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FUNDRISE REVIEW 2022: My $25,000 Investment 2 Years Later! - YouTube
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[0]
so in this video today we're going to be
[1]
doing a review of the crowdfunded real
[4]
estate investing platform
[6]
known as fundrise now i have personally
[9]
been investing in fundrise
[11]
since june of 2018 and i have about 25
[15]
000
[16]
invested in this platform and so at the
[19]
end of this video we're actually going
[20]
to do
[21]
a live video inside the fundrise
[24]
platform
[25]
where i'll show you guys what it looks
[27]
like what my money is
[29]
invested in and what my returns have
[31]
been thus far
[32]
but i just wanted to make sure you guys
[34]
are aware of the fact that i actually
[36]
use this platform and actively invest a
[39]
sizable amount of money
[41]
in this investment now before i get into
[44]
the video i just want to mention two
[46]
things
[46]
number one if you want to support me for
[48]
putting this video together
[50]
i do have an affiliate link down below
[52]
and if you use that
[53]
i will earn a commission in the process
[56]
and then number two i also have a
[58]
completely free guide
[60]
on investing in crowdfunded real estate
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for beginners
[64]
that talks about the difference between
[66]
debt and equity investments
[68]
how to get started and a lot of the ins
[70]
and outs
[71]
so if you want to check those out at the
[72]
end of the video guys those are linked
[74]
up
[75]
down in the description below okay so
[77]
first of all let's talk about what
[79]
exactly is
[80]
fundrise well fundrise is a crowdfunded
[84]
real estate investing platform which
[86]
essentially makes the way that people
[88]
invest in real estate way different than
[90]
it was in the past
[92]
so back in the day if you were looking
[94]
to get in on a private real estate
[96]
investment
[97]
you had to be in the know and you had to
[100]
have a lot of money
[101]
so let's say for example you have a 100
[104]
unit
[104]
apartment building that is being offered
[106]
for sale
[107]
well back then before crowdfunding
[110]
before you could
[111]
raise money from all kinds of different
[113]
people you would have to have
[114]
a small group of people getting involved
[117]
in the deal
[118]
so in the past if you were investing in
[120]
a large real estate deal
[122]
you typically had to have hundreds of
[124]
thousands if not millions of dollars
[126]
oftentimes you had to be an accredited
[129]
investor
[130]
and it was a very small number of people
[132]
getting involved in that deal
[134]
so for those who are accredited
[136]
investors with millions of dollars
[138]
that's not really a problem but if
[140]
you're like most people and you don't
[141]
have those
[142]
uh things available to you this is where
[145]
fundrise and other crowdfunded real
[147]
estate sites come in
[148]
because rather than having just you know
[150]
four investors on a given property
[152]
you potentially have thousands of
[154]
investors you don't have to be an
[156]
accredited investor with fundrise
[159]
and the minimum rather than being
[161]
hundreds of thousands of dollars
[163]
is just five hundred dollars because
[165]
rather than raising money from just a
[167]
handful of people
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they're able to raise money from
[170]
thousands of people
[171]
through the internet now that being said
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guys before we go any further there's a
[175]
few things that you need to know about
[177]
fundrise that i'm going to cover
[179]
right now first of all fundrise invests
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your money in debt investments and
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equity real estate investments
[186]
and these are long-term investments it's
[189]
not as easy to sell a piece of real
[191]
estate
[192]
as it is to sell a stock so that being
[195]
said
[195]
your minimum time horizon with a
[197]
fundrise investment
[199]
should be five years and we're going to
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talk about the fees in a little bit here
[203]
but understand that if you invest your
