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– In this video here, we’re
going to be doing an update on my very small Fundrise
investment back in July of 2018. I learned about this real
estate investing platform. I was a little bit skeptical at first. There are some reasons that
investors are a bit cautious with these crowdfunded real
estate investing platforms. Just to see what would happen,
I decided to put $1,000 into this account. I have now had this account open here for about eight months. I wanted to share with you
guys a progress update, what has happened with this account. I do plan on adding some
more money to this account now that I have seen a lot
about half a year of progress with this account and I
have a better understanding of these crowdfunded real
estate investing platforms. Now I’ve done a lot of
research on Fundrise. I have a very in-depth
review I will link up down on the description below that talks a lot about Fundrise and what you need to
understand as an investor. But the main two points that
I think you need to know as a Fundrise investor is number one, it is a long-term investment. Real estate is inherently a long-term and a liquid investment, that’s
gonna be point number two, and so, you don’t put money in Fundrise if you’re going to want
to take it out in a week or a month or a year. Fundrise is meant for people with a five-plus-year time
horizon in my opinion. If you’re looking to
be a long-term investor and you’re looking to diversify assets away from the stock market and you don’t necessarily
want to go out there and be a physical real estate
investor, that is the niche that these crowdfunded real
estate investing platforms fall into and the need that
they are capturing there. The second point I want to make here that you need to understand as an investor is that liquidity is not guaranteed. Your money is being invested
in real estate projects. If all of a sudden, you had a
large investment in Fundrise and you said okay, I want
to cash out tomorrow, they cannot guarantee the fact that they can have liquidity
and the ability to do that because your money is going into actual real estate projects. Now a lot of people might be
scared by that and saying, “Okay, if my money is tied up “and I can’t get immediate access to it, “I don’t want to be any part of that.” That is totally fine. It’s certainly not the investment for you. But if you understand
the fact that your money is being invested in real estate projects and it would take time to liquidate, a lot of people are understanding of that and that may not be something
that is a con for you when it comes to investing in Fundrise. That being said, it is an interesting way to get exposure to an asset class that was traditionally reserved
to high-net-worth investors and that is these private
real estate investments. Looking at the returns over
the past couple of years, they’ve had very promising returns. It’s important to remember that past results do not
guarantee a similar outcome. Even the returns that I’ve seen
with my Fundrise investment or that they’re showing on their website, they are not guaranteed in the future. We are looking at returns here in a very hot real estate market. So, the real test will
be when we see a downturn with the real estate market and seeing what kind of returns Fundrise investors are seeing. That being said, let’s
jump into my computer here and take a look at my Fundrise investment. If you guys do decide
you want to learn more about Fundrise, I have the
review article down below. If you do want to sign up,
I have an affiliate link in the description below. You guys don’t have to use
it if you don’t want to, but it certainly helps me out. It helps to support my channel and allows me to make
more videos like this. Here is the dashboard here
from my Fundrise investment. My $1,000 investment in June
of 2018 has grown to $1,048.70. I’ve earned about a 5%
return in that time period. I’m in the balanced investing plan, which is a combination of
both growth and income. So, it’s both properties
that are producing cashflow as well as equity investments
in growth opportunities where they’re trying to
buy and fix up properties in areas that are seeing
higher than average growth in terms of population. As you could see here, with Fundrise, you are seeing regular
growth in the account. These jumps here are
when dividends were paid. I’ve been paid two dividends. The quarter one dividends
should be coming up here relatively soon, which
will probably push me into the six to 7% return
category here since June of 2018. Scrolling down here, you can
see that if you take a look at the projects, it gives
you an update on any projects that have been added to your portfolio. I get these emails on a
regular basis as well. I’m currently invested
in 129 active products. This right here is their rating in terms of the quality of that debt and the projected return from that. That gives you an idea of
the risk/reward profile. As you can see here, there’s a 40% debt, 60% equity portfolio. It’s some properties that
