Fundrise Review 2022: Get Started In Real Estate With Just $10

Starter Portfolio

With the starter portfolio, you can invest in eREITs for a starting investment of just $10. You’ll gain access to over 20 different properties in major cities throughout the country.

You’ll pay a 0.85% fund management fee to Fundrise and a 0.15% account management fee for a total of 1% in combined annual fees.

If you choose to invest, you’ll be in a 50/50 blend of the income eREIT and the growth eREIT. You should expect to hold onto both investments for five or more years, but you will have the chance to liquidate once per quarter.

Goals-Based Portfolios

If you invest at least $1,000, you can upgrade to a Goals-Based Portfolio. Fundrise’s goals based-portfolios include up to 7 eREITs, and dozens of properties. You can select between a balanced portfolio, a passive income portfolio or an aggressive growth portfolio. Your mix of eREITs will depend on your goals.

You can find more about each eREIT, the properties they own, leverage and gain perspectives on future growth and income right from the Fundrise website.

Right now, you can't customize your portfolio beyond setting your goals.

As with the starter portfolio you’ll pay a 0.85% annual management fee and a 0.15% portfolio management fee.

Other account levels include Core ($5,000 minimum investment), Advanced ($10,000 minimum investment), and Premium ($100,000 minimum investments).

Direct Investments

If you choose to invest in an eFund rather than an eReit, you’re actually investing in a real estate project. You cannot expect a liquidity event before the project completes. Right now, you can invest in a Washington DC fund or a Los Angeles Fund.

To invest in these funds, you’ll pay a .85% annual fee, and a .15% portfolio management fee (which is waived in select circumstances, but not many).

One unique feature of becoming an eFund investor is the “first look” program. If you live in the area, you can purchase a home before it goes onto the market. You can use your investment in the eFund as a part of your down payment.

I don’t want to oversell the first look program, you will have to buy your house at the market rate, but I think this is a good program to consider. Housing markets in major cities are on fire right now. If you ever want to buy, it makes sense to “peg your down payment fund” to a comparable investment in your city of choice.

Self Directed IRA

Recently, Fundrise released a Self Directed IRA program for people looking to shelter their income for the IRS. You will pay a $75 annual fee for the service, but you can invest in any of the portfolios offered by Fundrise.

See if it makes more sense to open your own self directed IRA here: Best Self-Directed IRA Providers.

Why Most People Love Fundrise

I’ve spoken to numerous people who have invested in Fundrise, and they all rave about the experience. These are the three features that most real investors love.

Transparency - Fundrise makes it easy to understand what you’re investing in. It helps that you can look at a picture of the property, find where it is on a map. You can also dig into the financials of every single property. Have a question? Customer service will respond to emails and phone calls.

Lack of liquidity - Logically, most people want money easily accessible, but having money “locked” into an investment is a great way to keep your money growing. Fundrise has seen phenomenal returns, and part of their success comes from “forcing” their investors to stay the course. However, note, that during tough times (like a pandemic), Fundrise may prevent you from withdrawing your funds.

Competitive Advantage - Fundrise is a company that prides itself on it’s competitive advantage. They invest primarily in projects that have between a $5 million and $100 million market cap. These are too large for most private investors, but they get overlooked by banks who cannot accurately rate the risk profile of the developments. In some cases, Fundrise has an advantage because banks face such high costs due to burdensome regulations.

How Does Fundrise Compare?

Fundrise is one of the most popular real estate investment platforms online, but it's certainly not the only one. In fact, over the last few years, a fierce competition has emerged in the space.

Check out these main Fundrise competitors and see how Fundrise compares:

Make Sure You Understand The Risks

I learned about Fundrise more than two years ago. At the time, they still allowed individuals to invest in particular properties. At the time, investing online in properties I’ve never seen made me nervous. The introduction of the eREIT (and the added benefit of diversification) eased my fears, but there is still a risk.

My primary concern is the level of leverage that Fundrise considers sustainable. While most would consider a 78% leverage ratio conservative (and it is), many of the properties are development projects. If demand for housing in any major city falls, the leverage could doom the profitability of the investments.

Most of the properties purchased are not done with a buy and hold forever mentality. Rather, the eREITs want regular liquidity events to enable growth.

In my personal real estate investments, I only take on debt when I can profitability hold a rental property for the long haul. I’ve been trapped underwater once, and it is not a good time. Certainly, the 100% passive nature of Fundrise should assuage my concerns, but I can’t shake them.

However, the low entry price of just $10 does limit downside risk. I would recommend Fundrise as a great starter platform for getting started in real estate. As always, before committing large amounts of capital do your own due diligence first.

You might also want to check out these Fundrise alternatives.

What do you think of Fundrise? Have you ever tried it?

Common Fundrise Questions

Here are the most common questions we get about Fundrise.

Is Fundrise a good investment?

It can be. Fundrise is a specialized real estate investment, and for some individuals, it could be the type of investment you're looking for in your portfolio. It invests in a basket of real estate, which does have higher risks than other types of investments. But the rewards can be better as well.

How does Fundrise work?

Fundrise is what's know as a REIT, a Real Estate Investment Trust. It basically owns a basket of real estate (multi-family housing, commercial buildings, etc.), and you get a small ownership slice of it. As a result, you get rewarded with your share of any rents received, appreciation on sale, etc. 

Is your money trapped at Fundrise?

No, while Fundrise is targeted at long-term investors (5+ years), its Flagship Fund offers penalty-free redemptions every quarter.

Does Fundrise pay dividends?

Historically Fundrise has paid dividends quarterly. But like all investments, dividends are subject to performance of the underlying assets.

Is Fundrise a scam?

No! Fundrise is not a scam. Fundrise is an SEC regulated investment that focuses on real estate.