[205]
money in fundrise
[206]
and pull it out before that five year
[208]
window you will
[209]
end up paying fees on that so if you're
[211]
looking for a short-term place to invest
[213]
your money
[214]
this is not the investment for you
[216]
another thing you have to understand
[218]
here is that this is called a low
[220]
liquidity investment and what i mean by
[223]
that
[223]
is it's not as easy to get your money
[225]
out of it as it is
[227]
the stock market or something else like
[228]
that fundrise does
[230]
offer quarterly redemption however they
[233]
reserve the right to suspend redemptions
[235]
at any point in time as they see fit
[238]
so for example earlier this year when
[240]
that global pandemic hit
[242]
fundraised suspended redemptions because
[244]
they didn't want a flood of people
[246]
trying to cash out which would force
[248]
them to sell real estate
[250]
in non-optimal conditions which would
[253]
hurt the returns for
[254]
other investors so you should understand
[256]
that the liquidity here
[258]
is low it's a five plus year investment
[261]
and if you don't like that aspect of low
[263]
liquidity
[264]
where you may not be able to get your
[265]
money out exactly when you want to
[268]
then again this is probably not going to
[270]
be the investment for you
[271]
but that being said these also carry
[274]
benefits
[275]
and because they're kind of protecting
[277]
you from you it's a much less volatile
[279]
investment
[280]
and because they're able to remain fully
[282]
invested
[283]
and not have as much cash set aside for
[286]
redemptions
[287]
returns overall are often better than
[289]
you see with a publicly traded
[291]
reit and the other thing is by
[293]
suspending redemptions
[295]
as they see fit and only offering
[297]
quarterly redemptions
[299]
it takes your emotions out of this
[301]
investment so you're not going to have
[303]
a panic and try to cash out you know
[305]
because of the market
[307]
you know it kind of protects you from
[308]
you because you can't just pull your
[310]
money out
[311]
and the reason is because your money is
[314]
collectively with everyone else's
[316]
being put into real estate which is a
[318]
low liquidity
[319]
investment so you can't just throw your
[321]
money in and take it back out if you do
[324]
you are going to pay redemption fees so
[327]
understand that
[328]
fundrise is a five year plus low
[330]
liquidity
[331]
investment all right so moving on now
[333]
let's talk about the different fundrise
[335]
plans that they offer and the
[337]
corresponding minimums
[339]
well they did change this recently we
[341]
have new plans over here called advanced
[343]
and premium
[344]
but the same plans over here are still
[347]
the same
[348]
so first of all we have the starter
[349]
portfolio which has a minimum
[352]
investment of just five hundred dollars
[354]
which is essentially for those who want
[356]
to give it a shot
[357]
try out fundrise without committing tons
[360]
of money
[361]
then they have the advanced plans where
[363]
there are three different ones
[364]
and those have a minimum investment of
[366]
one thousand dollars
[368]
now the good news is at any time you can
[371]
upgrade from the starter portfolio to
[373]
the advanced plan
[374]
so you don't have to you know dive in
[376]
with a large amount of money
[377]
you can dip your toes in see if you like
[380]
it and then move towards one of the
[381]
advanced plans
[382]
now as far as those advanced plans go
[385]
they offer three different ones they
[386]
have a growth
[387]
oriented portfolio they have a blended
[390]
portfolio and they have an income
[392]
oriented portfolio so depending on where
[395]
you're at
[395]
in your life financially you may have
[397]
more of a priority on
[398]
growth or asset appreciation versus
[401]
income
[402]
through dividends or distributions or
[405]
you might be smack dab in the middle
[407]
which is what i decided because i used
[409]
the blended approach
[410]
or the blended plan now like i said
[412]
there are two new plans that have been
[414]
added to fundrise recently
[416]
the advanced plan has a ten thousand
[418]
dollar
[419]
minimum and the advanced account level
[421]
offers the choice to opt into
[423]
a plus plan and unlock a greater variety
