Fundrise Honest Review 2020: Scam or Legit Real Estate Investment Company

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Fundrise review

If you are keen on Real Estate Investing then you might have stumbled upon Fundrise Real estate investing.

Fundrise claims to have

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  • $60 million aggregate funds raised
  • $450 million of property
  • 43 individual real estate investments
  • 30 investments fully paid back
  • 12.5% realized annual net returns
  • 13.7% unrealized annual net returns
  • 12-person team
  • 2,000 investors

But then, if you have not heard about Fundrise that’s not an issue, you just did on my Fundrise Review.

You surely know how profitable investing in real estate is, and the chances at which it can transform and 10x your financial status.

Fundrise is a real estate Crowdfunding company that has created an avenue for you to invest in real estate irrespective of your capital.

But then, you are not going to jump into a business you know not, and that’s why I have presented this Fundrise Review to put a check, if it’s a scam or legit company.

What is Fundrise

Fundrise provides direct real estate investment through eight non-listed public real estate investment vehicles. Founded in 2012.

The Fundrise real estate team draws on institutional backgrounds, and partners with industry-leading sponsors and lenders.

Fundrise combines institutional practices with tech-enabled efficiency and flexibility to invest in small, under-the-radar assets not bid up by competing institutions.

What Fundrise Features For Real Estate Investors

Smarter diversification

Now you can diversify outside of the public markets with private real estate, allowing you to reduce risk and improve stability.

Institutional quality without the high fees

The fees you pay affect your bottom line. Fundrise proprietary software helps you reduce costs, which means they can charge lower fees, so you can maximize your returns.

Flexible investment minimums

Unlike most private real estate investments, Fundrise low minimums give you the flexibility to invest the right amount, at the right time, to meet your goals.

The convenience you’d expect from a modern investment platform

Invest and manage your portfolio through Fundrise easy-to-use website and mobile app.

Track your performance and watch as properties across the country are acquired, improved, and operated via real-time asset updates.

Is Fundrise Scam or Good Investment

A question every aspiring investor would love to ask, keep reading on the History of Fundrise.

And then you can conclude if Fundrise is a scam or legit.

Keyfacts that shows Fundrise is not a scam

Company

  • Founded in 2012, Fundrise provides direct real estate investment through eight non-listed public real estate investment vehicles.
  • Board members and key institutional backers include Silverstein Properties (World Trade Center owner-developer), Renren (NYSE: RENN), and Guggenheim Partners.

Business Model

  • Cutting-edge business model leverages technology to lower real estate origination and operating costs, enabling an ultra-low fee model.
  • An experienced team of 64 professionals, including an internal private equity fund team dedicated to real estate acquisition, lending, operations, and asset management.

Performance

  • Fundrise invested in, manages, or owns over $2.3 billion in real estate nationwide with $426 million of funds raised to date.
  • Fundrise has sold 56 of its 181 real estate assets originated since inception. Average historical net returns of 10% – 14% per annum and current dividend yield of 8% – 10.5%.

Fundrise Company History

  • The Fundrise real estate team draws on institutional backgrounds, and partners with industry-leading sponsors and lenders.
  • Lower costs on back end operations allows team to execute on smaller deals than traditional managers.
  • Fundrise combines institutional practices with tech-enabled efficiency and flexibility to invest in small, under-the-radar assets not bid up by competing institutions.
  • Track Record of SEC Public Reporting
  • Fundrise and its family of funds have reporting standards similar to those of publicly traded companies.

