FUNDRISE REVIEW 2022: My $25,000 Investment 2 Years Later!

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- So in this video today, we're going to be doing a review of the crowdfunded real estate investing platform known as Fundrise. Now I have personally been investing in Fundrise since June of 2018 and I have about $25,000 invested in this platform. And so at the end of this video, we're actually going to do to a live video inside the Fundrise platform, where I'll show you guys what it looks like, what my money is invested in and what my returns have been this far. But I just wanted to make sure you guys are aware of the fact that I actually use this platform and actively invest a sizable amount of money in this investment. Now, before I get into the video, I just wanna mention two things. Number one, if you wanna support me for putting this video together, I do have an affiliate link down below and if you use that, I will earn a commission in the process. And then number two, I also have a completely free guide on investing in crowdfunded real estate for beginners, that talks about the difference between debt and equity investments, how to get started and a lot of the ins and outs. So if you wanna check those out at the end of the video, guys, those are linked up, down in the description below. Okay, so first of all, let's talk about what exactly is Fundrise. Well, Fundrise is a crowdfunded real estate investing platform which essentially makes the way that people invest in real estate way different than it was in the past. So back in the day, if you were looking to get in on a private real state investment, you had to be in the know and you had to have a lot of money. So let's say for example, you have a 100 unit apartment building that is being offered for sale. Well, back then before crowdfunding, before you could raise money from all kinds of different people, you would have to have a small group of people getting involved in the deal. So in the past, if you were investing in a large real estate deal, you typically had to have hundreds of thousands, if not millions of dollars, oftentimes you had to be an accredited investor. And it was a very small number of people getting involved in that deal. So for those who are accredited investors with millions of dollars, that's not really a problem, but if you're like most people and you don't have those things available to you, this is where Fundrise and other crowdfunded real estate sites come in. Because rather than having just four investors on a given property, you potentially have thousands of investors. You don't have to be an accredited investor with Fundrise. And the minimum rather than being hundreds of thousands of dollars is just $500. Because rather than then raising money from just a handful of people, they're able to raise money from thousands of people through the internet. Now that being said, guys, before we go any further, there's a few things that you need to know about Fundrise that I'm going to right now. First of all Fundrise invest your money in debt investments and equity real estate investments and these are longterm investments. It's not as easy to sell a piece of real estate as it is to sell a stock. So that being said, your minimum time horizon with a Fundrise investment should be five years. And we're gonna talk about the fees in a little bit here, but understand that if you invest your money in Fundrise and pull it out before that five year window, you will end up paying fees on that. So if you're looking for a short term place to invest your money, this is not the investment for you. Another thing you have to understand here is that this is called a low liquidity investment. And what I mean by that is it's not as easy to get your money out of it, as it is less stock market or something else like that. Fundrise does offer quarterly redemption. However, they reserve the right to suspend redemptions at any point in time as they see fit. So for example, earlier this year, when that global pandemic hit, Fundrise suspended redemptions, because they didn't want a flood of people trying to cash out, which would force them to sell real estate in non-optimal conditions which would hurt the returns for other investors. So you should understand that the liquidity here is low. It's a five plus year investment and if you don't like that aspect of low liquidity where you may not be able to get your money out exactly when you want to, then again this is probably not going to be the investment for you. But that being said, these also carry benefits and because they're kind of protecting you from you, it's a much less volatile investment and because they're able to remain fully invested and not have as much cash set aside for redemptions returns overall are often better than you see with a publicly traded REIT. And the other thing is by suspending redemptions as they see fit and only offering quarterly redemptions, it takes your emotions out of this investment. So you're not gonna have a panic and try to cash out because of the market. You know, it kind of protects you from you because you can't just pull your money out. And the reason is because your money is collectively with everyone else's being put into real estate, which is a low liquidity investment. So you can't just throw your money in and take it back out. If you do, you are going to pay redemption fees. So understand that Fundrise is a five year plus low liquidity investment. All right, so moving on now let's talk about the different Fundrise plans that they offer and the corresponding minimums. Well, they did change this recently. We have new plans over here called advanced and premium, but the same plans over here are still the same. So first of all, we have the starter portfolio, which has a minimum investment of just $500, which is essentially for those who want to give it a shot, try out Fundrise without committing tons of money. Then they have the advanced plans where there are three different ones and those have a minimum investment of $1,000. Now the good news is at any time you can upgrade from the starter portfolio to the Advanced plan. So