Real Estate Investing for the Common Man

A user’s review of Fundrise after two months

Real estate investing was not in my plan. At least not at my current age. But due to the changing landscape, I have now been invested in real estate for two months via Fundrise.

As a result of the pandemic and actions taken by the Federal Reserve and government, asset prices have skyrocketed in the past year-plus. This mainly includes stocks and real estate.

The stock market was up 15% in 2020 and 14% in the first half of 2021 alone. Housing prices are also at record highs — with prices seeing a 14% year-over-year gain in April.

But let’s not forget the 30% crash in early 2020. Watching my stock portfolio go down every day was not fun.

So when I found out about a way to invest in real estate for only $1,000, I figured why not. Diversification lowers portfolio risk, the housing market has been booming, and I sure can’t afford the prices of North Jersey houses.

Below I’ll explain how I found about Fundrise, the process for getting started, and my experience so far.

Discovering Fundrise

While I love the stock market, it’s never smart to put all your eggs in one basket. Looking to diversify between stocks and the small amount I had in crypto, I came across an article by Lauren Como showcasing several investment options for 2021.

One of which was real estate syndication through Fundrise.

A few weeks later, I stumbled across an article from Financial Samurai, an investing source I trust, advocating for Fundrise.

After some research and comparison to competitors, I decided to invest with Fundrise.

Getting Started

Unfortunately, at the time of setting up my Fundrise account I did not think I would write an article about it.

As a result, I don’t have an exact memory or record of the process — it was two months ago! But from what I can remember, most of it was simple.

There was one major inconvenience in the process. I was unable to supply funds to my Fundrise account from my savings account. Therefore, I had to move money from my savings account to my checking account and then from my checking account to Fundrise. This took a few days for the money to settle because my accounts are with different banks.

To the question of, “Why can’t I use a savings account to invest?” here is Fundrise’s response per their Help Center,

When investing through an investment plan, it is expected that you will be diversified across multiple funds. Each of our funds are separate legal entities that initiate their own transactions. Savings accounts have outbound transaction limits set by the Federal Reserve Board and some banks may charge fees if that limit is exceeded. For this reason, checking accounts are required to invest with Fundrise.

Besides that aspect, most of the setup was straightforward. There are three important aspects I need to point out about setting up an account.

First, there are different tiers on Fundrise. They are based on how much you deposit and provide different features. Obviously, the more you deposit, the more access you have.

Below are the tiers and their minimum amount. Also, the link for more details on each is here.

• Basic— $1,000
• Core — $5,000
• Advanced — $10,000
• Premium — $100,000

Second, for tiers Core and up you have the option to choose the focus of your portfolio. This means picking a portfolio that focuses on long-term growth (appreciation) or supplemental income (dividends). Or a balanced portfolio of the two. More detail of all three is here. Since I’m in it for the long run, long-term growth was the obvious choice for me.

And third, fees. Fundrise has fees, of which their pricing is below. But the important part is how they can be waived!

If you looked into the tiers, you will see each tier gets a different number of months of advisory fees waived for each friend invited. It is also worth noting, if you sign up via someone’s invite, fees will be waived as well. I believe it’s three months, but do not quote me on that.

Regardless, my friend referral link is here.

The fees, per Fundrise,

Investors pay a 0.15% annual investment advisory fee, which may be waived under certain circumstances. This means that over a 12-month period, you will pay a $1.50 advisory fee for every $1,000 you’ve invested with us. Separately, the funds in our standard portfolios pay a 0.85% annual asset management fee. That’s $8.50/year for every $1,000 invested. You can find a full description of all fees in our offering circulars.

My experience

In two months, I’m up 4%.

That’s not overwhelming. Most of the 4% is from appreciation — so not realized gains yet. Only a little of that 4% is realized gains in the form of dividends.

But the exposure to real estate has helped me in my other investments. Because I no longer have all my risk in the stock market, I’ve actually been putting more money into the market. While I wouldn’t want it to crash again, I have reassurance that if it does crash (for the short or long term) I still have investments in real estate that will treat me well.

For what it's worth, I plan to invest more in Fundrise later this week. Money talks — and I believe in Fundrise enough to invest more.

Additionally, it’s worth noting Fundrise emails me when they add new projects to my portfolio. It's nice to see a direct impact on the money I am investing.

Conclusion

The more income streams, the better.

I’m not an expert in the real estate market but the staff at Fundrise are. They can invest my money into real estate better than I could. I can now participate in the monstrous gains real estate is currently seeing.

Everything that needs to be done for creating an account or checking your growth is simple. The gains have been steady so far. All that’s left to do now is let my investment grow for years into the future.