Once strictly a main stay for magnates and billionaires, investing in real estate has become incredibly accessible for retail investors in the last few years. Beyond investing in publicly traded REITs (Real Estate Investment Trusts) new platforms and apps have given non-accredited investors the ability to invest directly in developing projects, purchase non-traded REITs, and even purchase rental homes. Today, we take a look at one of the most popular real estate investing apps on the market with our Fundrise review.
Before we get into our Fundrise review, let’s take a look at the state of real estate investing as we enter 2021.
Real estate investing in 2020 was a mixed bag. Rock bottom mortgage rates and a pandemic gave way to a meteoric demand in single-family homes that had room to roam, primarily in the suburbs. So, for those active income investors who were able to purchase a fixer-upper in the suburbs or buy a great potential rental property, 2020 was most likely a fruitful year.
Conversely, the commercial real estate investing saw a pretty dramatic downturn. However, not all areas of the CRE sectors realized negative performance. Commercial real estate such as distribution warehouses and cellphone towers saw a positive performance. However, it was the hospitality and lodging sector of commercial real estate that really took a hit due to the pandemic.
But we find ourselves on the precipice of a new horizon when it comes to real estate investing. The combination of a vaccine roll-out and pent up travel demand from almost everyone could lead to a major boom for the real estate sector. Rates will remain low to ensure economic recovery and with people finally going on vacation, commercial real estate should see a resurgence.
So, commercial real estate could be a great value play in 2021. And while the industry will remain volatile with a lot of unknowns and lack of clarity, leveraging a crowdfunding real estate app could provide you the security you need to make a solid profit while investing in real estate.
A great app at a moment like this is Fundrise.
Fundrise is one of the original real estate crowdfunding apps on the market. That may sound like it’s been around forever but crowdfunding real estate isn’t even a decade old. New real estate crowdfunding apps aren’t quite mainstream yet, but their popularity is growing everyday.
Fundrise is unique because it lets both accredited and non-accredited investors the opportunity to invest in real estate through debt and equity.
What makes Fundrise attractive is their value investing approach. Their network of real estate experts finds assets for a cost lower than their intrinsic value and work directly with contractors and property managers to increase the value over time.
It is this approach that makes Fundrise an attractive real estate crowdfunding app. As I mentioned, CRE can be an excellent value investment play in 2021. And if commercial real estate realizes a resurgence over the next 3-5 years, getting into a REIT right now could be an excellent buying opportunity.
So, lets’ see what makes Fundrise so special with our Fundrise Investment Review
At Wealthplicity, we have rated and ranked some of the top investment apps on the market. For our full list of reviews, please visit our “Best of Investing Resources Page“
For any review, we take a take a look at the most important criteria for the customer:
Fundrise is a great platform for equity investors seeking to diversify their portfolio through real estate income. Fundrise has a variety of deals and is also great for beginners who just started investing in real estate. They have seamless usability and transparency when it comes to their portfolio so it makes due diligence a snap for those who are seeking to get a better understanding on real estate assets.
Fundrise would not be great for day traders or those seeking immediate returns. They recommend a hold of 3-5 years which would be a typical hold period while the real estate asset appreciates.
Fundrise is also a great for investors seeking to diversify their portfolio. Real Estate investing brings an added stability to an investor’s portfolio outside of stocks and bonds.
Investors pay a .15% annual investment advisory fee. This means that over a 12-month period you will pay $1.50 for every $1,000 invested. In addition, there is a .85% annual asset management fee. This means that you pay $8.50 for every $1,000 invested over a 12-month period.
One of the best features of Fundrise is that you do not have to be an accredited investor. To be an accredited investor, you must have an annual income of $200,000 for the last two years. Or you have must have a net worth of at least $1 million.
With Fundrise, any U.S. citizen or permanent resident residing in the U.S. over the age of 18 can use the platform.
There is a $500 minimum for a Starter Portfolio, $1,000 for Core plans (Supplemental Income, Balanced Investing, Long-term growth). $10,000 min for Advanced Account level, $100,000 for Premium level)
Fundrise has three levels of investments which allows investors from beginner to advanced to partake in the platform.
The first level is the Core Plan. This plan has an investing minimum of $1,000 and serves as the foundation of Fundrise’s investing experience. This plan is great for diversification and allows the investor to focus on generating consistent income, maximizing long-term growth, or achieving a balance of both.
The second level is the Advanced Plan. This plan has an investment minimum of $10,000 and provides access to more advanced strategies. The plan typically allocates a portion of your portfolio to a more sophisticated real estate assets that evolve over time based on new market opportunities. It also gives you the ability to allocate directly to most of their funds.
The third level is the Premium Plan. This plan requires a $100,000 minimum investment and allows investors to access private funds that are usually specialized, truly illiquid with longer time horizons. These funds have the potential for outsized performance.
The mobile app is a seamless, “one-question-at-a-time” set up. Depositing funds is a simple verification process. Fundrise also provides a great understanding on how your portfolio is built. You can see in-dept details of each of your holdings (or projects). Clean and easy use of the app.
Finding critical information on the website was quite easy. Nothing was hidden or made difficult to find. I also love seeing transparency around results which show to be very promising over the last five years.
Fundrise returns have been impressive over the past 5 years and have consistently realized returns between 8.5% and 12.5%.