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 approximately 3.75 years. 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 $7 billion of real estate holdings and transactions with over 330,000 investors. They are a premier, real estate crowdfunding investment platform.
Fundrise has 5 different categories or what they call, “Plans”, of Investors for you to choose from:
- Starter Plan: Start with ONLY $10 and you become a Real Estate investor! The limitations to this plan would be the inability to invest in an IRA with $10 nor the ability to join in on their iPO or internet public offering.
- Basic Plan: Start with $1,000 and gain immediate exposure to real estate investments, with the ability to earn and reinvest dividends! However, plans get much more expansive, once you reach the next tier, as you’ll see below for Fundrise. I started with the Basic plan in early 2019 and have since moved up!
- Core Plan: Level up at a $5,000 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.
- Advanced Plan: Available to investors with $10,000+ invested. This plan has a more variety, as well as sophisticated and specific investment strategies. My wife & I have invested over $10,000 into real estate with Fundrise and we now are Advanced plan members! Onward to the next class, which is…
- 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%, 0.85% for asset management and 0.15% for for advisory. My fees YTD for 2022 are at 0.15-0.25%, therefore – lower than anticipated.
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! We are also at the Advanced Plan Tier, only $80,000+ to go until Premium…!
For further details on my investment and background, see – Fundrise Review – A New Investment, Pros & Cons
For 2020 Update – Fundrise: Real Estate Investment Lanny’s 2020 Year-End Review
For 2021 Update – Fundrise: Real Estate Investment Lanny’s 2021 Year-End Review
Our Current investment
Advance Plan: Supplemental Income
As stated above, we started our Fundrise real estate investment journey with their Core Plan –> Supplemental Income type. We initially started with a $1,000 investment back in February/March of 2019 and we invested $100 monthly through February 2021. If you re-call, we made the move to $200 per month in March of 2021! Therefore, you can see those results of investing under “Real Estate” in the screen shot below.
The total market value of our real estate investment is $15,879.25 as of 10/1/2022. 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. Looking forward to $25,000… over halfway there.
As of October 2022, we did not move to investing to $250 per month and maintained our $200 per month investment. We do plan on moving to $250 per month possibly in 2023. We have kicked the can on that a few times this year. It’s been hard, as we want to deploy our capital into dividend stocks while the stock market is down! We will update you if plans change on our real estate investment here. We would love to continue to add to this alternative investment, that doesn’t track the equity market but can still provide a passive income stream.
Performance and consistency is why we love and continue our investment with Fundrise. Our investment in Fundrise performed well during the pandemic – returning 7.4% in 2020, outpacing the REIT index (which was negative). Then, in 2021, my performance or return on investment stood strong at 22.2%. Q1-2022 performance hit +3.2% in Q1-2022 and is up 1.4% from Q2-2022. Q3 didn’t finish as strong, with a small 0.3% gain. I am loving it! Annualized, we are anticipating returns in the 6-8% range 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, stabilized positions and fully operating real estate properties. Due to being on the income side, it’s no surprise my real estate investments are primarily fixed income strategy.
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 October 1, 2022:
What you’ll also notice is the $5,533.25 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 $5,533.25 so far over the last 3 years. The valuation is currently at $7,514.40 (same from last quarter, typically price will change in Q1 to Q2). Extremely curious as to what may occur at the end with the iPO! I assume they’ll either go public or will be acquired.
Related: Fundrise iPO, Say What?!
Fundrise: Q3-2022 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 (especially during 2020, as noted above). 2021 was a strong year. 2022, however, could provide headwinds with rising interest rates, inflation and aid items ending (think – additional tax credit, student loan interest freeze, student loan forgiveness, recession etc.). It’s nice knowing that the real estate investment with Fundrise has trended positive in 2022, as the equity markets are falling. The REIT index is down almost 30% in 2022.
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 $200 per month, hence the slow/small step-ups each month in the first image. We also do plenty of one time, non-recurring investments. One-time/non-recurring investments include a $2,500 additional contribution in early June 2021, as well as 3 other one-time contributions of $500 (x2) and $655 during 2021. We have invested $1,525 in additional one-time investments in total this year, on top of the $200 per month.
The best part of the performance is that it’s primarily driven from Dividends. We have earned over $925+ in dividends (see left side of image) since inception. What happens with the dividends earned?
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 after the quarter ends.
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 12.50% since investing with Fundrise. Due to the stock market being down 25% in 2022, this actually is now ahead of the S&P 500 over the same time period. Since I started in February/March of 2019, the S&P 500 has returned approximately 9% since then, through the time of this writing (annual return that is). Therefore, if I am averaging 12.50% returns, that definitely beats the S&P 500 for now. This could change, as you have seen in previous articles.
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 passive income. I would say, Fundrise has fit the bill perfectly, thus far.
The S&P 500 is down year-to-date by approximately 25%; therefore, Fundrise is beating the stock market for 2022. Let’s see if Fundrise continues to outperform the stock market.
Fundrise: Investment Update Q3-2022 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. The $200 month has worked perfectly and am eager for the full outcome of Fundrise from their iPO. Do we go up to $250 per month soon?
Given I chose the “lower” risk amongst the investment class (i.e. supplemental income), my return could have been better. Given I am on track to beat the S&P 500 in 2022, primarily through dividends and slight appreciation, I will take it.
If all looks well with our investments and net worth, we will consider $250 per month after December 2022.
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:
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 $200 per month investments and will re-visit at the end of September 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!
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