you don't have to dive in with a large amount of money. You can dip your toes in, see if you like it, and then move towards one of the advanced plans. Now, as far as those advanced plans go, they offer three different ones. They have a growth oriented portfolio, they have a blended portfolio and they have an income oriented portfolio. So depending on where you're at in your life financially, you may have more of a priority on growth or as an appreciation versus income through dividends or distributions, or you might be smacked out in the middle, which is what I decided because I use the blended approach or the blended plan. Now, like I said, there are two new plans that have been added to Fundrise recently. The advanced plan has a $10,000 minimum and the advanced account level offers the choice to opt into a plus plan and unlock a greater variety of investments, including more sophisticated and niche specific strategies. So pretty much with the advanced plans, you're picking one of them three portfolios, but once you have over $10,000 invested, you can choose a more specific strategy and kind of be more zeroed in with your investments. Even though I have over 10,000, I still just have my money in the balanced portfolio. That's what works well for me. And lastly, if you have a hundred thousand dollars or more, you're going to have premium account access. And as far as the benefits of that, this is going to give you a priority, customer service and the option to schedule a call with a Fundrise expert to basically talk about your investments and the platform overall. So for most people, they're gonna fall in into the $500 plan for the starter or one of the advanced plans, because at the end of the day, Fundrise is meant to be a platform for many smaller investors to get in on private real estate deals. But that being said, if you wanna do a more sizable investment, you can get into the advanced plan and pick a more specific strategy. All right so now what I wanna do is I wanna cover the historical returns of Fundrise. And this is net of, or after fees. We're gonna talk about the fees here in a minute, but understand that these returns are what people sow after paying fees to Fundrise. In 2014, that was a return of 12.25%. 2015 was 12.42%, 2016 8.76%, 2017 11.44%, 2018 9.11% and 2019 9.47. So we don't have a heck of a lot of data to go off of here, but it's really been solid so far as far as those returns go. And the idea with investing in real estate is to be investing in an asset that is less correlated with the overall stock market. And I will say this a lot of people looking for real estate exposure, we'll go out there and they'll purchase a publicly traded REIT, which is essentially a way to buy real estate as if it was a stock. Essentially these companies own large amounts of real estate, and then they share the income in the form of dividends. But the problem with a publicly traded REIT is that it's susceptible to panic selling because of the high liquidity. And it's also almost directly correlated with the stock market. You want your assets doing different things at different times. And if your real estate investment takes a dip at the same time as your stock market investment, that essentially defeats the purpose of diversification. And again, not to mention, as we spoke to earlier, those publicly traded REITs are often lower in returns than private real state investments. And there is a lot less transparency because you really have no idea what exactly it is that you are investing in. In a little bit here we're gonna open up my Fundrise account and you're gonna be amazed at the level of transparency Fundrise offers showing you exactly what your money is invested in. Now, lastly, before we get into that live demo here, I want to cover the Fundrise fees so you are familiar with them. First of all, they have an advisory fee and an asset management fee and combined that is 1% per year that's going to be automatically deducted from your account. So you don't have to like write them a check or have that deducted from your bank account. They're gonna pull that out of your Fundrise account. Second of all, there are loan origination fees with new projects. However, oftentimes these are paid by the borrower and not by you. But these fees are anywhere from 0% to 2%. And then lastly, there are early redemption fees. I'll put the chart up on the screen so you guys can see it. And this is why you need to commit to the five year term if you are in fact, going to invest with Fundrise, because you don't wanna be paying those early redemption fees and this early redemption fee discourages people from investing if they don't have a longterm time horizon, which overall is in the best interest of all Fundrise investors, because you don't want people doing massive swaths of redemptions that could cause Fundrise to have to sell a property at an undesirable price, and that's gonna hurt returns across the board. So that being said, guys, let's jump into the live demo now and take a look at my Fundrise portfolio. So here we are inside of my Fundrise investment portfolio. And as you can see, the current value of my portfolio is just over $25,000. So I definitely have a sizable amount of money invested with Fundrise. So, you know, I've definitely have put my money where my mouth is here and I'm just reviewing a random platform that I don't use myself. So that being said, I wanna cover a couple of quick things here before we move on to what else you have within the Fundrise dashboard. So, first of all, you can see I've been investing in Fundrise since June of 2018 so a little bit over two years. I am in the Advanced plan and I'm doing the balanced investing, which is a blend of both growth investments, as well as income investments. And the idea behind that is you get a good blend of both income from your investments through interest and rental payments, as well as asset appreciation through essentially purchasing properties, remodeling them or repositioning them and selling them for a greater price down the road. So that being said here, guys, as you can tell, I actually ramped up my investment in Fundrise