[426]
of
[426]
investments including more sophisticated
[429]
and niche specific
[430]
strategies so pretty much with the
[432]
advanced plans
[434]
you're picking one of three portfolios
[436]
but once you have over ten thousand
[438]
dollars
[438]
invested you can choose a more specific
[441]
strategy
[442]
and kind of be more uh zeroed in with
[444]
your investments
[446]
even though i have over ten thousand i
[447]
still just have my money in the balance
[449]
portfolio
[450]
that's what works well for me and lastly
[452]
if you have a hundred thousand dollars
[454]
or more you're going to have premium
[455]
account
[456]
access and as far as the benefits of
[458]
that this is going to give you priority
[460]
customer service and the option to
[462]
schedule a call
[464]
with a fundrise expert to basically talk
[467]
about your investments
[468]
uh and the platform overall so for most
[471]
people
[471]
they're gonna fall into the 500 plan for
[474]
the starter
[474]
or one of the advanced plans because at
[477]
the end of the day fundrise is meant to
[479]
be
[479]
a platform for many smaller investors to
[482]
get in on
[483]
private real estate deals but that being
[485]
said if you want to do a more sizable
[487]
investment you can get into the advanced
[489]
plan and pick
[490]
a more specific strategy all right so
[493]
now what i want to do is i want to cover
[495]
the historical returns
[496]
of fundrise and this is net of or
[499]
after fees we're going to talk about the
[502]
fees here in a minute
[503]
but understand that these returns are
[505]
what people saw
[506]
after paying fees to fundrise in 2014
[510]
that was a return of 12.25 percent
[513]
2015 was 12.42 percent 2016
[517]
8.76 percent 2017 11.4
[520]
four percent 2018 9.11
[525]
and 2019 9.47
[528]
so we don't have a heck of a lot of data
[529]
to go off up here
[531]
but it's really been solid so far as far
[533]
as those returns go
[535]
and the idea with investing in real
[537]
estate
[538]
is to be investing in an asset that is
[540]
less correlated
[541]
with the overall stock market and i will
[544]
say this
[545]
a lot of people looking for real estate
[547]
exposure will go out there and they'll
[549]
purchase a publicly traded reit
[551]
which is essentially a way to buy real
[553]
estate as if it was a stock
[555]
essentially these companies own large
[558]
amounts of real estate and then they
[559]
share the income in the form of
[561]
dividends but the problem with a
[563]
publicly traded reit
[564]
is that it's susceptible to panic
[567]
selling because of the high liquidity
[569]
and it's also almost directly correlated
[572]
with the stock market
[573]
you want your assets doing different
[575]
things at different times
[577]
and if your real estate investment takes
[579]
a dip at the same time as your stock
[581]
market investment
[582]
that essentially defeats the purpose of
[584]
diversification
[585]
and again not to mention as we spoke to
[588]
earlier those publicly traded reits are
[590]
often
[591]
lower in returns than private real
[593]
estate investments
[594]
and there is a lot less transparency
[597]
because you really have no idea what
[598]
exactly it is
[600]
that you are investing in in a little
[602]
bit here we're going to open up my
[603]
fundrise account
[604]
and you're going to be amazed at the
[606]
level of transparency fundrise
[608]
offers showing you exactly what your
[610]
money is invested in
[612]
now lastly before we get into that live
[614]
demo here i want to cover the fundrise
[617]
fees so you are familiar with them
[619]
first of all they have an advisory fee
[622]
and an
[622]
asset management fee and combined that
[625]
is one percent per year
[627]
that's going to be automatically
[628]
deducted from your account
[630]
so you don't have to like write them a
[631]
check or have that deducted from your
[633]
bank account
[634]
they're gonna pull that out of your
[636]
fundrise account
[637]
second of all there are loan origination
[640]
fees with new projects
[641]
however oftentimes these are paid by the
[644]
borrower and not by
[646]
you but these fees are anywhere from
[648]
zero percent
[649]
to two percent and then lastly there are
[652]
early redemption fees
[653]
i'll put the chart up on the screen so
[655]
