As part of our monthly passive income and portfolio updates, we’ve been highlighting key changes as well as our progress. We initially mentioned Fundrise in our August 2017 recap when our first investment occurred. We also alluded to Fundrise as part of our post on how and why we use REITs in our portfolio.
Here we’ll provide an overview of our results with Fundrise, as well as thoughts on our experience with the platform since our initial investment six months ago. This is not meant to be an exhaustive review of the Fundrise, but we will highlight aspects of the service for context. As always, do your own thorough research and consult with a professional before deciding to invest.
Fundrise is an online real estate crowd-funding service, which offers both accredited and non-accredited investors the opportunity to invest in various real estate assets. Investors access properties via the Fundrise platform. Investments are offered via two primary products:
(1) eREITs – composed of online Real Estate Investment Trusts (REITs) investments
(2) eFunds – composed of for-sale single family homes as investment properties
Visit the Fundrise website for further details.
Overall, the mix of eREITs and eFunds offered tries to provide growth and/or income, as well as risk diversification, by offering properties or related assets across locations and different investment types.
Our Investment Experience
We jumped into Fundrise via their Starter Portfolio option — a $500 minimum requirement to invest (vs. the usual $1,000). As we’re already heavily involved in traditional REITs, I wanted to gradually try it out.
I’ve been happy with the experience so far, and we’ve slowly brought our current investment up to $5,000 over the last few months:
- August 2017: $500 initial investment
- September 2017: $1,000 additional investment
- October 2017: $9.90 in dividends reinvested
- November 2017: $2,000 additional investment
- January 2018: $55.51 in dividends reinvested and ~$1,435 additional investment
We’ll evaluate further if we’re looking to add additional funds, but our attention may turn elsewhere as we continue to focus on 2018 investment goals.
Things I’ve noticed with the Fundrise so far:
Desktop / Online Only
There isn’t an app. Not a must-have, but a nice-to-have.
Each time you log in, you see your cumulative earnings and what you’ve earned since last logging in. It’s addicting (don’t log in too frequently). Also, remember: It’s your cumulative earnings.
Timing of Investments
Withdrawals from your bank account take longer than I’d expect, but not too long.
Based on the amount invested each time, the platform will automatically allocate across your various holdings.
Note: You’ll also see a separate debit in your bank account per allocation (e.g., if you invest $1,000 and gets allocated five ways, you’ll see five different withdrawals in your bank account).
Fees / Expenses
A bit higher than what I’m used to from investing in index funds and other publicly traded securities, but Fundrise still seems like a great deal based on what you get as an investor. Visit the Fundrise site for further details.
Most investors will receive 1099-DIV forms if invested in the eREITS. I’ve never dealt with the 1065 K-1 forms related to the eFunds. But guess what? I will next year for 2018 taxes. I actually waited until 2018 to invest in the eFunds for this reason.
Looking Back and — More Importantly — Ahead
I’ve enjoyed utilizing Fundrise. The user interface is terrific and the overall investment opportunities have met our personal needs and investment objectives so far.
We’re continuing to evaluate next steps and monitor our exposure to real estate. Fundrise has given us diversification away from the traditional, publicly-traded REITs that form the bulk of our real estate exposure.
Overall, we’ll try to be mindful to find a balance between our various asset classes, as well as within our alternative holdings.
Readers, do you currently utilize Fundrise or any other online real estate investment platforms? What role does real estate play in your investment portfolio? Do you have any thoughts or recommendations to share for consideration?