Fundrise Evaluation

For those who have a limited amount of money to spare, there is Fundrise Review, an online real estate firm that acts as a pooling mechanism for investors to acquire commercial and residential properties.

When investors purchase one of Fundrise's four portfolios—Starter, Supplemental Income, Balanced Investing, or Long-term Growth—they buy shares in the Interval Fund, REIT, or refund. The composition of each plan, including the REITs and funds that comprise them, is set by Fundrise. Investors can gain access to more real estate projects, among other perks, by upgrading to a more advanced account tier on Fundrise.

Functions of FundRise That You Should Know

To the general public and those without accreditation: While some online real estate platforms restrict access to only "accredited investors," those with a net worth of at least $1 million (not counting their primary residence) or an annual income of at least $200,000 (for individuals) or $300,000 (for couples) are eligible to purchase many of Fundrise's products. (RealtyMogul, Motiv, and DiversyFund are other online real estate investment platforms that welcome non-accredited investors.)

A platform that is simple to navigate:

It takes no more than 10 minutes to sign up, and that's assuming you've already read the extensive investor disclosures (and you should). After registering with your name, phone number, and SSN, you can choose to fund your account using an ACH transfer (i.e., linking your bank account), manually entering your bank information or wire transfer.

Through its redemption programme, investors can sell their shares back to Fundrise, but only after paying a 1% redemption fee to the fund if they have yet to hold on to them for at least five years.

Due to the severe economic uncertainties caused by the coronavirus outbreak in March 2020, Fundrise temporarily halted redemptions and did not resume them until July 2020. You should know that competing businesses in this sector employ similar methods before making any major real estate purchases.

Interval Fund

Fundrise's Interval Fund is a more liquid alternative to REITs and funds, giving investors more frequent opportunities to redeem their holdings at a discount. Unlike REITs and funds, there is no quarterly redemption fee for shares in Interval Funds.

Fundrise's Interval Fund is more significant than its other funds, so it can potentially contain more assets and provide greater diversity than its smaller counterparts. The same advantages enjoyed by REITs and funds are likewise offered.

Non-Traded REITs

Fundrise's eREITs are non-traded REITs, meaning they are complicated to sell quickly in the event of a price drop. Investors who wish to sell their shares may need help to do so. (For further information on potential dangers associated with non-traded REITs, see this alert issued by the Financial Industry Regulatory Authority, or FINRA.)

Fundrise claims to save investors money by establishing a direct connection between investors and real estate, although this connection may come with additional expenses. Fundrise is able to keep its fees low because we cut out the broker-dealer. However, investors may need help to foresee some of the expenditures associated with a real estate transaction. Fundrise lays out the costs it charges for asset management and advice. Particular funds may tack on extra charges for development or liquidation depending on the asset in question. These costs are buried in the offering circulars and are hard to find on the main page.

Should you sign up with Fundrise?

The Fundrise platform makes it simple to invest in real estate to diversify your portfolio.

Crowdfunded real estate platforms like Fundrise, however, have yet to be put to the test during a slump in the real estate market. For some investors, Fundrise may delay redemptions in the case of a housing market crash, for instance. (There are several variables at play; cautious investors should be aware that the five strategies we present here are just some of the options available to them regarding real estate investment.)

The Interval Fund does not charge an early redemption fee, but the Core, Advanced, and Premium credits and refunds may. If this is a worry of yours, consider opening a regular brokerage account, allowing you to choose from a wider variety of options. (Here are the steps to opening a brokerage account and some things to consider.)

How do we evaluate property-related websites?

Companies that offer non-traded real estate investment trusts (REITs) or private equity to investors in the United States are given a thorough evaluation and ranking by NerdWallet. Our objective is to provide an unbiased assessment of service providers so that you can make educated decisions about which company is best for you. There are firm standards of editorial honesty that we follow.