you guys can see it
[656]
and this is why you need to commit to
[658]
the five-year term if you are in fact
[661]
going to invest with fundrise because
[663]
you don't want to be paying those early
[664]
redemption
[665]
fees and this early redemption fee
[667]
discourages people from
[669]
investing if they don't have a long-term
[671]
time horizon
[672]
which overall is in the best interest of
[675]
all fundrise
[676]
investors because you don't want people
[678]
doing massive
[680]
swaths of redemptions that could cause
[682]
fundrise to have to sell a property
[684]
at an undesirable price and that's going
[686]
to hurt returns across the board so that
[688]
being said guys
[689]
let's jump into the live demo now and
[691]
take a look at my fundrise portfolio
[694]
so here we are inside of my fundrise
[696]
investment portfolio
[697]
and as you can see the current value of
[699]
my portfolio
[701]
is just over 25 000
[704]
so i definitely have a sizable amount of
[707]
money
[708]
invested with fundrise so you know i
[710]
definitely have put my money where my
[711]
mouth is here and i'm not just reviewing
[714]
a random platform
[715]
that i don't use myself so that being
[718]
said i want to cover a couple of quick
[720]
things here
[721]
uh before we move on to what else you
[723]
have within the fundrise
[725]
dashboard so first of all you can see
[727]
i've been investing in fundrise since
[729]
june of 2018
[731]
so a little bit over two years i am
[734]
in the advanced plan and i'm doing the
[736]
balanced investing
[737]
which is a blend of both growth
[739]
investments as well as
[741]
income investments and the idea behind
[744]
that is you get a good blend of both
[746]
income from your investments through
[748]
interest
[749]
and rental payments as well as asset
[752]
appreciation
[753]
through essentially purchasing
[754]
properties remodeling them or
[756]
repositioning them
[758]
and selling them for a greater price
[760]
down the road
[761]
so that being said here guys as you can
[763]
tell i actually ramped up
[765]
my investment in fundrise quite a bit in
[768]
the recent
[768]
months uh for the first year or so i had
[771]
just about a thousand dollars invested
[773]
but you can see it did grow steadily
[775]
over time
[776]
then i bumped it up to a five thousand
[778]
dollar investment
[780]
for about another year and then at the
[782]
beginning of 2020
[784]
i had five thousand dollars invested and
[787]
i started doing
[788]
two thousand dollars per month for a
[790]
period of time
[791]
following that dollar cost averaging
[793]
type strategy
[794]
and then as you can see here in may i
[797]
had some extra money
[798]
and i put 10 grand into fundrise now
[801]
that i have 25
[802]
000 invested i'm actually not going to
[804]
put any more money in probably for the
[806]
rest of this year
[808]
just because i need to build up my
[810]
emergency fund and direct some money
[812]
elsewhere
[813]
but so far i've been very satisfied with
[815]
fundrise
[816]
as well as the returns and i can
[818]
basically plan on keeping this money in
[820]
here
[820]
and adding more down the road so on the
[823]
left here we can see that
[824]
from dividends i've earned basically
[826]
just under five hundred dollars all time
[829]
about 236 from 2020
[832]
and you can see what i've earned from
[834]
appreciation as well and they're very
[836]
transparent too about what you're paying
[837]
in advisory fees now if you're wondering
[840]
why these overall returns
[842]
seem kind of low well that's because i
[844]
just recently ramped up my contributions
[847]
here
[847]
so because i added so much money over
[850]
the last couple of months
[851]
i haven't had that much time where that
[853]
money's actually been invested
[855]
earning dividends and potentially
[857]
earning appreciation
[859]
now here's one of the big differences
[860]
between investing in fundrise
[862]
and investing in a reit and that is the
[865]
level of transparency available to you
[868]
because right here i can see exactly
[870]
what my portfolio is
[871]
invested in and it's across 187
[875]
different projects now of those projects
[878]
we can see 67
[879]
our equity and 33 are debt and you can
[883]
also see the rating of each of these
[885]
properties telling you
[886]
