Fundrise is a leading online private real estate company with over $3.3 billion in assets under management and over 500,000 investors. The firm runs multiple real estate funds that invests in commercial real estate predmonantly in the Sunbelt region where valuations are lower and net rental yields are lower.
With an investment minimum of only $10, Fundrise funds are accessible to all investors, not just accredited investors — defined in U.S. securities law as having a net worth of more than $1 million, not including their home’s value, or annual income of at least $200,000 for individuals or $300,000 for a couple.
Fundrise's main products are real estate investment trusts, or REITs, which generally invest in income-producing real estate, either through buying and managing buildings or by holding mortgages. The company calls its products “eREITs.” Fundrise also offers eFunds, in which investors’ pooled money is used to buy land, develop housing and then sell it.
Investors purchase shares of Fundrise's funds by investing in one of its three main strategies: Balanced Investing, Supplemental Income, or Long-Term Growth. Fundrise then determines the mix of eREITs and eFunds in each plan, as well as the underlying properties.
In mid-2023, Fundrise launched Fundrise Pro. Fundrise Pro is built for private real estate investors who want to have more control in shaping their investment portfolio according to their beliefs about the market.
Disclosure: Fundrise is a long-time sponsor of Financial Samurai and Financial Samurai is an investor in Fundrise funds. Financial Samurai only works with the best companies that can provide the most value to its readers.
Fundrise Pro Review: Four Key Features
So what do Fundrise Pro investors get that regular Fundrise investors don't get? Here are the four main features:
- Directly invest in specific funds: Make one-off investments into specific funds
- Build your own custom investment plan: Build your own portfolio with full allocation control across our various investments
- Expert-level data: Connect to unique tools including Basis™, Fundrise's proprietary data warehouse, to make better wealth building decisions
- Exclusive content: Access Fundrise-curated insights from The Wall Street Journal
Cost Of Fundrise Pro
Two groups of Fundrise investors gain access to Fundrise Pro for free: 1) existing investors with an account balance of over $5,000, 2) investors who have ever placed a direct investment.
If you are not part of these two groups, then the cost to gain access to Fundrise Pro is only $10/month or $99/year. The first 30 days are free. You can cancel any time if you wish.
The regular subscription price to The Wall Street Journal is $9.75/week or well over $200/year. Hence, Fundrise Pro offers great value for the Wall Street Journal content alone.
But what's really value about Fundrise Pro is the user's flexibility to directly invest in specific funds and build your own custom Fundrise investment portfolio.
Available Funds To Invest In For Fundrise Pro Members
Unlike regular Fundrise investors who choose between three categories: Balanced Investing, Supplemental Income, or Long-Term Growth, and the Fundrise invests accordingly, Fundrise Pro members get to investors get to invest directly in all the available funds that are open.
For 2023, the following Fundrise funds are currently available for direct investment:
Flagship Real Estate Fund ($1.4B net assets, Jan 2021 inception date, focus on appreciation)
Income Real Estate Fund ($567M net assets, April 2022 inception date, focus on cash flow)
Growth eREIT ($277M net assets, February 2016 inception date, focus on appreciation)
East Coast eREIT ($175M net assets, October 2016 inception date, focus on appreciation)
Growth eREIT II ($164M net assets, September 2018 inception date, focus on appreciation)
Development eREIT ($129M net assets, July 2019 inception date, focus on appreciation)
Growth eREIT VII ($88M net assets, January 2021 inception date, focus on appreciation)
Example Of A Fundrise Pro Custom Plan
Below is an example of a Fundrise Pro custom investment plan that I created. On the left hand column are all the available funds for direct investment. As you add each fund, you can then customize the percentage target fund weightings to achieve your ideal portfolio.
As Fundrise continues to grow, it will create new offerings such as the Opportunistic Credit Fund for direct investment. The Opportunistic Credit Fund was formed in 2023 to take advantage of temporary dislocations in the market after aggressive rate hikes by the Fed. The Fund looks for great properties that needs temporary credit .
Pros Of Investing In Fundrise
- Low minimum investment of only $10 versus thousands of dollars by other platforms
- Open to all investors, not only accredited investors
- Easy-to-use website and great user interface
- IRA accounts available
- 100% passive investing and income
- Great way to diversify your real estate portfolio across the country and across various real estate asset classes
- Less volatile than the S&P 500, public REITs, and public real estate funds
- Experienced real estate professional who seek to find the best deals for its investors
Cons Of Investing In Fundrise
- Illiquid investment, investors should plan to invest for at least one year and more like three years or longer
- Asset management fee of 0.85% and advisory fee of 0.15%, although this is is 50% – 80% cheaper than other private real estate funds
- Various commercial real estate deals may be more difficult to understeand
- A highly diversified portfolio may not have as high returns as compared to a highly concentrated portfolio
Because Fundrise is vertically integrated (source and manage deals), Fundrise saves investors money by creating a relatively direct link between investors and real estate. There’s no broker-dealer acting as a middleman at Fundrise, and that saves on costs.
