Fundrise - Successfull Investments ?

Question

Hello All

I am wondering if anyone has used this crowdfunding platform and was able to get their principal back along with the returns they advertise? Also, long term holding is ok with me but what is the minimum duration before you can pull your principal and earnings out?

Thanks

Ian Ippolito · Answer

@Hitanshu Shah, in my opinion, it really depends on your personal situation (your personal risk tolerance, and how much money you have available). First, you should be diversifying across multiple asset classes of which real estate is only one. If you've already done that, then the next step is to figure out how much money you are going to put into real estate. If it's not very much, you may have only enough to invest in a single fund. If you have more, you can get more diversification by investing in multiple funds.

If I were a nonaccredited investor just starting out and only enough for one fund, I would put it in Blackstone Real Estate Income Trust (BREIT). It's the biggest and most diversified commercial real estate fund out there (by commercial real estate asset class, geography, and position in the capital stack), invests in core plus which has historically outperformed value-added (which is the typical strategy of most nonaccredited funds) and has the best withdrawal terms in the industry. The sponsor has experience over multiple real estate cycles as well.

If I had more money, I would diversify into debt, which tends to be more stable when properly underwritten when things go wrong. Fundrise Income eREIT, or the realtymogul mobile REIT 1.

If I had more money, I would diversify into riskier strategies, keeping in mind my own risk tolerance. For a conservative investor, these would be more like "side dishes" than the "main meal", but for an aggressive investor, it would be okay to take bigger helpings. I would look at Impact housing REIT II, MOgul REIT II, Medalist diversified REIT and Fundrise eFunds (West Coast, heartland, East Coast). Finally, for "dessert": these are very aggressive and probably too risky for most conservative investors. But for an aggressive investor, the Fundrise Growth eREIT and Fundrise eFunds (Los Angeles, Washington DC).

Hitanshu Shah · Answer

@Ian Ippolito and @Alina T.

Thanks Ian and Alina for the comments. Yes, I already have some diversification in various asset classes and am now looking into Real Estate.

Alina Trigub · Answer

@Hitanshu Shah I would agree with @Ian Ippolito on going with the most conservative fund first. I would then try to diversify and not necessarily stick to funds only. Maybe invest in stocks, mutual funds, some real estate (to take the tax advantages). Bottom line: don't keep all eggs in one basket.

Good luck!

Ian Ippolito · Answer

@Hitanshu Shah , I'm assuming you're talking about the Fundrise nonaccredited investor eREITs?

If so, Fundrise, like all of the nonaccredited investor offerings are very new (only legal per Regulation A for a handful of years) and have penalties for early withdrawal. So no investor has been with them long enough to get back their full principal plus the returns.

This is the penalty fee scheme with Fundrise for withdrawals: Withdraw in 0-90 days: 0% penalty. 3% from 90 days until 3 years. 2% from 3 years to 4 years. 1% from 4 years to 5 years. 0% at 5 years onwards. This is about average and there are other funds that are more lenient and one that is less so.

Hitanshu Shah · Answer

@Ian Ippolito - Thanks Ian! Yes that is what I was referring to.

I am on your website now and also researching other crowdfunding offerings for nonaccredited investors. Which is the best in your opinion for someone who is starting out?

Fundrise - Successfull Investments ?

Fundrise - Successfull Investments ?

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