what are the more conservative
[888]
investments and what are the riskier
[890]
ones
[890]
so for example let's just click on a
[892]
random one here
[894]
uh maybe this one right here stabilized
[896]
apartments in washington dc
[898]
you literally can click on that and it
[900]
shows you
[901]
exactly what you're investing in and if
[904]
you want more details you just click
[905]
view more details
[907]
and it's going to give you basically a
[909]
full overview
[910]
of why they are invested in this
[912]
particular uh
[913]
property if you try to find this level
[916]
of transparency with a reit
[917]
it is just not going to happen you're
[919]
going to be digging through complicated
[920]
financial documents
[922]
and good luck trying to figure out what
[924]
your money is even
[925]
invested in but with fundrise it is so
[928]
easy to go through here and navigate
[930]
and see exactly what your money is
[932]
invested in as far as properties go
[935]
they also tell you when things are paid
[938]
back
[939]
they have progress reports depending on
[940]
how actively involved you want to be
[942]
like for example this project was
[944]
completed successfully
[946]
so if you want to be in here you know on
[948]
a monthly basis checking out properties
[950]
you're more than welcome to
[951]
or you can just set it and forget it and
[954]
trust that the experts you know
[955]
have your best interests in mind if we
[958]
click on dividends we can see that my
[960]
dividend activity has been
[962]
reinvested and again these dividends are
[964]
smaller because it's not based on
[966]
that large ten thousand dollar
[968]
investment that i just put into this
[970]
portfolio
[971]
but my next dividend should be
[973]
substantially larger
[975]
and of course i am using that automated
[977]
reinvestment
[978]
that way that money goes back into
[980]
fundrise i'm able to earn more dividends
[983]
from my dividends
[984]
essentially earning that compound
[986]
interest and maximizing my returns
[989]
so now let's take a look at the
[990]
performance here of my portfolio
[993]
and i like the fact that fundrise is
[995]
extremely transparent about
[997]
returns and they're not trying to hide
[999]
it they're not trying to hide their fees
[1001]
they're very
[1002]
forthcoming about everything now 2020
[1005]
has been kind of a crazy year for real
[1007]
estate with this global pandemic
[1009]
so i would actually say i expect returns
[1011]
to be quite a bit lower in 2020
[1013]
than they have been prior but we already
[1016]
covered what those fundraise returns
[1017]
have been historically
[1019]
and over the long run they have been
[1021]
relatively solid
[1022]
but if you want to get an idea of how
[1024]
your assets are performing
[1025]
everything is available to you right
[1027]
here and if you want a more specific
[1029]
view
[1030]
you can click on the drop down and see
[1032]
based on these different e-reits
[1034]
and e-funds how each specific investment
[1037]
is performing
[1038]
and then if you click on the portfolio
[1040]
tab you can see exactly how much of your
[1043]
money
[1043]
is invested in each specific investment
[1046]
and how that all pans out
[1048]
so if you want to be as hands-off as
[1050]
possible guys you can set it and forget
[1052]
it
[1052]
or if you want to be actively involved
[1055]
you can literally look into each
[1056]
investment
[1057]
and track this and see exactly what they
[1059]
are doing with your money
[1061]
again this is not something you're going
[1063]
to experience if you simply buy into a
[1065]
reit
[1066]
because you will not have that same
[1067]
level of transparency
[1069]
so anyways guys there you have it i hope
[1071]
you enjoyed this video
[1073]
like i said if you want to support this
[1074]
channel for putting this video together
[1076]
i do have an affiliate link
[1078]
for fundrise down below and i also have
[1081]
that completely free guide
[1082]
on crowdfunded real estate investing for
[1085]
beginners
[1086]
check it out if you're looking to learn
[1087]
more about this investment in general
[1089]
it is a tremendously valuable resource
[1092]
but thanks so much for watching guys i
[1094]
hope you enjoyed this video
[1095]
and i will see you in the next one
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