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Fundrise is a real estate crowdfunding platform that allows people to invest smaller amounts of money (as little as $500) into eREITs. Essentially, it’s like buying into a “pool of real estate”, rather than tying up all of your investment dollars in one single property.
Back in 2017, I put $1,000 of my own money into an eREIT with Fundrise and I recorded the process to show people how the site worked.
After posting that video, I got a lot of questions from viewers on YouTube,
What have your earnings been to date?
How has your account performed?
How much money have you made since investing?
I thought these were all valid questions, so I put together a one-year follow up video in 2018 and again in 2019 to show people how the results turned out.
Of course, the performance of my investment doesn’t necessarily dictate what YOUR returns may look like (because every eREIT performs differently) – but it does offer some insights on how Fundrise performs as a company – specifically in comparison with other investment options like the stock market, mutual funds, or some of the other real estate crowdfunding websites out there.
So – for what it’s worth, I just put together ANOTHER follow-up video to show what my returns have been, now that Fundrise has been working with my money for 36 months. You can see it here…
Disclaimer: The information contained herein neither constitutes an offer for nor a solicitation of interest in any securities offering; however, if an indication of interest is provided, it may be withdrawn or revoked, without obligation or commitment of any kind prior to being accepted following the qualification or effectiveness of the applicable offering document, and any offer, solicitation or sale of any securities will be made only by means of an offering circular, private placement memorandum, or prospectus. No money or other consideration is hereby being solicited, and will not be accepted without such potential investor having been provided the applicable offering document. Joining the Fundrise Platform neither constitutes an indication of interest in any offering nor involves any obligation or commitment of any kind. The publicly filed offering circulars of the issuers sponsored by Rise Companies Corp., not all of which may be currently qualified by the Securities and Exchange Commission, may be found at www.fundrise.com/oc.
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When I first set this up 3 years ago, I told Fundrise to automatically reinvest all of my dividends (rather than sending them to my bank account), which is why the portfolio value has grown like it has (rather than just staying at $1,000).
As you can see – my original $1,000 investment (with all dividends automatically reinvested) have earned a pretty steady 12.3% over the past year, which has been the best year yet.
This screenshot above was taken on April 9, 2020 – the day my Q1 dividend for 2020 was automatically reinvested. Since April 9 isn’t even 4 months into the 12-month calendar, the 2020 year-to-date earnings look disproportionately smaller compared to the previous years.
Here’s a quick snapshot of EVERY dividend I’ve received since I got started 3 years ago:
Now, a 12.3% return is pretty good in terms of a totally passive investment that requires literally nothing from me, but it’s not a staggeringly high return as far as real estate deals go (take this deal, for example). One could certainly do better if they were willing to find a deal, crunch the numbers, buy it, improve it and sell it on their own… but on the same coin, doing everything yourself takes a lot more time, energy and effort. It’s definitely NOT passive to do it all one your own.
The returns I’ve earned with Fundrise have required virtually nothing from me, aside from the 5 minutes I spent deciding which eREIT to invest in, and the inherent risk that the returns might not pan out according to plan.
Another important point worth noting is that my $1,000 principal investment with Fundrise is basically tied up for 5 years (give or take), so the earliest I’ll be able to get my money back is about 3 years from now.
I also don’t have any control over which properties are included in the eREIT funds I’m invested in, how those properties are managed when they’re sold off, etc. I’m putting a lot of trust in the folks at Fundrise to manage my money with prudence. So far, it looks like they’re doing a good job – but only time will tell if it remains this way over the next 5+ years.
Unlike previous years, we’re right in the middle of the coronavirus crisis.
As I write this, most of the United States is on lockdown, millions of people have lost their jobs and there is no question that this will have a negative impact on the economy.
However, since we’re still in the middle of the crisis, nobody knows when this global pandemic will end and when things will get back to “normal”.
Since nobody knows how much longer this will go on and what the results will be, we aren’t sure what impact this will have on real estate values.
Whenever the real estate market takes a nosedive, it’s obviously not a good thing for those who already own properties they’ve bought at full market value and are trying to sell. However, it’s a GREAT thing for those who have liquidity and are looking to buy real estate (because they’ll be able to get some great deals).
Since Fundrise is in both positions (both selling and buying real estate), it’s difficult to say whether this crisis will have a positive or negative net effect on these dividends in the long run. The next 12 months will be very interesting to watch – not just for Fundrise, but for the real estate market as a whole.