Fundrise Review – Scam or Legit?

You may have heard of Fundrise if you are looking to do real estate investment. But you may ask, “Is Fundrise a scam?”

Thanks to the technology, crowdfunded real estate investing has been a popular real estate investing method over the last decade.

But many people don’t understand the risks of using the investing platforms like Fundrise to make investments in real estates. And there are many scam-like platforms out there that you have to be careful of.

To be transparent, I am not an affiliate of Fundrise, so you can rest assured that my opinions are honest and unbiased.

In this review of Fundrise, I will cover the following to help decide if you should invest with Fundrise:

What is Fundrise?

Fundrise is one of the most popular crowdfunded real estate platforms in the United States. It was founded in 2010 by Ben Miller. It caters to small investors instead of institutional investors.
Is Fundrise a Scam?

If you don’t know what a crowdfunded real estate platform is, it is just another word for “real estate partnership”. It means instead of investing a large sum of money by yourself, crowded funded investment allows a group of people to contribute a smaller amount of money into an investment and share the returns. With Fundrise, you can invest as little as $500 to get started.

Crowded real estate platforms provide the technology to allow you to stay updated on individual projects and track your real estate investments.

Recommendation: Here’s The Best Alternative

What is the Fundrise Pricing?

To use a platform like Fundrise, you have to pay a flat annual fee of 1%. This 1% fee includes 0.15% of investment management fee and 0.85% of asset management fee. You also have to pay an asset origination fee, which is one time fee running from 0-2% of the initial investment. There is also an early redemption fee if you withdraw your funds before the 5 years period.

Here’s an overview of the Fundrise Pricing:

  • Asset Management Fee: 0.85%
  • Investment Management Fee: 0.15%
  • Asset Origination/Acquisition Fee: 0% – 2% (Depending on your investment)

What Products Does Fundrise Offer?

Fundrise offer two main products, which are eREIT (electronic Real Estate Investment trusts) and eFunds

For eREIT, Fundrise uses crowdfunding to acquire, manage and sell properties.They are less liquid than the traditional REITs as they are not publicly traded like stocks and bonds.

As for eFunds, this kind of electronic fund is a managed and diversified portfolio of residential real estate assets.

Pros and Cons of Fundrise

Pros of Fundrise

  • Low Entry Barrier: you can start investing with Fundrise with $500
  • No Accreditation: any investor in the united states, regardless of net worth can invest with Fundrise
  • 90-Day Guarantee: Fundrise will buy back your investment if you are not satisfied with your investment in the first 90 days (there are conditions to meet)
  • Commercial Real Estate Access: you can invest in Commercial real estate with little money, which is generally an expensive investment.

Cons of Fundrise

  • Low Investment Liquidity: Fundrise eREITs are not publicly traded. There is no secondary market to sell your investment to others.
  • Unknown future performance and returns
  • Tax liability: you have to pay regular income tax on your earnings
  • Lack of fees transparency
  • Complex investment, which requires a lot of due diligence

Is Fundrise a Scam? Why don’t I recommend Fundrise?

There is no evidence to show that Fundrise is a scam so far. It regularly files reports with the Securities and Exchange Commission (SEC). The reports show that it has a strong balance sheet.

But many people who encourage you to make money on crowdfunded real estate platforms like Fundrise will not tell you the hidden risk involved.

Actually financial regular FINRA and the Securities and Exchange Commission issued warnings to investors about the risks that are specific to non-traded REITs.

Firstly, most crowdfunded real estates platforms are illiquid. What it means it that you cannot sell your investment and get your cash back whenever you want.There are lockout periods or redemption fees if you want to sell your investment. This risk is especially high during economic downturn when there is a lack of demand. Fundrise can suspend redemptions as they see fit.

Secondly, most crowdfunded real estate platforms like Fundrise have a lot of hidden fees such as front end load and early redemption fees. You have to be careful about that to avoid losing money.

Thirdly, there is no long track record available because crowdfunded real estate investing is relatively new. So there is not so much data you can see and estimate how much you can earn in reality. It is not clear how this kind of non-traded REIT will perform in recession like 2008.

