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 4 years (this February). We cannot wait to share another episode 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 for 2022 were at approximately 0.15%, therefore – much 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 following moves:
– Monthly Investment increased to $200 per month in March of 2021
– Monthly Investment increased to $250 per month in November of 2022
The total market value of our real estate investment is $17,979.78 as of 1/4/2023. 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 our goal in 2023 of $25,000… slow and steady, but investing as many dollars that makes sense.
As stated earlier, we finally moved to $250 per month in November 2022. Therefore, we plan to do that for the entirety of 2023. In addition, we plan to invest additional side hustle savings from selling items online, such as eBay, Facebook and Mercari; as well as other apps we use to earn extra money.
The goal to $25,000 will be 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.
Example of a few stabilized apartments in Florida and North Carolina:
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 Real Estate value as of 1/4/2023:
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?!
Related: Fundrise: Internet Public Offering (iPO) Round 2 – Adding $900 to My Fundrise Investment
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, provided headwinds with rising interest rates, inflation and fears of a recession, not to mention the real estate market cooling. It’s nice knowing that the real estate investment with Fundrise trended positive in 2022, as the equity markets significantly fell. The REIT index plunged 27% 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.
The best part of the performance is that it’s primarily driven from Dividends. We have earned over $1,100+ 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 8.7% since investing with Fundrise. Due to the stock market being down 20% in 2022, this actually is similar to the returns 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). 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.
Below you’ll see the year by year performance. 2019 was partial since I did not invest on 1/1/2019.
The S&P 500 was down year-to-date by approximately 20%; therefore, Fundrise is beating the stock market for 2022 by 21.7% when you think about it. Let’s see if Fundrise continues to outperform the stock market in 2023! They also dominated the REIT index in 2022.
Fundrise: Investment Update 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 $250 month will test our capital deployment limits, but we want to hit the $25,000 mark! We are also eager for the full outcome of Fundrise from their iPO. Does an investment management company buy out Fundrise at some point?
Given I chose the “lower” risk amongst the investment class (i.e. supplemental income), my returns in economic booms could be better BUT in down years, my downside risk is limited, with 2022 as a perfect example. Given we beat the S&P 500 in 2022, primarily through dividends, I will take it.
If all looks well with our investments and net worth, we will consider additional one-time contributions with extra money my wife and I make on the side.
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. 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!
- Are Significant Advances in Technology Capable of Being Utilized to Benefit the Casino Industry? February 28, 2023
- Do You Think Tipping Auto Transport Driver is Necessary? February 10, 2023
- Enterprise-class OKR Platform Profit.co Raises $11 Mn Funding Led by Elevation Capital February 1, 2023
- Bengaluru Headquartered Mikro Grafeio Appoints U.S. Based Serial Entrepreneur Shyam Kumar as its Co-Founder February 1, 2023
- Federal Gov’t Will ‘Probably’ Force Americans To Eat Insects, Tucker Carlson Says February 1, 2023