Active Publicly Reporting Offerings

  • Rise Companies Corp. Offering Circular and Supplements (The Fundrise iPO)
  • Fundrise East Coast Opportunistic REIT Offering Circular (East Coast eREIT™)
  • Fundrise Midland Opportunistic REIT Offering Circular (Heartland eREIT™)
  • Fundrise West Coast Opportunistic REIT Offering Circular (West Coast eREIT™)
  • Fundrise Real Estate Investment Trust Offering Circular (Income eREIT™)
  • Fundrise Equity REIT Offering Circular and Supplements (Growth eREIT™)
  • Fundrise For-Sale Housing eFUND – Washington DC, LLC (Washington DC eFund™)
  • Fundrise For-Sale Housing eFUND – Los Angeles CA, LLC (Los Angeles eFund™)

Fundrise Advisors Disclosure Documents

  • Fundrise Advisors – Client Agreement
  • Fundrise Advisors – Form ADV Part 1
  • Fundrise Advisors – Form ADV Part 2

Registration with the SEC does not imply a certain level of skill or training.

Fundrise Management

Fundrise Companies Governance

Ben Miller – CEO and Director
  • Ben Miller – CEO and Director – With 19 years of experience, Ben has a broad background in real estate. Prior to Fundrise, Ben worked as President of Western Development Corporation and WestMill Capital, having acquired, developed, and financed more than $500 million of property in the Washington, DC area. Ben is a graduate of the University of Pennsylvania.
  • Brandon Jenkins – COO and Director – 10 years of experience in real estate development, leasing, and investment advisory at Fundrise and prior firms WestMill Capital, Marcus & Millichap, and Westfield Shopping Centers. Brandon is a graduate of Duke University.
  • Tal Kerret – Director – President and Chief Investment Officer of Silverstein Properties, the owner-developer of the World Trade Center development in New York, with over 40 million square feet of assets under management.
  • Joe Chen – Director — CEO and founder of Renren (NYSE: RENN), a social networking service and internet finance business in China with approximately 242 million activated.
  • Haniel Lynn – Director – Former Group President of CEB (NYSE: CEB). Helped build CEB to a $2 billion company over 15 years, managing 2,000 team members.

Real Estate Management

  • King Davidson – SVP Real Estate -15 years experience in real estate investment, acquisitions, and development with Clark Enterprises, Opus Corporation, and Bank of America Merrill Lynch. King has a bachelor’s degree from Washington and Lee University and Master of Real Estate from Johns Hopkins.
  • Amy Phillips – SVP Real Estate – Amy has developed more than 2 million square feet of multifamily and office over the course of her 20+ year career. She began her career in commercial real estate with the Washington, DC-based Donohoe Companies in 1999, and later moved to Monument Realty in 2004.
  • Latasha Edwards – SVP Real Estate – 15 years experience working in acquisitions, asset management, and portfolio management for investment firms such as MacFarlane Partners, Hudson Realty Capital, and McKinsey. Harvard graduate and MBA recipient from The Wharton School of the University of Pennsylvania.
  • Gaurav Agrawal – SVP Controller – Over 20 years of finance and accounting experience, specializing in the software & SaaS, hospitality, and real estate industries, for firms such as PWC, Marriott, and NAREIT. Previously at MicroStrategy (MSTR) heading up their SEC reporting, SOX and technical ac- counting group.

Full Service Team

Fundrise is a 64-person team with an in-house private equity practice that draws on institutional backgrounds and partners with industry leading sponsors, lenders, and law firms.

Fundrise real estate team draws on experience from an array of institutional investment managers, developers, and lenders.

  • American Capital (Investment Manager)
  • ASB Capital Management (Investment Manager)
  • B2R Finance (Blackstone – Residential Lender)
  • Bank of America Merrill Lynch (Investment Bank)
  • Bolour Associates (Developer)
  • Clark Enterprise (Investment Manager)
  • Foulger-Pratt Development (Developer)
  • Hudson Realty Capital (Developer)
  • Lennar (Developer)
  • MacFarlane Partners (Investment Manager)
  • Monument Realty
  • OppenheimerFunds (Investment Manager)
  • Opus Corporation (Developer)
  • Prudential Mortgage Capital (CRE Lender)
  • Spear Street Capital (Investment Manager)
  • Washington REI

How to get started on Fundrise

It’s easy to get started.

Signing up with Fundrise is simple and only takes a few minutes.