Fourthly, Fundrise makes most of its money from origination and acquisition fees. That actually creates a conflict of interest because Fundris’s revenue is linked with the volume instead of quality of projects or investment on its platform. And during an economic downturn, the pace of originations will slow down, which will create financial issues for Fundrise.

Therefore, I would not recommend investing with Fundrise to make passive income.

Although real estate investing is one of the most popular ways to grow your wealth, it is unpredictable that it doesn’t guarantee a positive return. And you may be able to make some money in a few attempts, but lose it all in the other attempts.

Is There an Easier and Better Alternative to Make Passive Income?

If you really want to make a stable and secure stream of passive income, I would suggest you starting an affiliate marketing business online instead.

Affiliate Marketing is perfect for anyone who is new to online business.

In fact, of all the online business models I’ve tried, affiliate marketing is the easiest and most rewarding so far.

In affiliate marketing, you can actually run your business almost with zero cost and achieve a steady and sustainable passive income to pay for your bills. You don’t need any initial capital and can even do it as a side hustle.

And if you really want to learn affiliate marketing and build a business from scratch, I’d recommend you to get started with the most reputable platform for affiliate marketing: Wealthy Affiliate.

Wealthy Affiliate is an all-in-one platform for building your affiliate marketing business from scratch. It offers you a free account (including a free website) with comprehensive training on SEO (free traffic methods), which enables you to get started with affiliate marketing right away without paying a penny.

But How Much Can You Earn with Wealthy Affiliate?

A 21-year old student from Wealthy Affiliate was able to earn $7,395 in just 1 week, which means he made more than $1k a day…all while using free traffic methods.

Is Fundrise a Scam?

Wealthy Affiliate has existed for 15  years and there are many success stories in the past decade.

To give you more examples, here are some of the other inspiring success stories of Wealthy Affiliate members.

Where to Join Wealthy Affiliate?

Wealthy Affiliate has a very simple pricing scheme. It has free and premium membership.

If you want to feel about Wealthy Affiliate, you can sign up for the free starter membership here (no credit card required). You can select to be a free member with no time limit.

And as a starter member, you can get instant access to the community, live chat, over 500 training modules, 2 classrooms, networking, commenting, 1 free website, access to the keyword tool.

You can enjoy all these values without paying a penny.

So I strongly recommend you to register a free account and see it yourself.

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2 thoughts on “Fundrise Review – Scam or Legit?”

  1. After deposits been made by me. I eventually told the company i need to make a withdrawal and they told me it would take at least two weeks to get my money back but it was all a lie. The Binary options broker named “IQ OPTION” were pushing me to make more deposit so that i would be able to make more massive gains.
    I invested the total sum of $265,000 and i made double of my initial deposit and i decided to make a withdrawal of my whole funds. The broker started telling me lies and i was forced to play along because i had no option. He even told me that if i was going to get my whole money that i would have to make approximate $20,000 to access the vat and government withdrawal fee from one country to another. He even said that after the payment would be made i would receive my receipt. It took me a while, but i was able to get the $20,000 and i did the transfer to him but after that he never answered my calls anymore and i felt so sad because i had no proof given to me. I was so confused and i did not know what to do and i started emailing the “IQ OPTION” and they eventually replied me saying that they had transferred my money to my bank account, I felt happy and i was given a reference number to take to the bank. I went to the bank and told them about the transfer and they said they had nothing like that in their data base. The bank said i should contact the people that sent the money to be sure. A few days later i called the broker and he said to me that the money was transferred that i should go back to the bank and complain because the fault is from them. I even asked for a copy of the wire transfer as a proof to take to the bank and he got so angry and never replied me anymore. I contacted them and got several excuses, then I knew that I have been scammed, I complained to my colleague at work who directed me this recovery experts, Mr. Jim Kim that helped him, I contacted him immediately, what surprised me most that i recovered my money that same week. you can contact him via [email protected] and I did as he instructed me and it was helped. Good luck as you contact him for help.

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