Fundrise — Own American Real Estate

Real estate, outside of major economic downturns like the Great Recession, has been a very lucrative investment opportunity. Typically, people are hesitant to get involved in that market (Real estate) due to high upfront expenses, the inability to handle property management, or both. Don’t want to get the roof replaced? Not feeling like waking up in the middle of the night to fix the furnace for a tenant that called explaining the unit stopped working? With Fundrise, you are able to have your dollars work for you without you being physically near the property.

To participate with Fundrise, you need to be an American citizen and have $500 for the initial investment. This is important for two reasons:

1. Fundrise builds and maintains projects in the United States and only allows U.S. citizens to invest with them. It does not allow foreign nations to invest in U.S. real estate to profit off American citizens. By only allowing U.S. citizens to invest in U.S. real estate, they are allowing the American economy and its people to profit.
2. Prior to Fundrise, you needed to be an accredited investor (Someone with $1 million in net worth and an annual income of $200,000) to invest in larger scale real estate projects. Now, if you have $500 and want exposure to real estate all across America, you can.

The more money Americans are investing in real estate means more construction projects take place, housing demands are met and profits are being generated for all who participate. As money flows into real estate, materials are purchased, people are hired, buildings are constructed and the economy grows. By investing in Fundrise, you yourself get to see local communities, cities and a nation’s infrastructure grow while increasing your net worth.

They are extremely transparent with each property your money is invested in. They offer projected returns, completion dates and images of construction sites. You have full transparency of what is taking place with each and every property your money is diversified across.

“Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.” — Andrew Carnegie, billionaire industrialist

Fundrise has three key investment options you can invest in:

1. Supplemental income — If you choose this type of investment with Fundrise, they focus your money on projects that have high cash flow from tenants. They then distribute a portion of those profits to you, the investor. Think of standard and upscale apartment units in high growth areas that have a steady flow of people needing a place to live.
2. Balanced investing — This investment vehicle focuses on real estate with high cash flow and long term growth projections. A portion of your return comes from dividends and appreciation (When the properties you are invested in increase in value).
3. Long-term growth — You will gain dividends through this fund like the other two investment plans, however, the focus is on long term asset value appreciation. Imagine multi-million dollar projects that will increase in value overtime.

Here is a great way to understand how they structure their investments. Pretend you bought a house to rent out. Do you want the majority of your return (Profits) coming from what the tenants pay you or from how much the value of that house appreciates? Once you answer that question, how you invest within Fundrise becomes that much more clear. The main difference here is that instead of only acquiring one property and one tenant, you are diversified over dozens of properties across the country with hundreds of units.

As the amount you have invested with Fundrise increases, you will begin to have more options with what specific areas of the country you want to be invested in. This way, if you think a certain part of the country will experience more growth than others, you can invest in projects that are being built and maintained in those particular parts of America.

When thinking about investing in real estate, the question should not be if, but when. There are a couple of major factors to consider when investing. How is the overall economy doing and are interest rates relatively low? Remember, the lower the interest rates the cheaper it is for companies to borrow money which increases profits. Fundrise navigates those two factors incredibly well. They will increase their cash flow into projects when those two things are working towards their advantage, which is ultimately, your advantage.

Before I started investing in Fundrise in 2017, I wanted to know that my money was as secure as possible and that I could not lose it as easily as the stock market. The stock market gives people the ability to sell their shares at any point, which has its pros and cons. Your cash is always available in the stock market, but everyone else is able to pull their money out of the investment just as easily as you. Remember 2008 and 2009? Everyone was selling their investments, even when it was at a loss. Fundrise uses logic instead of emotions during times like those. To ensure the longevity of their company and the shareholders investment, they maintain the necessary cash to navigate through economic downturns.

This ultimately protects you and the money you have invested. If everyone had the ability to remove their money whenever they pleased, they could not ensure shareholders a steady return nor could they keep their business afloat whenever the market showed signs of frailty.

It is important to note that Fundrise considers your investment to be an illiquid asset for the first 5 years. You can request to have your money redeemed before then, but there are certain stipulations that they consider before doing so. If you wanted more information on this, click the following link — https://fundrise.com/education/faq.

For the fact your money is being invested in real estate, being able to fully redeem your cash within 5 years is remarkable. That is, if you want to sell it that soon. The longer your money is working for you in the real estate market, the more dividends and appreciation you will be receiving.

Seeing that I am about to enter my third year with Fundrise, I have no desire to redeem my cash any time soon. I have seen approximately 10% annual returns since investing with them.

To put this in perspective, for every $10,000 invested, between dividends and asset appreciation, you can currently expect an annual return near $1,000. This might fluctuate as the market adjusts, but this is a solid return without the constant price fluctuations that you see in the day to day stock market. Even with their high returns, their advisory fees are very reasonable, which falls between 0.85-1%. You get immediate real estate exposure, diversification and professional property vetting for that fee. Not to mention the years of experience and knowledge the people have that are running Fundrise.

If you decide to invest in Fundrise and want the first three months of advisory fees waived, follow this link — https://fundrise.com/r/klv4v.

Populations continue to grow. People continue to move to the United States. All of this means that real estate is going to continue to be an outlet that can bring generational wealth to you and your family. Here is one final quote for you, just because I love quotes that bring good perspectives.

“Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.” — Theodore Roosevelt, U.S. president

Fundrise gives you access to communities and cities that you may not even live near. We live in a time where with only a few clicks of a button you can own portions of real estate all across America. Back in the day, the majority of people could only invest in the area they lived near, not anymore. The entire country is your backyard. Happy investing!

 

*This is not financial advice. For educational purposes only.