You can automatically connect with more than 3,500 banks, so no complicated paperwork is required to fund your account.

Step 1. Select the account level and strategy that are right for you.

Whether you’re a first time investor or you’ve been investing in real estate for years, Fundrise have an account level that’s right for you.

Start with one of their most popular initial account levels like Core or Advanced and then choose the investment strategy — income, balanced, or growth — that fits your personal goals.

Setting up your account takes less than five minutes and the entire investment process is completed through their website or mobile app.

Step 2. Select a strategy that fits your goal.

Choose between a focus on income, growth, or a balance of both.

After placing your initial investment, you’ll immediately be diversified across a series of investment funds that are suited to your selected strategy.

Each fund may already own several assets or will seek to acquire additional assets over time.

As an investor, you earn returns based upon the performance of the underlying real estate assets in your portfolio.

Step 3. Grow your portfolio over time.

Continue to invest over time either manually or automatically.

Like all real estate investing, Fundrise is meant to be a long-term investment.

Over time, as you continue to invest, you can use tools like auto-invest or investment goals to grow your portfolio and increase your diversification.

Any returns can be reinvested into new funds or automatically deposited back into your bank account.

Step 4. Track your performance and see updates in real time.

Every investor can track the performance of their portfolio and see real-time updates via the web dashboard or mobile app.

Fundrise will keep you up to date on changes such as new asset acquisitions, progress or sales of existing projects, dividend payments, and other market commentary.

Who can Invest with Fundrise?

Featured Fundrise Investor

Any U.S. citizen (or permanent resident) currently residing in the U.S. who is over the age of 18. No accreditation required.

Is Fundrise a Long-term Investment

Absolutely. Like all private real estate investments, investments in Fundrise should be viewed as long-term (5+ years).

This is because nearly all of the most effective real estate investing strategies require a combination of both expertise and time to pay off.

Fundrise select strategies based on their long-term return potential for their investors, not short-term optics.

If you anticipate needing your investment back in the near-term, I don’t recommend investing with Fundrise.

How does Liquidity work at Fundrise?

While Fundrise should be viewed as a long-term investment, I understand that investors may want or need to prematurely liquidate (or “redeem”) their shares.

Accordingly, Fundrise investors may request to redeem shares at any time, although such redemption cannot be guaranteed and there may be costs associated with premature redemption.

How do returns work at Fundrise?

Real estate famously offers investors a unique mix of long-term appreciation and cash flow potential.

Investing with Fundrise is no different. Fundrise investor portfolios have the potential to generate dividends on a quarterly basis while their shares also grow in value over time.

These returns ultimately come from the individual real estate assets in your portfolio – interest or rental income collected, as well as potential appreciation in the property’s value.

How does Fundrise select its Assets?

Carefully, to put it mildly. They make use of their extensive network, combined 100+ years of experience, rich data, and intense underwriting process.

Fundrise end up reviewing thousands of opportunities each year and select only the few gems that will power your portfolio.

Conclusion

Fundrise has acquired a preferred equity investment in the Elysium Fourteen, a 56-unit luxury apartment building in Washington, in DC’s coveted U Street Corridor.

The total preferred equity commitment from the Income eREIT™ is $4,475,000, which when combined with the senior debt totaling $24,400,000, features an aggregate loan-to-cost (LTC) of approximately 89% based on the estimated $32,421,507 construction budget.

There is approximately $3,546,507 of equity junior to Fundrise in the investment.

The U Street Corridor is Washington, DC’s storied, artistic center.

In addition to numerous upscale restaurants, bars, and boutiques, U Street is home to DC’s most iconic performance venues including The Lincoln Theater, The Howard Theater, 9:30 Club, and U Street Music
Hall.

This area has become one of the most sought-after residential areas in the District as a result of the resurgence brought about from recent redevelopment.

The project is planned to include 12,712 square feet of retail space in addition to the apartments.

The building will include studio, one bedroom, and two bedroom units with several penthouse units with private rooftop terrace

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