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What Is Fundrise? And Should You Invest Your Money Here?

Invest in FundriseYou’ve probably seen all the overly-appealing ads at this point, either through Facebook or on TV. Fundrise is a company that invests in real estate projects and earns interest on their loans to developers – often at a rate of 10%-12%.

Here’s where the message gets good for regular schmoes like you and me…

Do you know where Fundrise gets their money from for their investment projects? From the general public who wishes to invest as little as $1,000 in the project. Essentially, Fundrise is a mutual fund company for real estate ventures and cuts out a bunch of middle men in the process.

Sounds pretty good right?

At first glance, yes….but should you invest in Fundrise?

Your Investment in Fundrise

(Updated: 9/29/2017)

There are loads of personal finance bloggers that absolutely love Fundrise. In my opinion though, it’s only because they’ve got a carrot dangling in front of their face — a $50 referral bonus for everyone that they can get to register at the Fundrise site.

Because of this fantastic referral bonus, many PF bloggers fail to dig into the details and truly understand what a Fundrise investment is actually about. Here are the pros and cons as I see them.

The Pros

  • You can invest in real estate with as little as $1,000
  • The income is 100% passive since you have to do nothing other than click your mouse

The Cons

  • Fundrise boasts that investors can earn 6.95% 8.76% on their money, but that’s before regular fees that typically eat up another 3% of those gains.
  • Your money is fairly illiquid, meaning it’s tough to get it back out. If you withdraw your money before the five year mark, you’ll likely bring home only a small portion of your earnings thanks to additional fees and regulations.
  • Your investment could actually go down in value if the real estate project goes bust.

So pretty much you can invest easily, but you won’t make much money (if any) and it takes half a decade if you actually want a positive return. This suddenly isn’t sounding so good is it??

Sure, I could lead you to the Fundrise page and recommend that you sign up so I can make a quick $500+ (figuring 10 sign-ups or more), but would I be able to sleep at night? Not even close. I wouldn’t recommend this option if they paid me $1,000 per sign-up.

In case I wasn’t already clear, DO NOT INVEST IN FUNDRISE.

Where Should You Put Your Money Instead?

If you’re looking to invest in real estate, why not just save up the money to buy a property with cash? It’s not impossible you know. If you earn $60,000 a year and live on half of it, thereby saving the other half, it would only take you three years to save up $90,000. BOOM! That’s enough to buy a house where I’m living!

If hands-on real estate isn’t for you, then maybe REITs (Real Estate Investment Trusts) are a better option. These are essentially mutual funds for real estate projects just like Fundrise, but they come with lower fees and it’s much easier to buy in and sell your shares since it trades just like a stock.

If you’re still interested in real estate, but don’t love the first two options, then you’d probably enjoy Wealthsimple. Simply click the link, answer the questions, and they’ll recommend a solid investment in just minutes.

So let’s recap.

  1. Don’t invest in Fundrise
  2. Consider buying a rental property entirely with cash
  3. If you don’t want a cash rental, look into REITs through an investment company like Vanguard
  4. If you want a cheaper, slightly different option, invest with Wealthsimple.

Be Purposeful With Your Money

Don’t put your money into something just because of a flashy advertisement or because your friend swears by it (they’re probably clueless too). Take the time to learn about the investment for yourself. If you don’t understand the investment, don’t put money into it. It’s that simple.

Instead, think about where you want to be in life 10, 20, or 30 years from now. What do you need to do today to get to that life of your dreams tomorrow? You probably don’t need a fancy investment option that earns 20% a year to do it.

Nope, instead you should probably just:

  • live on less
  • invest more of your earnings into something simple that you understand
  • do this for many years

It’s not exciting and your friends won’t be wowed initially, but when you reach a million bucks in your retirement fund from these seemingly simple moves, you’ll be more than satisfied.

What will you start investing in today?

Investing Money


My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.


  1. Thank you so much for your honestly! I can say on behalf of readers we really appreciate it and take it to heart.

    • Thanks for the kind words, Carolina!

      It’s great to be able to write this blog honestly and not worry about the financial detriment my words might have. I don’t need the money. It’s just a blast to write and hopefully help a ton of people in the process!! 🙂

  2. The fee’s are rather low with Fundrise. You don’t give much evidence. Not saying you are wrong. But, they boast a lot higher then 6.95 percent now. And that is even with lending and other safer deals then just outright buying property. I would really like to see your evidence as I am looking into investing with them. Your article isn’t dated maybe it was from a while back when they first started? Thanks for the article it was a great read and I want to know all of the pro’s and con’s in fundrise. Not many other articles I have read on the matter give any Con. Which is a bad sign of a bad article.

    • Hi Josh. I’m going to look into this again since I have heard that they’ve gotten better. Based on their recent updates, they’re boasting returns of 10%, but I’d still assume that they’ll hit you with 3% (ish – they’re not clear about all fees in their disclosure) fee.

      Also, keep in mind that the real estate market is hot right now. When the economy goes soft again, these numbers will come down.

      Thanks for the question. I’ll review more details soon and update the article for you.


  3. I am an investor with Fundrise and I am very happy. I total approximately 10% yearly in revenues, I have it re-invested every quarter. Fundrise makes it very easy to invest and keep up with all that is happening with your investment, if you were to do that on your own you’d be spending a tremendous amount of time. The 3% fees that they charge is nothing compared to what every other investment company charges to manage your money. Fundrise is not for everyone. If you don’t want to micro manage your money and you can spare a small amount without it affecting you financially AND understand that it is long term (5 years) then this is the fund for you. 5 years is nothing in investment terms. There is nothing that is get rich quick without major risk, and real estate is much safer than any other venture.

    • The more people you have in between you and your investment, the more you’re paying for it. Me — I bought a rental house and manage it myself. I earn 12% on my money, PLUS another 5% from appreciation. So, I basically earn an extra 10% on my money vs. Fundrise each year and put in maybe 5 hours of work to do it.

      I don’t know about you, but it’s totally worth it for me.

  4. This is a terrible article.

    I have been investing with FundRise for about 2 years. I consistently get 8 to 11% returns paid out quarterly, AFTER all fees (I calculate it based on what actually gets deposited in my bank account at the end of the quarter).

    Investing a bunch of money on a single property is VERY, VERY risky! Yes, you “could” get good returns, but you could also lose a ton of time and money. No thanks, I will stick to 8-11% returns from the comfort of my computer.

    • All is well now, Sam – the market is hot. Hopefully you’re still right when the market gets soft, but I fear you won’t be. For me – I’d rather invest in 5-10 properties with cash and get 15% returns or more – even in the down markets.

  5. Lol nice Joke! Didn’t get money from Fundrise, but definitely got paid to write a recommendation for wealthsimple

    • Fundrise wanted to pay me to recommend them. I said no.

      Wealthsimple wanted to pay me for their endorsement. They’re awesome, so I said, “Absolutely!”

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