Fundrise Review

Donny Gamble
April 4, 2022
5.0
Personalincome rating

Real estate crowdfunding isn’t a new concept, but the way that Fundrise incorporates it is. Investing in real estate is simple with a low account minimum, but the smaller your initial account contribution, the less control you have over your investments.

Fundrise logo
on Fundrise's website
Fundrise
FEES
.15%
annual advisory fee
Investment Minimum
$1,000
PROMOTION

Invest and get $10 in shares

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Key Takeaways

  • Investment Choices: Choose between eREITs, eFunds, and Interval Funds to invest your money into.
  • Asset Management: Total of 0.85% asset management fees and 0.15% for advisory fees, but advisory fees are waived for the first 12 months.
  • Designed for Longevity: This isn’t a pump-and-dump kind of investment strategy. If you can’t invest long-term, Fundrise might not be for you.
  • Account Levels: Different account levels from $10 investments (Starter) up to $100,000 investment minimums (Premium). These will dictate fees and redemption options.

Pros & Cons

Pros
  • Open to every investor type
  • Institutional quality without the high fees
  • Flexible investment minimums
  • Easy to use platform
Cons
  • Illiquidity
  • Fee structure is complicated

Fundrise is an online real estate company, in a nutshell. Their entire point is to let simple, average investors begin investing in REITs and other real estate holdings, such as eFunds or Interval Funds, and begin seeing a return on your investment.

However, the portfolios are very divisive. It depends on which plan (so the minimum contribution) you use, because Fundrise controls how many eREITs and eFunds are in each portfolio.

Fundrise is designed to let anyone invest in real estate and see a return, but there are hoops to jump through if you want to do it properly.

About Fundrise

Fundrise is a 120+ employee strong, Washington D.C.-based startup that launched in 2010 by Ben Miller, Dan Miller, Kenneth Shin, and Brandon Jenkins

Hosted by parent organization Rise Companies Corp., Fundrise holds over $5.1B in assets, and is labeled as the company that successfully incorporates crowdfunding into the real estate world (beyond your typical REIT for heavy investor types, anyway).

Pricing & Fees

You can expect annual service fees, which is where we should start. Fundrise beats the competition by only requiring 0.85% of the portfolio as an annual management fee, when the typical range for other similar companies is at or around 1.25% at the time of writing.

Additionally, the annual service fee is only 0.15%, but that’s completely waived for the first 12 months of investing with Fundrise, which is an excellent introductory offer.

Even then, it beats the industry standard of 0.85%.There are no carried interest fees and no sales commissions. Typically, these fees can equal 15% or higher of your portfolio, so Fundrise costs a total of 1% of your portfolio compared to a combined 17%+ that other companies charge.

But we’re not out of the woods yet. There is an origination fee, which can range from 0% up to 2% for new investments. The percentage depends on which account plan you have with them.

You can also run into early redemption fees of 1% to 3%, but this doesn’t count for the first 90 days of an investment, or after 5 years of the investment.

Basically, you can opt-out of an investment and liquidate in the first 3 months, otherwise you’re holding onto it for the long haul (unless a 3% early redemption fee isn’t a big deal to you).

Who is Fundrise Best for?

Fundrise is intended for investors who want to begin with small amounts of money and compound what they can to invest. These will be real estate-centric individuals who most likely do not have a lot of money to get started.

Fundrise is absolutely intended to be a long-term solution, so anyone with great interests in day trading or quick returns should not use Fundrise (or invest in real estate in general, if we’re being completely frank here).

Compare to Other Platforms

Realty Mogul Logo
MANAGEMENT FEES
1% to 1.25%
INVESTMENT MINIMUM
$5,000
PROMOTION
No current promotions
CrowdStreet logo
PROJECT FEES
0.50% to 2.5%
INVESTMENT MINIMUM
$25,000
PROMOTION
No current promotions
PeerStreet logo
ACCOUNT FEES
0.25% - 1.0%
INVESTMENT MINIMUM
$1,000
PROMOTION
No current promotions

Fundrise FAQ's

Is Fundrise legit and safe?

Yes, Fundrise has been around since 2010 with few to no problems, and those problems have been anecdotal. Fundrise is a legitimate and safe company that pays you when you’re due, and doesn’t dawdle on payment windows.

Is Fundrise good for beginners?

While apps like Fundrise have made it easier to access investment opportunities for those on the ground floor, Fundrise still needs to simplify a few steps in order to make it more beginner-friendly.

Still, it’s one of the best beginner’s apps for investing out there, but it doesn’t mean that you can just stroll in without understanding the basics of real estate investing.

Most “negative experiences” with Fundrise appear to come from this with no knowledge of long-term investing when they get started, so as long as you know what you’re doing, it’s a great platform.

How does Fundrise make money?

Fundrise is a for-profit company that makes money off of management fees, advisory fees, origination fees, and early redemption fees.

Additionally, if your property appreciates in value, those fees technically make them more money, so as you make money Fundrise also makes money.

Can you lose money on Fundrise?

Absolutely. You can lose money with any investment platform or medium. Fundrise users possess little to no experience when they get started, and may misinterpret the intention of long-term real estate investing in the first place.

It’s this demographic that is most likely to fall victim to early redemption fees or losing money through illiquidity sales.

Fundrise

Fundrise is the first investment platform to create a simple, low-cost way for anyone to access real estate's historically consistent, exceptional returns.

  • Fundrise
  • Rating: 5
  • Reviewed by:
  • On April 4, 2022
  • Last modified:May 13, 2022

Review Summary:

Fundrise is the first investment platform to create a simple, low-cost way for anyone to access real estate's historically consistent, exceptional returns.

Review of: Fundrise

Reviewed by:
Rating:
5
On April 4, 2022
Last modified:May 13, 2022

Summary:

Fundrise is the first investment platform to create a simple, low-cost way for anyone to access real estate's historically consistent, exceptional returns.

About the author 

Donny Gamble

I’m Donny. I’m a world traveler, investor, entrepreneur, and online marketing aficionado who has a big appetite to compete and disrupt big markets. I thrive on being able to create things that impact change, difficult challenges, and being able to add value in negative situations.

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