Real Estate Investment Platform Fundrise to Lower Entry Barrier for New Class of Investors

Real estate investment platform Fundraising recently announced that it is lowering the barrier to entry for a new class of investor, meaning “greater potential for the next generation”.

Fundrise CEO Ben Miller notes that the Platform has continued to advocate bringing the “best alternative investments” in the world to almost all retail investors – “real democratization”.

The Fundrise team writes in a blog post that it is relaunching the starter portfolio, which has now been specially developed for people who are new to the facility. The newly launched Starter Portfolio offers the lowest investment minimum “ever at $ 10”, access to their flagship fund, a focus on investor education and “quarterly liquidity with no penalties.”

Fundrise says its goal is to provide a “bespoke” experience for investors of “all net worth” and experience levels, “whether you make your first investment or invest tens of thousands, thousands or millions of dollars”.

Since founding Fundrise almost 10 years ago, they have been committed to “growing our business with one fundamental goal: to provide every single investor with the best alternative investments in the world”.

As mentioned in the update from Fundrise:

“Transforming the status quo into one of the most deeply rooted asset classes in history – private market real estate – requires almost constant innovation: in technology, in the application of financial solutions, and in the way we help the public see their own portfolios . “. And we’ve made significant strides: Fundrise manages more than $ 1.5 billion on behalf of our 150,000+ active investors, making it America’s largest direct-to-investor real estate investment platform. “

Miller, the company’s CEO, added that he is happy to announce another change to the Fundrise platform. One that they believe should help unlock a “whole new” level of accessibility.

Miller confirmed that they are re-launching the starter portfolio, which is now “specially designed for new investors.”

Over the past year, they have seen an “influx of interest” in alternative investments “especially from young investors,” Miller said, noting that this was an “investor-hungry group”. Time is one of their most valuable assets (everyone applauds the miracle of compound interest). “

The new starter portfolio offers:

• Our lowest investment minimum ever: “A minimum of $ 10 opens the door for millions of new investors to start growing their portfolios immediately. (The starter portfolio previously required at least $ 500.) “
• Access to our flagship fund: Investors will be “fully allocated to our flagship fund, which already owns over $ 250 million in real estate across the country, from the brand new single-family home market to larger last mile e-commerce logistics centers.”
• A focus on investor education: “We work with some of the best-known figures in financial literacy to develop programs that aim to demystify the world of alternative investing.”
• Quarterly liquidity, no penalty: Fundrise is “still clearly geared towards long-term investors”. However, the structure of our flagship fund “enables us to offer a penalty-free redemption process every quarter in the event that investors are forced to unexpectedly liquidate”.

Fundrise claims that in recent years it has been noticed regularly that the investors attracted to its platform are “unusually patient, resilient and forward-looking”.

Management of the company noted that just because an investor does not have “large fortune” in private market real estate does not mean that they do not understand the value that “long-term thinking” and planning can bring “when given time to thrive . “

As Fundrise noted, a small investment “that is added to a small investment becomes a small investment, and so on.

The company management added that small investors were “historically blocked” from investing in real estate. Real estate investments in the private equity world are typically designed to manage a relatively small number of “massive transactions on behalf of a few institutions,” Fundrise noted.

They also mentioned that the barrier to entry is high, “in part because this type of investment typically involves dozens of time-consuming, manual (ie expensive) processes”.

They continued:

“Enter the transformative power of technology. Our proprietary software enables us today to efficiently manage millions of transactions on behalf of hundreds of thousands of investors at almost zero marginal cost. We believe that the new starter portfolio will open our platform to millions more. “

The Fundrise team also noted that its goal is to provide a tailored experience for investors of all net worths and skill levels, “whether you invest tens of thousands, thousands or millions of dollars. Fundrise offers a total of five account levels: Starter, Basic, Core, Advanced and Premium. “

Fundrise confirmed that investors can upgrade to a higher account level “anytime their account balance grows”.

The company’s CEO added:

“While today’s announcement will primarily benefit the growing generation of new investors, more experienced and wealthy investors shouldn’t feel left out. We have more innovations in development that I would like to share with you in the coming months. “