Fundrise
by saltiel | February 17, 2020 1:52 pm
Interesting real estate[1] REIT. Slick website. Anybody know anything about this or have any experience with them?
Any thoughts given the current state of the market?
Endnotes:
- real estate: https://www.stockgumshoe.com/tag/real-estate/
Source URL: https://www.stockgumshoe.com/2020/02/microblog-fundrise/
Yea, I started investing a little with them about 6 months ago. Just small amounts every month. Returns are pretty consistent. They advertise roughly 10% returns per year, but it’s highly illiquid due to the nature of their business. The nice thing is, your account value does’t fluctuate with the regular market, it’s almost always going up, just in tiny little amounts per day or quarter depending on the distribution.
I invested $10k last year. Returns have been good (dividends & appreciation). Good way to diversify with real estate.
I have a small amount of money with Fundrise, they are not so different from lots of private (unlisted) REITs out there, except they make it easier for small investors to buy in and set up a regular investing plan with monthly purchases. Much of their portfolio is debt, primarily for apartment developers in my recollection, though they do also own buildings.
The returns are consistent with public REITs, though probably a little better recently because REIT stock prices have been driven higher, and they pay quarterly distributions. The biggest risk is the lack of daily liquidity — you can’t just sell when you feel like it and get that money in your checking account in an hour, you have to request a redemption, and if the market turns against them for whatever reason they could freeze redemptions entirely. I’m generally pleased with them but it hasn’t been very long and it’s not a big commitment.
Thanks for bringing up the lack of immediate liquidity and possibility of frozen redemptions which seem similar to investing in mutual funds in an IRA/401k account. Somehow I missed the part about automatic monthly deductions from a checking account while I was viewing their impressive website last night. Glad I didn’t complete the application. If and when the “melt-down” happens, I don’t think this is the kind of set-up I’d want to be in. Been there/done that in the last crash.
It’s much less liquid than regular mutual funds in an IRA — those you can always sell at NAV and receive the funds the next day.
Fundrise does not require regular contributions, that’s just an option.
Travis, your points about liquidity are well taken. If Fundrise were ever to get into a financial squeeze the rush to exit would make it impossible to get cash out. I like the general form of the investment however and given the overall overheated state of the market I think it would be wise to allocate a portion of one’s portfolio into these kind of well performing Real Estate assets. Which public REITs would you put on the top of your list? Clearly, I am looking for some safety in the years with a decent return.
Fundrise I wanted to but there wasn’t enough info to get out if you wanted to