate, both for accredited and non-accredited investors.
How does Realty Mogul work?
Realty Mogul pools your money with other investors and uses that money to buy and manage properties. You get returns on your investment when the people leasing those properties pay their rent.
Is Realty Mogul a good investment?
That depends on your specific situation. Realty Mogul is a good way to get started with real estate investing. However, you can’t trade or sell your position with the company, so it’s not a good investment if you might need liquid capital soon. If this is an option you want then check out Acorns Investing app reviews.
Has anyone lost money in Mogul Realty REIT funds?
There aren’t any published facts about whether anyone has lost money on Mogul Realty REIT funds. However, all investments come with the risk of loss. That means you should carefully evaluate the investment before making a decision.
How much can you make on Realty Mogul?
That depends on how much you invest with the company. The average returns for Realty Mogul are 1-3%.
Is it easy to invest more in Realty Mogul?
Yes, you can add funds to your investment account at any time through your Realty Mogul Dashboard. You can use the Dashboard to manage your investment.
Is Realty Mogul for accredited investor?
Realty Mogul offers several products for accredited investors and also offers two private REITs for non-accredited investors.
What’s better Realty Moguls or Rich Uncles?
That depends on what you’re looking for – you’ll generally see a higher return with Realty Mogul, but Rich Uncles has a lower cost of entry.
How to contact Realty Mogul?
You can contact Realty Mogul directly by calling 877-977-2776. You can also email [email protected] with any questions you have.
We’ll cover some of the most common questions about PeerStreet in this section.
What is PeerStreet?
PeerStreet is a crowdfunded real estate investment platform. It focuses on high-risk, high-return loan financing and is only an option for accredited investors.
Are PeerStreet 30-day notes risk free?
No investment is completely risk-free. However, there’s a much lower risk with PeerStreet’s 30-day notes because of the nature of the investment.
Are PeerStreet hours long?
PeerStreet mostly operates as an online entity, so you can get much of the information you want on them 24 hours a day, 7 days a week.
Can I open a JTWROS at PeerStreet?
No – you will not be occupying the property that you invest in. Moreover, the properties you’re invested in will be part of a trust owned by many other investors.
Can you invest on PeerStreet without being accredited?
PeerStreet doesn’t currently have any private REIT offerings for non-accredited investors. That means you can’t invest with them without being accredited.
How does PeerStreet check for accredited investor?
PeerStreet checks with the SEC regarding accredited investors because the regulatory nature of the products they offer require investor accreditation by the SEC.
How often do PeerStreet loans default?
There’s no public information for how often a PeerStreet loan defaults. However, the platform has a unique method of handling defaults designed to protect investors.
How to contact PeerStreet?
You can contact PeerStreet on Facebook, Twitter, [email protected], or by calling 844-733-7787
How to evaluate PeerStreet loans?
That’s entirely up to you – PeerStreet provides the information you need to decide if the potential return on an investment is worth the risk. Use this information to decide if you want to invest with the platform.
How to invest with PeerStreet?
To invest with PeerStreet you just need to be an accredited investor and make an account. Your minimum investment is $1,000. Once you set up your account and fund it, you can get started.
Basic Facts About Fundrise
Before making an investment in Fundrise, however, a first time investor needs to be aware of certain facts about this relatively new concept. The most commonly asked questions about Fundrise are as follows:
What is Fundrise?
Fundrise is a crowdfunding platform that encourages small investors to make investments in the real estate sector by way of equity ownership purchase in commercial real estate.
It works with a view to enhancing real estate that’s undervalued; renovating/stabilizing properties for flipping; or in improving cash flow generation of properties to earn profits for its investors.
Where is Fundrise located in Washington, DC?
1601 Connecticut Avenue Northwest, 3rd Floor, Zip Code – 20009
How to contact Fundrise?
Visit their website at https://fundrise.com/about or visit them personally at the above mentioned address. Since Fundrise attracts most of its investments online, it’s more viable to visit their website and take your investments further.
Is Fundrise accredited?
No. In fact, no investor needs to be accredited to indulge in investing in real estate through Fundrise.
Is Fundrise legit?
Yes, it is. Over the last 6 years, there have been no negative reports about any illegal activities or serious customer complaints about the company so far.
Is Fundrise a good investment?
