Today, we are excited to announce our biggest update in over two years:
Immediate Earnings on Your Investments (T+5)
Real estate crowdfunding platforms typically base offerings on a “Best Efforts” crowdfunding model, where your investment sits in escrow until the full amount is funded.
Until today, we did, too.
Now, your investment will begin earning interest as soon your transaction settles.
We now pre-fund all of our real estate projects. Using our own balance sheet and sidecar, we fund projects upfront and then allow you to purchase corresponding project payment dependent notes. The result means that you begin accumulating interest and returns according to your own personal timetable.
Why is this a superior model?
1. You Start Earning Immediately
Under the outdated “Best Efforts” crowdfunding model, investments sit in a non-interest bearing escrow account until the full offering amount is raised or until a pre-set offering period comes to a close.
An investment could sit untouched anywhere from a few days to months, until the funds are deployed for the project. As our investors know, this is a significant opportunity cost and funds could be better put to work elsewhere.
Time spent in cash means you lose value due to inflation.
But now with Immediate Funding, investors start accruing interest as soon as their investment settles—typically within five days (T+5)—eliminating the need for lengthy escrows.
This model more closely resembles the immediacy of investing in stocks, bonds, and other publicly-traded securities, which also settle within days.
2. Fundrise Believes In Its Investments
In “Best Efforts” crowdfunding, real estate companies receive what is raised from individual investors, with no guarantee of funding from the platform.
Now, Fundrise pre-funds every real estate project, using our own balance sheet. We believe in each investment opportunity enough that we’re happy to own the entire deal.
This also puts our “skin in the game” and signals our interest in the success of the projects on our platform.
3. More Quality Investments
The top real estate companies with the best deals require certainty. By funding real estate projects upfront, we are able to negotiate better terms and source more investment opportunities from the best companies in the country.
We believe that these changes will substantially add value for our investors, by increasing the speed with which money starts earning interest, while adding volume and more options to diversify.
If you’re ready to start investing, view our open opportunities here: https://fundrise.com/investments.
Or, if you have questions or feedback, email our Investments Team at email@example.com.