Real estate profits are nothing new, but the digital age has given way to a new method for investing.
Today, companies like Realty Mogul, Equity Multiple, PeerSheet, and Fundrise have taken the concept of crowdfunded real estate to the internet, allowing individuals to invest in “eFunds” for supposed big returns.
But can these companies really hand you a fortune?
I’m here to tell you the truth about the profits to be made through companies like Fundrise, and to show you how to get the best return from your investment.
Fundrise in particular is taking the crowdfunding market by storm recently, boasting a ‘90-day return on investment guarantee or your money back’ and taking in over $300 million from roughly 17,000 individual investors in 2017 alone.
The company, like its competitors, offers diversified real estate portfolios via an online platform, called eFunds, which are like REITs and ETFs but managed through Fundrise.
Individuals can invest in the company, which then reinvests the money in a number of different real estate ventures, which offer you returns as they rake in profits.
The company’s stated mission is to make real estate investing available to individual investors so they can share in the profits. Sounds great, right?
But is it able to deliver?
Fundrise does have some great qualities for investing. It has a 90 day guarantee of return, which minimizes your risk upon initial investment.
The company also offers small investment minimums—as low as $500!
Investing directly in real estate costs a fortune (literally), whereas a small investment that grows at a high percentage rate is a lower risk and a better return to your wallet.
However, Fundrise, along with most other crowdfunding companies, is not consistent in the profits that it hands out to customers.
And, even with safeguards in place, the company and its competitors all have hidden fees and red tape to contend with, which hack away at the profits you make, if you make any at all.
And if that weren’t enough to make us anxious about crowdfunding, this new system of online diversified investment has yet to be tested in a declining market.
Though Fundrise boasts the opportunity for the perfect no-effort real estate fortune, in reality it may be more of a risk than it’s worth.
But before you lose hope at an effortless fortune, I can tell you where the real money is in the real estate market: REITs and Real Estate ETFs.
You might be thinking—isn’t that the same as investing in Fundrise?
When you invest in Fundrise or a company like it, your money is eventually going into real estate in the form of REITs and ETFs, but not directly.
Fundrise is like a channel that directs your funds for you, but in the process it siphons off a percentage for itself.
You can see this in the form of service fees and even overpriced stocks. For example, a real estate stock invested in through a company like Fundrise might cost you $100, but the actual asset value might be $90 or $95.
So, with companies like Fundrise, you are not simply investing, but rather paying someone to invest a percentage of your funds for you.
Fundrise profits off of this by making the masses believe the real estate game is too complicated to win at without expert help.
But you don’t have to fall victim to this trap.
Because investing in diversified real estate is as easy as finding a REIT or ETF in the sector that is steadily earning profits.
If you aren’t sure where to look, that’s what I’m here for. In fact, I can share a real estate opportunity with you right now.
There’s one REIT that I’ve been keeping an eye on: Arbor Realty Trust (ABR).
This stock has been on the rise for years, increasing 352% just this year. Just like with Fundrise, it offers a diversified investment that can be as small as $500 or as big as $100,000—it’s up to you.
But, unlike Fundrise, there are no fees or premium prices. And unlike Fundrise, this stock, and other REITs and ETFs like it, have been tested by declining markets, and they have continued to succeed.
Let everyone else pay Fundrise to find real estate investments in return for higher costs.
With stocks like Arbor, you can earn 56% returns a year where Fundrise only offers 30%, and it’s still completely effortless.