Fundrise, Real Estate Investing, Crowdfunding

Fundrise is an online crowd funding platform that allows investors to invest into real estate.  The platform provides another avenue for passive income that can be helpful on the journey to financial freedom!  That is the exact reason we have been investing with Fundrise.

My wife and I have now been investing with Fundrise for over 22+ months.  We cannot wait to share with you the performance and the additional income that the investment can provide!

Fundrise: brief background

Fundrise has been around since 2012, investing over $4.9 billion of real estate holdings and transactions.  They are a premier, real estate crowdfunding investment platform.

Fundrise has 3 (Starter Plan no longer!) different categories of Investors for you to choose from:

  1. Core Plan: Start with a $1,000 initial Investment. Choose between a Supplemental Income, Balanced Investing and a Long-Term Growth plan. You can see the breakdown of each below, as I talk about how we selected the Supplemental Income plan.
  2. Advanced Plan: Available to investors with $10,000+ invested. This plan has a more variety, as well as sophisticated and specific investment strategies.
  3. Premium: Available to those investors with $100,000+ invested.  Even longer-holding periods, with greater potential for returns.  For some reason, I just can’t find the $100,000 underneath that couch cushion I thought I had…  Details on the Premium investment class is below.

Their fees are approximately 1.00% but can be waived through generation of referrals.

You can review Fundrise service and approach to investing here.

The three plans within the Core Investment Category are listed below and you know we chose the Supplemental Income plan!

Fundrise, real estate investing, REIT

For further details on my investment and background, see – Fundrise Review – A New Investment, Pros & Cons

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Core Plan: Supplemental Income

As stated above, we invested into the Core Plan –> Supplemental Income type.  I have taken a screen directly from the Fundrise platform, to show you what my real estate investment looks like.  My attempt is to make this as transparent as possible.  We initially started with a $1,000 investment back in February/March of 2019 and we have invested $100 monthly for the past 22 months.  Therefore, you can see those results under “Real Estate” in the screen shot below and the total is $2,690.34 as of 6/30/2020.

My wife and I will look at our networth and portfolio at the end of the year to decide if we want to increase our contribution.  Since we have enjoyed Fundrise, we would like to increase our investment.  The investment in Fundrise has performed better than the stock market this year and that is saying a lot, given the global pandemic.  There aren’t many investments that have performed positively this year.

Active Projects within Core Plan

What’s great is that the investments are spread throughout the country.  In addition, the Fundrise investments are on different timelines from an investment standpoint.  Timelines such as – new investments, stablized positions and fully operating real estate properties.

Fundrise, real estate investing, REIT

Example of one of the Real Estate Investment Projects from Los Angeles, California:

Fundrise, real estate investing, REIT

They received a A3 Rating, set-up with Equity and Fundrise anticipates a projected return of 8.2-14.3%.  Hear are further facts and details on the total investment:

Fundrise, real estate investing, REIT

The transparency to each investment is fully appreciated and pleasant to see.  Talk about helping you sleep at night!

Here is a re-cap that I was able to take to summarize the positions as of December 31, 2020 (or January 2021 – the timing of this article):

Fundrise, real estate investing, REIT

What you’ll also notice is the $1,006.25 from the Fundrise Investment Internet Public Offering (iPO).  As an investor on the platform, you receive an opportunity to own shares in Fundrise, the company.  I took the opportunity and based on my holdings, was able to invest $1,006.25.  No real change has occurred to the investment value, yet.  Extremely curious as to what may occur at the end with the iPO!

Related: Fundrise iPO, Say What?!

Fundrise: Year-to-Date Performance

My friends, including Bert, and I have a very good joke.  We send a message out about how our Fundrise investments are doing and each response always follows the lines of, “Steady Eddy”.  This has been the case, even during the global pandemic of COVID-19.  In fact, the weathered the pandemic very well.  I wonder how much this had to do with the CARES Act and the forbearances and the forgiveness on rent.