are producing cashflow, which is more like a dividend stock, and some equity investments
and growth opportunities, which is like a growth stock. And then if you take a
look here at the dividends, you can see that I earned dividend. The first one was quarter three of 2018, a dividend of 10.16. Actually I just recently
earned a dividend. Next one will probably around April. We recently had a dividend
here on January ninth of 9.53. Another thing to remember here is that dividends are not
guaranteed with Fundrise. Just like with the stock
market, a lot of people think dividends are guaranteed,
but companies can stop paying that dividend or restructure
it at any point in time. We hope they continue to pay dividends, but it is never guaranteed. But so far, looking at my
return here with Fundrise, it is very promising. It’s definitely something
I’m personally going to be investing more money into. Now if we jump over and take a
look at the Fundrise website, we can take a look at the
returns over the last five years. The company pretty much
was formed around 2014. That was the first year that
you were able to invest. We do have a very limited
amount of data here. Like I said, the real
test will be when we see what Fundrise looks like over
the course of 10 or 15 years especially when we have
a bad real estate market. But in 2014, it was a 12.25% return. 2015, 12.42. What’s important to note here is that this return is net of fees. Fundrise collects a 1% management fee. It includes both an asset management fee and some other fee as well. But all in, it’s a 1% fee. This is the return after
your Fundrise fees. Sometimes people will look
at that and say, “Okay. “Yeah, you have a 12.25% return. “But isn’t it really 11.25?” The answer is no. These returns are net of fees. This is what you earn as a return after Fundrise collected that 1% fee. 2016 was their worst year to date at 8.76, which is still a fantastic return. 2017 came in at 11.44 and 2018 at 9.11%. Now let’s go ahead and answer the question that pretty much everybody
is going to be asking. What was the return like for Fundrise here compared to the stock market
if you look at the S&P 500? As we know, 2017 was a fantastic year and the returns from the stock market absolutely obliterate the. Even as good as that 11.44%
return was here with Fundrise, the stock market blew it out of the water. But in 2018, the return from
Fundrise after fees was 9.11%. Meanwhile, the stock
market had a loss of 6.59%. Really, it beat the S&P
500 by about a 15% return, which is relatively substantial. Now if you do include the
fact that the S&P 500, those companies paid dividends, if you factor in those dividends, the S&P 500 returned a loss of 4.75%. But as you can see, in 2018, which is a very short amount of data, Fundrise significantly
outpaced the S&P 500. Now I’m definitely not saying that Fundrise is better
than the stock market or the stock market is
better than Fundrise. Each of these investments I
believe has its own purpose. My goal here is to not have
all of my eggs in one basket and to be diversified across
different asset classes. That is why some people decide to invest in physical real estate or gold and silver or maybe peer-to-peer
lending or even antiques because they want to be investing
in different asset classes that do different things
at different times. Maybe in 2018, the stock
market had a lousy return, but Fundrise had a pretty
relatively good return here. You ultimately want to
have different assets that are gonna be moving in different ways at different times. Fundrise could be one
way of accomplishing that and getting exposure to private
real estate investments. My return here with
Fundrise as you can see here is about just under 5% so far
over the last eight months. Again, if you compare that to the S&P 500, it has outpaced the S&P 500. It’s also an investment
that is very passive. I get my emails from
Fundrise once in a while when they add projects
and when I get dividends. But other than that, it’s
definitely a very passive, set it and forget it investment. I do plan on adding some more
money to this Fundrise account and seeing where this goes
over the next couple of years. But anyways, guys, that is my update here on my small Fundrise investment. I would love to hear what you guys think in the comment section below. Are you a Fundrise investor? What has your experience been? If you guys have any specific questions, drop me a comment down below and I will do my best to answer. Like I said, if you guys want
to open up a Fundrise account, the minimum investment is just $500. It’s gonna be the top link
in the description below. That’s an affiliate link. You don’t have to use
it if you don’t want to, but I certainly appreciate
it as it does help me out and helps to support my channel. More comprehensive review of
Fundrise is down below as well if you’re interested. But thank you, guys, so much
for watching this video. I will see you in the next one.