You should (naturally) be a little hesitant about jumping on board any investment opportunity that promises you can’t lose money. That’s just not the way that investments work!
Fundrise doesn’t try to play that game with its investors. This investment vehicle is 100% open and transparent about the risks that investors must be comfortable with and the potential for losing money. The opportunity to make a lot of money on Fundrise definitely exists – but the chance to lose money exists, too.
Below we get into the nuts and bolts of what Fundrise is, how it works, and whether or not it is an investment vehicle you’ll want to consider going forward.
Let’s begin!
Can You Lose Money with Fundrise?
Most folks know that you can make a mountain of money on Fundrise, and investment opportunity that opens up the world of REITs (Real Estate Investment Trusts) to folks that might not have otherwise had an opportunity to invest in private commercial and residential real estate.
At the same time, though, there is certainly the potential to lose at least some of your investment.
Obviously, this isn’t something that Fundrise actively advertises or promotes – the same as any other investment opportunity out there.
They do, however, open up about the opportunity and risk levels that investors will have two wrangle with. They are also super transparent about your profit potential as well as the potential for investment loss, too.
It’s important that you weigh both of these thingsbefore you pull the trigger and fund your Fundrise account.
Not only do you need to know exactly what you are getting into with Fundrise and REITs, but you also have to understand that any money you put into the account to invest with Fundrise can be lost through absolutely no fault of your own if the market turns sour.
What is Fundrise, Exactly?
To put it simply, Fundrise is a “financial technology” company based out of Washington DC that allows for the crowdfunding of Real Estate Investment Trusts (REITs).
Instead of having to be a certified and accredited investor (having a net worth north of $1 million, not including your home, amongst a number of other factors), members of Fundrise are able to jump on board real estate investment opportunities for as little as $10.
Yes, you are reading that correctly!
It’s really possible to invest in real estate with as little as $10 just by opening up a Fundrise account.
Fundrise already has more than 200,000+ investors contributing to a pool of capital that holds north of $7 billion worth of real estate all across the United States.
Members saw an average annual return on their investment that got close to 23% in 2021 (way up from the 7.3% they received in 2020) – but the potential is always there for the return to go negative.
Yes, it’s possible (though the risks are managed and insulated as much as possible) to lose money with Fundrise.
Breaking Down the Fundrise Opportunity
The coolest thing about Fundrise is that it’s possible to invest in a diversified portfolio of different real estate properties across the country with as little as $10.
Real estate has always been the pinnacle of investing, not just in our modern times but throughout human history. Holding land – and developing real estate – can transform your financial future (and generate real, life changing wealth) faster than maybe anything else.
At the same time, investing in real estate is not something that everyone and anyone has had the opportunity to do in the past.
Real estate prices continue to skyrocket, investors jump on top of any red-hot opportunity they come across, and regular folks are finding themselves locked out of real estate investing more and more frequently.
Fundrise changes that completely.
With this REITs investment opportunity anyone (and we mean ANYONE) can start investing in real estate with as little as $10.
Who is Fundrise Designed For?
Fundrise was designed and developed for folks that wanted to enjoy the wealth generating potential of real estate without having piles and piles of their cash and capital tied up in these real estate transactions.
The platform was also designed for folks that might not ever be able to accumulate the hundreds of thousands (sometimes millions) of dollars necessary to invest in traditional real estate deals, either.
Instead, this crowdfunding platform (fully licensed, regulated, and approved by the SEC) makes it easy and accessible for anyone to get into real estate – even with next to no money to put down initially.
That’s a game changer.
Is Fundrise a Smart Investment?
Only you are going to be able to determine whether or not Fundrise is a “smart investment”.
As we highlighted above, there is definitely a lot of potential in REITs and the kinds of funds that Fundrise makes available.
Being able to jump into real estate with just $10 (less than what you pay for an entrée at practically any restaurant) would have been impossible up until Fundrise hit the market.
On the other hand, though, every investment – including one as intelligently designed as Fundrise – as risk and potential downside.
It’s a possibility (no matter how small) that your Fundrise funds could disappear in the blink of an eye with no real opportunity your recourse to generate that money again.
Make sure you do your own research in order to finalise your opinion.
Closing Thoughts
All in all, there’s a lot of buzz and a lot of excitement over everything that Fundrise promises to bring to the table in the world of real estate investing. Especially for your “Average Joes and Janes”, people that wouldn’t have had an opportunity to invest in these kinds of real estate deals before.
That does not mean, however, that there’s no risk to getting into Fundrise deals or becoming a Fundrise member.
Make sure that you have fully vetted this opportunity, that you’re investing only which you would be completely comfortable losing tomorrow, and that you continue to adjust your investment strategies and your capital allocations as time goes on!
References
https://financebuzz.com/fundrise-review
https://www.goodfinancialcents.com/my-fundrise-returns-is-fundrise-worth-it/
https://www.creditdonkey.com/fundrise-review.html
https://www.nerdwallet.com/reviews/investing/brokers/fundrise