quite a bit in the recent months. For the first year or so I had just about a thousand dollars invested, but you can see it did grow steadily over time. Then I bumped it up to a $5,000 investment for about another year. And then at the beginning of 2020, I had $5,000 invested and I started doing $2,000 per month for a period of time following that dollar cost averaging type strategy. And then as you can see here in May, I had some extra money and I put 10 grand into Fundrise. Now that I have $25,000 invested, I'm actually not gonna put any more money in probably for the rest of this year, just because I need to build up my emergency fund and direct some money elsewhere. But so far I've been very satisfied with Fundrise, as well as the returns. And I can basically plan on keeping this money in here and adding more down the road. So on the left here, we can see that from dividends, I've earned a basically just under $500 all time, about 236 from 2020. And you can see what I've earned from appreciation as well. And they're very transparent too, about what you're paying in advisory fees. Now, if you're wondering why these overall returns seem kind of low, well that's because I just recently ramped up my contributions here. So because I added so much money over the last couple of months, I haven't had that much time where that money's actually been invested, earning dividends and potentially earning appreciation. Now here's one of the big differences between investing in Fundrise and investing in a REIT. And that is the level of transparency available to you. Because right here, I can see exactly what my portfolio is invested in and it's across 187 different projects. Now of those projects, we can see 67% are equity and 33% are debt. And you can also see the rating of each of these properties telling you what are the more conservative investments and what are the riskier ones. So for example, let's just click on a random one here. Maybe this one right here, stabilized apartments in Washington, DC, you will literally can click on that and it shows you exactly what you're investing in. And if you want more details, you just click View More Details, and it's gonna give you basically a full overview of why they are invested in this particular property. If you try to find this level of transparency with a REIT, it is just not going to happen. You're gonna be digging through complicated financial documents and good luck trying to figure out what your money is even invested in. But with Fundrise it is so easy to go through here and navigate and see exactly what your money is invested in as far as properties go. They also tell you when things are paid back, they have progress reports depending on how actively involved you wanna be. Like for example, this project was completed successfully. So if you wanna be in here, you know, on a monthly basis, checking out properties, you're more than welcome to, or you can just set it and forget it and trust that the experts have your best interest in mind. If we click on dividends, we can see that my dividends activity has been reinvested. And again, these dividends are smaller because it's not based on that large $10,000 investment that I just put into this portfolio, but my next dividend should be substantially larger. And of course I am using that automated reinvestment. That way that money goes back into Fundrise, I'm able to earn more dividends from my dividends, essentially earning that compound interest and maximizing my returns. So now let's take a look at the performance here of my portfolio. And I like the fact that Fundrise is extremely transparent about returns, and they're not trying to hide it. They're not trying to hide their fees. They're very forthcoming about everything. Now, 2020 has been kind of a crazy year for real estate with this global pandemic. So I would actually say, I expect returns to be quite a bit lower in 2020, than they have been prior, but we already covered what those Fundrise returns have been historically. And over the long run, they have been relatively solid. But if you wanna get an idea of how you're assets are performing, everything is available to you right here. And if you want a more specific view, you can click on the dropdown and see based on these different E-reads and E-funds how each specific investment is performing. And then if you click on the portfolio tab, you can see exactly how much of your money is invested in each specific investment and how that all pans out. So I wanna be as hands off as possible guys, you can say, add it and forget it. Or if you wanna be actively involved, you can literally look into each investment and track this and see exactly what they are doing with your money. Again, this is not something you're going to experience if you simply buy into a REIT because you will not have that same level of transparency. So anyways guys, there you have it. I hope you enjoyed this video. Like I said, if you wanna support this channel for putting this video together, I do have an affiliate link for Fundrise down below. And I also have that completely free guide on crowdfunded real estate investing for beginners. Check it out if you're looking to learn more about this investment in general, it is a tremendously valuable resource. But thanks so much for watching guys. I hope you enjoyed this video and I will see you in the next one.
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Channel: Ryan Scribner
Views: 211,709
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Keywords: fundrise, fundrise review, fundrise returns, fundrise graham, fundrise graham stephan, is fundrise legit, is fundrise worth it, is fundrise a safe investment, is fundrise good, is fundrise safe, crowdfunded real estate, crowdfunded real estate investments, real estate crowdfunding, fundrise update, fundrise portfolio, my fundrise returns, my fundrise experience, passive income, real estate investing, fundrise review 2020, fundrise 2020, fundrise update 2020, 2020
Id: w-lFAKuXMfk
Channel Id: undefined
Length: 18min 17sec (1097 seconds)
Published: Thu Aug 20 2020
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