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Fundrise came into existence in 2012. And, it is among the leading real estate crowdsourcing platforms. Not only do they raise money from Venture Capital funds but also directly from investors. The process is known as Internet Public Offering(IPO).
Presently, Fundrise has managed to invest over $2.5 billion. Having represented a favorable deal to investors and real estate sponsors, Fundraise decided to make use of their platform to raise money that can fund their company too.
The Fundrise IPO took effect on Feb 1, 2017, and it was offered directly to existing customers. Although the IPO was good news to their customer base (saving money), investment bankers were no longer needed.
What is the Fundrise IPO?
Unknown to many, most financial institutions have external financial backing. With this information in mind, it explains why they charge very high fees to investors. This way, they can make enough profits for those providing funds to run the business. The whole process is good news only to the institution and those funding it but with low returns for the investor.
With this in mind, Fundrise decided to take a new path by letting its members own it through Fundrise Internet Public Offering. It is the first of its kind. The Fundrise Internet Public Offering structure is cost mindful. And, if it succeeds, you as an investor will also succeed.
Fundrise’s IPO was well received and over 2,300 of its members were across all 50 states with investment orders of $14.6 million in the beginning. The company has been focused on the first-ever online Real Estate Investment Trusts (REITs). They successfully got rid of all middlemen and all profits, which is a plus. Also, those who have the capital and lack the know-how can now carry on independently.
Making the Fundrise Internet Public Offering Investment Decision
The Fundrise Internet Public Offering is the first Online Real Estate Investment trust (REIT). Members were notified to become investors within a specified timeline. Also, they had calculations showing all investors how much they can invest.
According to members, Fundrise has been consistent with dividends, a comfort for further business on the same platform. It is not to say that one does not need to review Funrise’s performance, but with this kind of experience, you are motivated to do more business with them.
Fundrise cleanly presents its deals, and they maintain constant communication on the happenings. Members don’t have to struggle to look for information about them.
However, the downside is that it is illiquid, meaning it does not guarantee a constant income. Income is the primary motivation for investors. With $1,006, a member can acquire a total of 125 shares. Although a small part of Fundrise Internet Public Offering, you will be happy to be one of the owners of a company.
The IPO offer required that members interested had to acquire 200 shares on the lower side or $1,000. Only existing investors were eligible to take part. Before the Fundrise Internet Public Offering went public, the equity stake was undisclosed. However, one can take a wild guess based on the funds raised so far. Fundrise was valued between $80 M – $ 200 M before the IPO.
Following the success of the first Fundrise IPO execution, it is expected that they will continue. It takes proper performance, which has been witnessed in the past as an excellent achievement for more revenue and growth in valuation.
Fundrise Investment Plans
Investing can be a risky affair, and it is always advisable to only invest an amount you can comfortably afford to lose. Fundrise Internet Public Offering is illiquid, meaning it can take between five to 10 years before you can make any profits.
Professional investors advise that investors should consider investing not more than 10% of their investable assets. Due to deregulation, real estate crowdfunding is a new space that might be around for the long term. Below are the Fundrise Investment plans
- Supplemental income
- Balanced investing
- Long-term growth
Fundrise Internet Public Offering (IPO) Pros and Cons
Pros:
1.) A good and straightforward plan with a low cost to enter of about $500 for non-accredited investors.
2.) Constant communication before, during, and after application.
3.) It is a unique entry into real estate investment. It is also diversified into the traditional stock market.
4.) All the work is done for the investor who can have a real estate investment experience without significant capital or knowledge.
5.) No hidden charges in the whole process besides the 1% management fee. However, the cost can be waived if an investor has a referral for 90 days per sign-up.
Cons:
1.) Depending on your investment plan, taxation might be different if you are not in eRITs.
2.) An individual private equity investment like Fundrise Internet Public Offering is illiquid. Income might only come after five years. If you decide to redeem your investment earlier, you sacrifice 1- 3%.
3.) Finally, all investments are risky affairs. You have no guarantee of returns.
In Summary
Invest with Fundrise, a low-cost unique, but diversified quality real estate crowdfunding. A combination of technology and the best expertise at Fundrise cuts costs hence increasing investors’ returns.
If you don’t depend on your investment dividends, you can automatically set your profile to be reinvested and grow your shares. Your bonuses will reinvest in your current plan. But, typically, your rewards will be debited to your bank account.
Real estate is the most sought-after asset by professional investors as it is lucrative and promising. The Fundrise IPO now opens the world of professional investors, more so the most sought-after in the field is now available and open to you.
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