Yes, it’s good if you are a small investor. With a minimum investment of $500, you could diversify your portfolio, provided you’re thinking long-term and have ample risk tolerance.
Is Fundrise a safe investment?
Yes, but there are certain drawbacks like cost burdens and high fee loads; management and origination fees; special servicing fees for non-performing assets; disposition expenses as also liquidation fees for redeeming shares.
Is Fundrise worth it?
For a small investor, looking at 8-10% annual ROI, Fundrise is worth it because it exposes their portfolio to the real estate sector; comes with a 90-day money back guarantee for first-time investors and has a highly diversified portfolio.
Is Fundrise a scam?
No, it isn’t because since its inception in 2012, no negative reports have been found. There are no serious customer complaints or government enquiries so far either.
How does Fundrise work?
Fundrise accepts your investment in an electronic real estate fund (eREIT). It invests that money in multiple investment channels ranging from equity to loans and in real estate to earn profits, distributed as dividends to shareholders.
Should I invest in Fundrise?
Yes, you can with as little as $500 and your income is fully passive. However, your average earnings that range between 6 to 8% are subject to 3% of fees payable.
Can Fundrise give you financial freedom?
To a degree, yes. You get quarterly dividends, depending on the company’s performance and also a share of the company’s rental income. You could also sell your Fundrise shares at a premium.
Can you make money on Fundrise?
Yes, you can earn passive income, provided you have a long-term outlook and are prepared to hold on for five years at least and want an alternative to stock and bond trading.
How much can you make on Fundrise?
It all depends on how much Fundrise actually makes. Every profitable transaction and rental income of the company gets you a dividend. Selling off shares at a premium also helps you earn.
How much a month I can make with Fundrise?
According to published figures, roughly about 0.6% per month or 8% annually on average. This again can go up or diminish depending on the company’s performance.
How much to expect from investing in Fundrise?
According to the company’s historical performance, about 8 to 10 percent annually. However, prevailing conditions in the real estate sector will determine your final annual earnings.
What is Fundrise 2.0
The Fundrise 2.0 is a real estate focused Robo-Advisor that provides investing tools to match customized investor needs and is the first of its kind in real estate investments.
Is Fundrise a REIT?
Yes, it is. Fundrise allows the average investor to access returns on real estate, which they otherwise can’t through a conventional REIT or on their own.
When is Fundrise going public?
Fundrise has already gone public in February of 2017. It’s initial offering was subscribed well and showed ample investor trust in the organization.
When will Fundrise be open to the public?
In August 2018, Fundrise offered 10,000,000 shares of Class B Common Stock and settled about 4,474,379 shares of Class B stock.
Is Fundrise IPO a good investment?
Yes, provided you are looking at a 5 to 10-year period. However, it’s prudent to keep about 10% of your investable assets in it because the concept is relatively new.
Investing & Divesting in Fundrise: Methods & Options Available
Since Fundrise is an online platform, investing in it is easy. All you need is to open an account, study the prospectus that’s sent to you and take a call about making an investment. Earnings too can be redeemed anytime and all funds inclusive of payouts and dividends get credited to your bank account. The following are the FAQs on how to invest in Fundrise:
How to get started with Fundrise?
Create an online account first by submitting your name, residential address, phone number and social security number. Then study the detailed prospectus on available investment options and invest through your bank account or wire transfer.
How can you fund a Fundrise account?
You can link your bank account or make a manual entry of your account and routing numbers. ACH transfers are mandatory for transactions under $25,000. Investments above $25,000 are doable through wire transfer.
Why doesn’t Fundrise give account numbers?
Your bank account info is your identity and the bank routing number at the time of purchasing shares is, therefore, compulsory.
Can Fundrise take automatic deposits?
No, it can’t unless you specifically instruct your bank to make investments on your behalf in Fundrise. In addition, you can add a minimum of $100 on your own.
Can international investors invest in Fundrise?
No, Fundrise is available only to US residents. However, US-based entities like LLCs, LPs, and trusts with a US tax ID number can invest.
What is a Fundrise stock ticker?
The Fundrise stock ticker is a digital information service available on its website that keeps you posted on its current stock prices.
Which Fundrise investment plan is right for you?
This depends totally on your investment and risk bearing capacity. However, long-term plans are most suitable to get the best returns.
