Online Crowdfunding Real Estate Investment Platforms

6 Replies

I'm considering working for and also possible investing with Fundrise, or similar real estate investing platforms. Does anyone have any personal experience working for and/or investing with Fundrise or similar companies. I know there are several different ones available. Any recommendations/feedback?

I can't comment about how it is to work at Fundrise. I can say from the point of view of a conservative investor, I personally find the offerings un-competitive (very low skin in the game, comparatively very little sponsor experience, higher leverage, much higher fees etc.) compared with accredited offerings. On the other hand: an aggressive, nonaccredited investor (who doesn't have access to as many alternatives) might be very happy with the offerings at Fundrise.

Just an FYI that more than a few of these companies suffered mass layoffs a couple of years ago when the VC community generally stopped making investments in this area. Since then one or two companies have managed to get additional VC funding to keep the lights on but most haven't. Many of them like FundRise have moved to crowdfunding the money needed to keep going from their own investors instead. Most of these firms are startups, meaning that they are not profitable and have a higher than normal chance of flaming out.

One strategy might be to target working at the firms that have been around the longest and are having the most success raising the most investor money (with the idea that these would be more financially secure, and also have the most opportunities for advancement). If you're thinking of that, the 200 pound gorilla that makes everyone else in the industry look small (and green) is BlackRock (Blackrock Real Estate Investment Trust).

@Ian Ippolito thank you, that’s good to know. Much appreciated! Unless their website is just totally misleading, it seems that Fundrise has done a pretty good job of maintaining and growing investor capital, but it’s always good to get neutral opinions from outside parties

I would not recommend relying on the marketing on any company website to do any real due diligence.

As an example: I am sure there will be no mention on the current website of how the former Fundrise CIO was accused by the company of extortion, the former CEO was ousted or resigned etc. 

Fundrise, like a few other platforms had formerly raised a lot of money through venture-capital firms. But they  have not received Vc follow-up rounds of investment. This is generally a vote of no confidence in the former “high growth” story by the VC’s.

Fundrise (like some others) is now raising money to fund operations by hitting up their own investors via Crowdfunding.

They will tell you it is by choice and to allow more moderate growth. Maybe they’re 100% right. Or maybe they’re a little bit like the guys in the 7 eleven scene in “Say Anything”.

In that movie, John Cusak is depressed because he got dumped and asks a bunch of know-it-all guys sitting outside of a 7-Eleven for advice. Everything they recommend is really bad. Finally he asks, “if you guys know so much about women, why are you all here on a Friday night without a woman in sight?” They are silent and look at each other. Finally one says, “*By choice* man!”. Then all the others loudly agree.

Time will tell what the situation is. My advice would be in the meantime to think critically and don’t necessarily accept all marketing at face value. Good luck.

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