The biggest news since our launch: Fundrise now pre-funds all deals up front.
No more uncertainty. No more concerns about meeting funding targets. No more delays on closing.
If we like a deal, we fund it, up-front, in full, guaranteed.
Traditionally, real estate crowdfunding platforms operate according to a “Best Efforts” crowdfunding model, where the amount and timing of funding is unknown and not guaranteed.
As of today, Fundrise has solved this challenge.
How did we do it?
The simple answer is: using our own balance sheet. We review and underwrite a deal and then fund our position in full within 15 days. Once the deal is funded, we offer our investors on the platform the opportunity to invest in offerings tied to that deal.
By using our own balance sheet, we can increase the speed of funding and, most importantly, create certainty of execution.
Why did we do it?
The top real estate companies require certainty. We know that you can’t rely on the hope that the crowd provides the required funding in-full and on-time. The “best efforts” fundraising model adopted from donation-based crowdfunding simply doesn’t fit with complex securities-based investments.
In a recent GlobeSt piece on the pros and cons of commercial real estate crowdfunding, Gary Tenzer, principal and managing director of George Smith Partners, said that “one of the biggest negatives [of crowdfunding] is that the sponsor does not know for sure if the money will be there to close a transaction.”
Starting today, this is no longer a risk with Fundrise.
This is the next evolution of crowdfunding. Guaranteed Pre-Funding will increase efficiency and bring down costs, making Fundrise’s online marketplace even more competitive than traditional capital sources.