Fundrise Overview Snapshot
| Investor requirements | None. Investments are open to nonaccredited investors. |
| Investment minimum | $10 minimum for Starter Portfolio.$1,000 minimum for Basic plan.$5,000 minimum for Core plan.$10,000 minimum for Advanced account level.$100,000 minimum for Premium account level. |
| Redemption options | Interval Fund imposes no early redemption penalty. Most other funds have a penalty. |
| Fees | Asset management fee of 0.85% and advisory fee of 0.15%, but other fees may apply. |
| Investment selection | Investors choose among four investment strategies, which hold a varying assortment of eREITs, eFunds and the Interval Fund. |
| Website transparency | This is our judgement of how easy it is to find critical information on the Fundrise website, including platform fees, account minimum and redemption options (if offered). |
| Investment transparency | This is our judgement of how easy it is to find critical information about investment offerings, including investment fees, risks, risk mitigation efforts, the process for vetting investments and how investment returns are distributed to investors. |
| Customer support options | Email and ticket-based support Monday-Friday, 9am-5pm EST. |
Fundrise Historical Returns
Fundrise was founded in 2012 and now has a strong track record for steady returns. Fundrise returns particularly tend to shine during down years in the S&P 500 stock market. Notice how well Fundrise client returns performed during the 2022 bear market and 2018 correction.
If you are looking for less volatility and more diversification in your investment portfolio, Fundrise offers a great solution.
If you do not like volatility, Fundrise investors offer much less volatility than Public REIT and Public Stocks investors. Take a look at the annual returns and comparisons below. For wealthier investors who are looking for consistent returns, Fundrise fits the bill.
Fundrise Interval Fund For More Liquidity
One of the negatives of Fundrise is the lack of liquidity. Fundrise investors should allocate long-term capital to Fundrise funds. For liquidity needs, investors should allocate such capital to publicly traded stocks, bonds, and REITs instead.
Fundrise offers a redemption program that allows investors to sell shares back to Fundrise, but investors may have to pay a one percent fee back to the fund if they have not held their shares for at least five years. Fundrise may suspend or delay redemptions during periods of extreme economic uncertainty.
As a solution to providing Fundrise investors more liquidity, Fundrise launched the Internal Fund as a more liquid option. The Internal Fund provides improved access to your invested money in the form of quarterly repurchase offers. Unlike eREITs and eFunds, there’s no penalty for liquidating Interval Fund shares quarterly.
In addition to added liquidity, the Interval Fund is larger than Fundrise’s other funds, meaning it can hold more assets and may offer higher diversification than its other funds. It also provides all of the benefits offered by eREITs and eFunds.
Please note that Fundrise's eREITs don’t trade on a public exchange. That means there's no guarantee there will be buyers for investors who want to sell shares at the time. (See this notification from the Financial Industry Regulatory Authority, or FINRA, for more info on non-traded REITs.)
Fundrise Has A Solid Long-Term Track Record
So is Fundrise right for you? If you are looking to invest in real estate, diversify your holdings, and earn more 100% passive income, then the answer is yes.
Due to Fundrise's long track record of operation and performance, I believe Fundrise is the best private real estate company that emerged from the JOBS Act of 2012. I've spoken to Ben Miller, the Co-Founder and CEO multiple times for multiple hours and believe in his leadership and meticulous views on real estate.
Conversations With Ben Miller, CEO of Fundrise
In fact, listen to my hour-long conversation with Ben Miller on the upcoming opportunities and risks in real estate. You will discover that Ben is measured, conservative, and meticulous, which is exactly the type of CEO and steward I want of my capital. You can listen to the episode on Apple or Spotify or click the play button below.
Here's another conversation I had with Ben Miller, who believes 4Q2023 was the bottom of the real estate market. Ben believes there are better days ahead as the Fed begins to cut rates in 2H 2024 with pent-up demand growing for real estate.
Invest In Real Estate More Passively
As I get older and wealthier, I've become a big fan of private real estate funds. Investing in a fund provides the diversification and lower volatility I desire. Fundrise funds enable me to invest in the Sunbelt region, where I'm a big believer due to the risk of work-from-home and technology.
Overall, I've invested $954,000 in private real estate since 2016. I plan to continue to invest in lower-cost areas of the country to take advantage of long-term demographic shifts.
I suggest starting off as a Fundrise investor with just $10 and get familiar with the platform. Once you are comfortable with Fundrise and its various funds, then you can upgrade to Fundrise Pro for more customization and flexibility.
Fundrise Disclosure Statements
See Fundrise advisors fee and account disclosures here. For details on other situational, potential fees that may be borne by the individual funds and eREITs, please see the disclosure in each offering document available at fundrise.com/oc. You can also learn more about Fundrise’s fees here.
Fundrise is a long-time sponsor of Financial Samurai and Financial Samurai is an investor in Fundrise funds. Financial Samurai only works with the best companies that can provide the most value to its readers.
