How you Can Use Fundrise to Diversify Your Portfolio?

Electronic real estate investments are changing the long-term investment game for average investors. Is Fundrise the right opportunity for you and your portfolio?

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What is Fundrise?

Fundrise is an upcoming startup solution that assists high-rise skyscraper real estate companies in major cities to secure funding for their projects. Finding primary investors willing to supply millions can be super challenging. This is why Fundrise has come up with a crowdfunding platform that lets anyone invest in a pool of funds used to fund commercial real estate projects across the US, no matter your income or status. The company has an investment team that works directly with real estate developers, manages client portfolios, and handles real estate deals. You can invest in a combination of the company's two primary investments – eREITS, or electronic real estate investment trusts, and eFunds, or electronic real estate funds. Unlike traditional REITs, this company offers eREITs that aren't publicly traded on a major stock exchange. This means you won't be able to sell or cash out your investments as easily as you could with liquid assets such as stocks and mutual funds. This creates greater risk when the stock market is behaving unpredictably and showing volatility.

In order to start investing, one would need at least $500 dollars at their disposal. Fundrise is a longterm investment strategy, so expect to essentially invest and tie up your funds for at least five years, as your investment will be illiquid.

A drawback of this investment strategy can be understanding all of Fundrise's fees. In addition to the 0.15% annual investment advisory fee and 0.85% annual asset management fee, Fundrise eFunds may apply development and liquidation fees if you were to pull your profits. You may also run into other charges for different retirement accounts.

Is this right for you?

Real estate is both an illiquid asset and also a long-term investment. These assets generally assume higher volatility and require long-term commitment. According to Fundrise’s website, Fundrise is designed for real estate investors who have a minimum time horizon of five years. This means you won't be able to cash out any earnings immediately. If you've got at least $500 to invest in real estate, and you don't mind letting your money sit for multiple years, real estate investing could be right for you. Fundrise ultimately selects and manages the real estate projects you're invested in, but you can decide how to allocate your investments.

Fundrise says it has invested more than $4 billion in real estate across the country, and manages more than $79 million in dividends for more than 130,000 investors, according to its website. Fundrise has also received an A- rating with the Better Business Bureau, which overall suggests that Fundrise is trusted and interacts well with its customers, promptly acknowledges and settles customer complaints, and exhibits trustworthy business practices.

Overall Fundrise is the perfect investment tool to diversify your long-term portfolio, as long as you are willing to part with your investment for at least 5 years or even longer, for steady long-term growth.