Success Crafted

Fundrise: The Real Estate Investment Platform of the Future

Fundrise: An Innovative Investment Platform that Offers High Returns

Investing in real estate assets is not an easy task, especially if you are a small investor. You either need to have substantial capital or expertise to make sound investment decisions in this asset class.

But what if there was a way to invest in high-growth companies and income generating real estate assets without committing large sums of money or having prior knowledge of this sector? That’s where Fundrise comes in.

Fundrise is a real estate investment platform that allows small investors to invest in institutional-quality real estate assets that have historically been available only to the ultra-rich. In this article, we’ll take a closer look at how Fundrise works, its core product, assets under management, and management fees.

How Fundrise works

Fundrise’s core product is a real estate investment trust (REIT). Historically, REITs were created mainly for institutional investors, but Fundrise allows small investors to pool their resources and purchase income-generating real estate assets in a cost-effective manner.

So, how does Fundrise do this? They use crowdfunding to pool funds from investors and fund various real estate projects.

As an investor in a Fundrise REIT, you will own a share of that trust, which holds a diverse portfolio of real estate assets that are expected to generate income for the trust. This income is then distributed to each investor, although tax treatment can vary depending on the type of account.

Fundrise’s Real Estate Assets

Fundrise focuses on investing in high-growth companies and income-generating real estate assets such as apartments, office buildings, hotels, and shopping centers. The platform targets properties that have the potential to provide long-term stable cash flow and capital appreciation.

Currently, Fundrise has over $1 billion in assets under management (AUM), and as an investor, you have the option to invest in different Fundrise REITs based on your investment preference.

Management Fee

Fundrise charges a fee for managing the assets of the REITs. This fee is based on a percentage of the total assets under management and is deducted from the income generated by the REIT. The fee varies with the type of REIT and other factors, but typically ranges between 0.85% and 1%.

The management fee structure of Fundrise is more investor-friendly compared to that of traditional REITs that charge high fees and often have hidden fees that are not disclosed to the investor.

Conclusion

Fundrise is a game-changer in the real estate sector, offering a cost-effective and transparent way for small investors to invest in high-growth companies and income-generating real estate assets. With a large asset base, diverse portfolio, and competitive management fees, Fundrise allows investors to start building their real estate investment portfolios without the need for substantial capital or previous knowledge of the real estate industry.

Overall, Fundrise is a great platform for investors looking to diversify their portfolios by including real estate assets. While there are risks associated with any investment, investing in a Fundrise REIT could provide investors with the potential for high returns.

As always, we advise investors to do their due diligence and consult a financial advisor before investing in any REIT. In 2017, Fundrise, one of the leading real estate investment platforms in the United States, was rocked by a scandal following allegations of extortion by a former executive.

The incident tarnished the start-up’s reputation and caused a significant drop in investor confidence in the platform. In this article, we’ll explore what happened during the scandal, Fundrise’s response, and the aftermath.

Background on the JOBS Act and Reg A+

The JOBS Act is a piece of legislation that was passed in 2012 and designed to make it easier for start-ups and small businesses to raise capital by facilitating public offerings. The Act created new regulations such as Reg A+ that allowed companies to raise up to $50 million from the public without going through the traditional IPO process.

Reg A+ was aimed at creating opportunities for non-accredited investors to participate in the private markets, which were previously reserved for institutional investors and the ultra-rich. Fundrise’s e-REIT and its popularity among retail investors

Fundrise launched its e-REIT in 2016, making it the first online real estate investment trust to offer non-accredited investors access to private real estate investments.

The e-REIT was popular because it had a low fee structure, which allowed investors to benefit from attractive returns, whereas traditional REITs charged high fees. This structure also enabled investors to access private real estate investments with smaller amounts of capital.

McCord’s extortion allegations and Fundrise’s response

In 2017, Michael McCord, a former executive at Fundrise, filed a complaint with the Securities and Exchange Commission (SEC), alleging that he was being extorted by Fundrise’s co-founders Ben and Dan Miller. According to McCord, he was asked to sign an agreement that would silence him about the company’s alleged fraudulent behavior in exchange for millions of dollars.

The complaint also alleged that Fundrise had engaged in other criminal behavior, including wire fraud, when it raised money through Reg A+. Fundrise responded to the allegations by denying the claims and stating that McCord was terminated for poor performance.

Fundrise further stated that it had hired an independent accounting firm to investigate the allegations and that it would address all the issues raised in the SEC complaint. McCord’s claims and Fundrise’s rebuttal

McCord accused Fundrise of fraudulent behavior, claiming that the company had inflated its assets under management and that the management team had taken money from the company for personal use.

Fundrise rebutted these claims by pointing out that McCord was fired for bullying and harassing employees and that the SEC had declined to pursue the allegations.

The Aftermath

Resolution of the dispute between Fundrise and McCord

The dispute between McCord and Fundrise was settled out of court with an undisclosed outcome. However, both parties agreed to keep the outcome confidential, and no additional information was released.

Fundrise’s success post-scandal

Despite the scandal, Fundrise continued to grow and expand its offerings. The platform has generated cumulative annual returns of over 12% since its inception and has raised hundreds of millions of dollars from investors.

In 2018, Fundrise also launched a growth equity fund to help finance start-ups that were transforming the real estate industry. McCord’s career after Fundrise

After leaving Fundrise, Michael McCord co-founded McQueen Farms and became the CEO of Alumshares, a digital investment platform for alumni-funded start-ups.

Although he is no longer involved with either company, McCord remained active in the investment industry, focusing on providing opportunities for retail investors to participate in the private markets.

Conclusion

The Fundrise scandal caused significant disruption to the online real estate investment industry, but the platform managed to survive and grow despite the turmoil. While the situation was alarming, the company acted transparently and ensured the allegations were thoroughly investigated by an independent third-party.

With the ground-breaking e-REIT and the expansion of its offerings beyond real estate, Fundrise remains a trailblazer in the investment space. Fundrise is a real estate investment platform that allows small investors to invest in high-growth companies and income-generating real estate assets.

Through crowdfunding, investors can purchase income-generating real estate assets that were previously only available to the ultra-rich. Although Fundrise faced a scandal in 2017 following allegations of extortion by a former executive, it continued to grow, and the dispute was settled out of court with undisclosed outcomes.

Fundrise experienced great success post-scandal, generating cumulative annual returns of over 12% since inception and raising hundreds of millions of dollars from investors. The platform remains a pioneer in the investment space, offering transparent and cost-effective access to private real estate investments.

Popular Posts