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Abstract

up from analyst to managing partner before founding Fundrise.<h2 id="1e5a">What I like about Fundrise:</h2><ol><li>You do not have to be an accredited investor. <a href="https://www.nerdwallet.com/blog/investing/what-is-an-accredited-investor/">Accredited investors</a> are high net worth individuals that either earned an income of $200,000 or more in the last year or have a net worth of over$ 1 million. They get their pick of the best investments because banks see them as capable of taking on increased risks. With Fundrise, you don’t have to worry about this. You still have a chance of investing in real estate, even if you make minimum wage as I do.</li></ol>2. You can invest <a href="https://fundrise.com/investments/starter-plan">as little as $500</a>. As a sophomore in college, I wanted to dip my toes into investing, but I didn’t feel comfortable locking thousands of dollars up in a mutual fund or a Roth IRA. Transferring$ 500 out of my savings account seemed reasonable — I didn’t feel that having low liquidity on that amount would make or break my financial situation.3. There’s a 90-day trial period. Fundrise has what they call a<a href="https://fundrise.com/help/articles/360047125052-What-is-the-90day-introductory-period-"> 90-day introductory period</a>. Basically, if you choose to withdraw your money within the first three months, you do not have to worry about advisory fees or redemption penalties.4. Transparency. This is a major reason I love Fundrise, and why I kept my money in the account after the introductory period. Less than a month after I made my initial deposit, the world started realizing the seriousness of COVID-19. Even before most states in the US mandated a lockdown, Fundrise<a href="https://fundrise.com/investor-update/399/view?utm_medium=email&utm_source=fundrise&utm_campaign=investor-update-399&utm_content=button"> released a letter</a> detailing what to expect from the company and how they were shifting their strategies in response to the pandemic. In short, I trust the company and how they’re handling my money.5. Usability. I’m a beginner investor, but Fundrise organizes its site in a way that makes it easy to understand all the financial jargon.When projects fin

Options

ish, Fundrise shows me my realized return and gives me an explanation for what the successful completion of a particular project means for my portfolio. See below:<figure id="f391"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*LNvfS0hc8O3S1nX0MGwgHg.png"><figcaption>Screenshot by author</figcaption></figure>Fundrise also breaks up every property in your portfolio by real estate strategy. Their explanations help me understand the risks and benefits of each property in my portfolio.<figure id="4bc7"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*dAfH_PQkYCWjWl3mqmvjnA.png"><figcaption>Screenshot by author</figcaption></figure>6. I can say I own real estate across the country! Sometimes on my way to class, I’ll check my email and see I have an update from Fundrise: the horizontal multi-family development in Phoenix, AZ just completed successfully! That’s a pretty cool feeling.<figure id="ba61"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*OXFwISxQNNZgn_eu8-eSNw.png"><figcaption>Map of locations of all the projects in my portfolio. Screenshot by author.</figcaption></figure><h1 id="4cf0">One-year update</h1>So what does my account look like a year later?<ul><li>Initial investment: $500</li><li>Current portfolio: 54 properties across 14 states</li><li>Net returns to date\dots drum roll please\dots$ 25.88.</li></ul><figure id="da98"><img src="https://cdn-images-1.readmedium.com/v2/resize:fit:800/1*YN93dVWzft8GOAWxDyAwLg.png"><figcaption>Screenshot by author</figcaption></figure>So, I’m not making bank yet. But I’m okay with that. Keep in mind that I started my account basically at the start of the pandemic. And I have added no funds since my initial deposit. Plus, I earned a lot more on $500 in Fundrise than I would have made had it just sat in a regular savings account.This was just a brief experiment. I wanted to diversify where my money goes, and I wanted to test out Fundrise as a platform.So what’s next? I plan on depositing another$ 500 into my Fundrise account within the next month and then make auto deposits of $100 each month into my account after that.Then onto my next goal: start a Roth IRA before I graduate from college.</article></body>

How I Started Investing in Real Estate at 20

My experience as a first-time investor.

I’ve always been a great saver and as a teenager, put almost everything I earned from my minimum wage jobs into my bank account. So, by the time I was in college, I had a pretty healthy savings account.

But I was tired of earning 0.15% on my money. I wanted my money to work for me, and so I started looking into investing.

I wasn’t new to the concept, and I knew the basics, but it all seemed intimidating. I had so many questions. How much should I invest? Where should I invest? I kept finding excuses for why I hadn’t transferred at least some of my money, currently earning a measly interest rate, into another account.

When I asked my parents for advice, they said I shouldn’t be worried about that kind of stuff at my age. I should focus on graduating college, find a well-paying job, and then worry about investing.

Well, at 20, I didn’t have a boatload of money or knowledge, but I had one thing on my side: time.

So I ignored what everyone said, got down to business, and googled. And that’s when I came across Fundrise.

What is Fundrise?

Fundrise is an online crowdfunding real estate platform that launched in 2012. According to their website, they’ve invested more than $4 billion in real estate and have over 130,000 investors. Co-founder Ben Miller holds an economics degree from The University of Pennsylvania and worked his way up from analyst to managing partner before founding Fundrise.

What I like about Fundrise:

You do not have to be an accredited investor. Accredited investors are high net worth individuals that either earned an income of $200,000 or more in the last year or have a net worth of over $1 million. They get their pick of the best investments because banks see them as capable of taking on increased risks. With Fundrise, you don’t have to worry about this. You still have a chance of investing in real estate, even if you make minimum wage as I do.

2. You can invest as little as $500. As a sophomore in college, I wanted to dip my toes into investing, but I didn’t feel comfortable locking thousands of dollars up in a mutual fund or a Roth IRA. Transferring $500 out of my savings account seemed reasonable — I didn’t feel that having low liquidity on that amount would make or break my financial situation.

3. There’s a 90-day trial period. Fundrise has what they call a 90-day introductory period. Basically, if you choose to withdraw your money within the first three months, you do not have to worry about advisory fees or redemption penalties.

4. Transparency. This is a major reason I love Fundrise, and why I kept my money in the account after the introductory period. Less than a month after I made my initial deposit, the world started realizing the seriousness of COVID-19. Even before most states in the US mandated a lockdown, Fundrise released a letter detailing what to expect from the company and how they were shifting their strategies in response to the pandemic. In short, I trust the company and how they’re handling my money.

5. Usability. I’m a beginner investor, but Fundrise organizes its site in a way that makes it easy to understand all the financial jargon.

When projects finish, Fundrise shows me my realized return and gives me an explanation for what the successful completion of a particular project means for my portfolio. See below:

Fundrise also breaks up every property in your portfolio by real estate strategy. Their explanations help me understand the risks and benefits of each property in my portfolio.

6. I can say I own real estate across the country! Sometimes on my way to class, I’ll check my email and see I have an update from Fundrise: the horizontal multi-family development in Phoenix, AZ just completed successfully! That’s a pretty cool feeling.

Map of locations of all the projects in my portfolio. Screenshot by author.

One-year update

So what does my account look like a year later?

Initial investment: $500
Current portfolio: 54 properties across 14 states
Net returns to date… drum roll please… $25.88.

So, I’m not making bank yet. But I’m okay with that. Keep in mind that I started my account basically at the start of the pandemic. And I have added no funds since my initial deposit. Plus, I earned a lot more on $500 in Fundrise than I would have made had it just sat in a regular savings account.

This was just a brief experiment. I wanted to diversify where my money goes, and I wanted to test out Fundrise as a platform.

So what’s next? I plan on depositing another $500 into my Fundrise account within the next month and then make auto deposits of $100 each month into my account after that.

Then onto my next goal: start a Roth IRA before I graduate from college.