Fundrise is an equity crowdfunding platform for real estate that has been around since 2010. Their focus is on connecting investors with borrowers without using traditional middle men, which add unnecessary fees and time. Fundrise believes that they can change the way that cities are built by empowering local people to invest in places they care about and allowing them to own a little part of their community.
So far they have done great. According to The New York Times, “Fundrise has cracked the code on how to do crowdfunding well.” The platform has raised $113.2 million to date, with a network of over 37K investors and more than 500 real estate companies. This year was a particularly good one for them, with new things having been introduced on the platform and more to come in 2015!
Overall, more than 25 high-quality investments were funded on the platform this year. Investors’ average annual yield is 13.75%. Astonishingly Fundrise states that:
“We’ve had zero defaults and zero missed payments, to date. In fact, every single deal is performing as projected.”
That’s an amazing track record considering many crowdfunding campaigns are known to experience delays or not come through in the end.
Some of Fundrise’s offerings this year included single family homes as opposed to their usual residential and commercial properties. One of those was a luxury waterfront home in the Hamptons, which received a $1M investment (with a projected 10.5% annual return). Fundrise also partnered with Larson Realty Group to offer $100 shares in the redevelopment of the former Tiger Stadium in Detroit.
The company’s continued success and support from established investors is helping them prove that their business model works – and is a secure and viable option for investors who might be weary of crowdfunding. As of now:
“Real estate and tech leaders including Renren, Inc., Guggenheim Partners, and the President of Silverstein Properties invested $34M into Fundrise, showing their support for real estate crowdfunding.”
On December 19the company announced that investors could get immediate earnings on their investments. Fundrise is now pre-funding all of their real estate projects so it only takes about 5 days for an investment to settle and start earning interest. With most other crowdfunding models the money sits in escrow until the full funding is reached or “until a pre-set offering period comes to a close.”
As Fundrise continues to work on high-profile projects, more and more people are learning about the benefits of investing in real estate online and finding out about the opportunities they have to invest in their cities without needing to be an accredited investor. The new features announced this year have helped make the service more accessible, simple, and safe. We look forward to watching how Fundrise grows and evolves in 2015.