As you can see in the first image, there has not been a single dip in performance.  Performance continues to be steady with each additional investment. My selection of Supplemental Income did estimate my return wouldn’t be the overall best, but that usually means the investment does not fall as hard.  Therefore, the downside risk to my investment was lower than the other investment options on the platform.

As stated earlier, we add $100 per month, hence the slow/small step-ups each month in the first image.  The best part of the performance is that it’s primarily driven from Dividends, as we’ve earned over $180+ in dividends (see left side of image) since inception.  What happens with the dividends earned?

Fundrise, real estate investing, REIT

The dividends are reinvested, of course!  Fundrise gives you the option to either receive dividends as cash or reinvest back into the real estate investment.  You better believe, sticking to my dividend investing roots, I am reinvesting dividends earned.

Related: The Power of Dividend Reinvesting

Each quarter end – dividends are reinvested in that subsequent month.  The reinvestment occurs automatically, which is very nice.  This takes part of the emotion out of investing, as well.  Below you can see that this typically occurs between the first two weeks.

Fundrise, real estate investing, REIT

The question you may have is – what is your actual return %?  What have we returned since owning this investment?  Well – the screen shot below does a fairly decent job at depicting that, again – straight from the Fundrise dashboard.

The investments, on a weighted average basis, have returned 7.7% since investing with Fundrise.  Obviously this lags the S&P 500 by a great deal, as the market has returned over 16% YTD in 2020 and Fundrise only did 7.4%.  To note, the returns below primarily are from the income being generated.

My goal wasn’t to beat any index or market, but to differentiate my investment portfolio.  To have a differentiator that also produces a steady stream of income.  I would say, Fundrise has fit the bill perfectly, thus far.

(adsbygoogle = window.adsbygoogle || []).push({}); Fundrise: Investment Update Year-End 2020 Conclusion

Fundrise, overall, has been a sound and steady investment.  The investment definitely hasn’t tracked the S&P 500, which was the goal and provides a steady stream of income.  As we’re on the journey to financial freedom, this adds more to the passive income stream that we have built.

Given I chose the “lower” risk amongst the Core investment class, my decline in return hasn’t been significant.  Given I am on track to return over 7% on 2020, primarily through dividends, I will take it.  Given the state of the world due to COVID-19 / Global Pandemic, that is a WIN in my book. When a few of my dividend holdings have been cutting their payment, Fundrise has brought consistency to the portfolio, surprisingly.  This has been a true sign of diversification, during this uncertain time.

See –Dividend Cuts: Pandemic Impact on Lanny’s Portfolio

We are going to continue to invest $100 per month to start 2021 with Fundrise, given COVID-19 is still widespread.  Given the uncertainty in the market, we held off from increasing this in 2020 and at least Q1 2021.  If the pandemic did not occur or came later, we may have been at $200 per month.  Therefore, we will re-evaluate our automatic investment amount in April of 2021.  There will not be a reduction and this would be to decide only to increase it, at this time.

In summary, our investment in Fundrise has provided a very transparent, consistent income stream that has differentiated our portfolio.  The platform is tremendously easy to use and understand.  The time input after the initial investment is minimum.  I tend to read new investments that are added and update performance on my spreadsheet.  Here is an example of an investment update:

real estate investment

We plan to continue to invest in Fundrise as an alternative to our investment portfolio.  Fundrise has provided us an exposure to actual real estate and to do this in a low-cost/low-barrier to entry, as well as a less-time consuming aspect to real estate.  Again, we plan to continue our $100 per month investments and will re-visit at the end of the year to increase the investment per month or not.  We love the portfolio income / cash flow stream that Fundrise provides, no doubt!

Is there something more you’d like to see during my next update?  Something you are not sure of that I can go into detail on?  Please let me know, as I’d love to help out as much as possible.  Thank you again for reading, good luck and happy investing!

-Lanny

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