Which Fundrise plan is best?
The plan that offers maximum diversification while also reducing risk is the best. You can opt for any of the 4 plans that Fundrise offers based on your investment objectives.
How to determine your performance for Fundrise?
You can communicate directly with Fundrise to know your investment’s performance through regular updates and reporting as also tax filing delivery.
How much does Fundrise earn?
As per published figures, Fundrise revenues rose to US $30 million in 2017 with 11.44% return on an average. The monthly payout has been to the tune of 0.95%.
How is Fundrise income paid out?
You get quarterly dividends; payouts on earned rental income; overall appreciation in asset value on the completion of the asset’s term of investment; and by selling off Fundrise shares at a premium.
How long does it take for Fundrise investment to settle?
It depends on the plan that the investor selects but the investment is generally illiquid and long-term in nature. It’s also dependent on the investor’s overall portfolio allocation and prevailing market conditions.
Does Facebook use stripe transfer for Fundrising?
No, it doesn’t. Even though stripe transfer is a secure method, only bank account linking and wire transfers are accepted.
Why does Fundrise take out multiple withdrawals?
Several redemption plans allow shareholders to redeem on a quarterly basis, subject to certain limitations on the full amount in one calendar quarter. However, inadequate available redemption funds make way for redemption on a pro rata basis.
What is in the Fundrise Starter portfolio?
The Fundrise Starter Portfolio needs an initial investment of just $500 and subsequently splits it between Income and Growth eREITs.
Can I fund my Fundrise account with a credit card?
No, you can’t. Only bank account linking and wire transfers are accepted. For transactions under $25,000, ACH transfers are mandatory. Investments above $25,000 need to be wire transferred.
How easy is it to add money to Fundrise?
You can add funds by clicking the “Add Funds” icon on your investor dashboard and add at least $100. You need to invest an additional $1,000 to upgrade to an advanced plan.
Can you invest in Fundrise each paycheck?
Yes, if you leave specific instructions with your bank to make investments or manually do it yourself from your account dashboard.
How to auto invest with Fundrise?
Enable the auto-invest feature in your account setting. You can also avail the Fundrise “DRIP” or Dividend Reinvestment Program to automatically reinvest all earned dividends back into your plan.
How to evaluate investments on Fundrise?
You can evaluate your investments from annual audited financial statements on Form 1-K filed with the SEC; and from regular reports and updates on your investment’s status from Fundrise.
How to divest from Fundrise?
Shares are redeemable by clicking on the Redeem Shares icon in your Account Settings and filling out the Redemption Request Form and submitting it online.
How do you get your principal back on Fundrise?
You get your principal back after a minimum 60-day waiting period after submitting your redemption request. However, the redemption value may attract a liquidity penalty of up to 3%.
When can you pull out money from Fundrise?
For first time investors, withdrawal is possible within 90 days through the Fundrise money back guarantee. For others, a 60-day waiting period follows after submission of the redemption request.
How to withdraw money from Fundrise?
You can withdraw money monthly, following the compulsory 60-day waiting period after you submit the redemption request. First time investors can withdraw within the first 90 days.
How do I sell my Fundrise investment?
Go to your account settings and click on the Redeem Shares icon there. Fill out the Redemption Request Form and submit it online. Monthly withdrawal can be done thereafter.
How to liquidate Fundrise?
Each eDirect Fundrise investment has its own redemption plan on a monthly basis, after a waiting period of 60 days following submission of the redemption request online.
How do I sell my stake in Fundrise?
You sell off your stake by redeeming your shares online after a mandatory 60-day waiting period. Just fill in the online redemption request form and click on submit.
Do you pay taxes on Fundrise withdrawls?
Yes, because Fundrise withdrawals are taxed as regular income and often its dividends are taxed at a higher rate than stock dividends.
How to delete a transaction on Fundrise?
Go to your account settings and click on the Delete Transaction button. A notification confirming the deletion will be sent to you.
How long does it take to get upgraded on Fundrise?
As soon as you make an additional investment of $1,000, you can upgrade to another plan. It’s almost instantaneous as the whole process is online.
Do I have to submit Schedule K to Fundrise?
Yes. eFund investors receive a K-1, K-1 information, or substitute K-1, reflecting their annual share of the fund’s taxable income or losses.