An “eREIT™” is a real estate investment trust (known as a “REIT” for short) available on Fundrise. By offering our eREITs™ directly through the Fundrise platform, we are able to cut out traditional middlemen common in the REIT industry, which allows us to reduce upfront fees by approximately 90%.
Each eREIT™ intends to invest in a diversified pool of commercial real estate assets, such as apartments, hotels, shopping centers, and office buildings from across the country. Each eREIT™ can earn money through income, such as rent, produced from the assets it owns, as well as appreciation in value of the properties themselves.
Unlike many other REITs, the Fundrise eREITs™ offer more transparency and roughly 90% lower fees. Our eREITs™ are nontraded. Generally speaking nontraded REITs have less liquidity than those that are publicly traded. However, the Fundrise eREITs™ offer quarterly redemptions, although some limitations apply.
The primary differences among the eREITs™ are:
Investors in one eREIT™ will have exposure solely to the assets held by that eREIT™.
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In compliance with Regulation A+ Tier II, we are only permitted to raise $50,000,000 in each eREIT™ per year. Once this $50,000,000 cap has been reached for the year, we are unable to sell additional shares in that eREIT™ pursuant to Regulation A+.
Each eREITTM has adopted a quarterly redemption plan to provide periodic liquidity, subject to certain limitations. For more information regarding the quarterly redemption plan, please see the disclosure contained in the Offering Circulars.
These are longterm investments. Each eREITTM plans to look for opportunities to provide liquidity to its investors after approximately five years. While we expect to seek a liquidity transaction in this time frame, there can be no assurance that a suitable transaction will be available or that market conditions for a transaction will be favorable during that time frame.
While each Fundrise eREIT™ has a unique investment strategy, each eREIT’s™ broader investment goal is to identify high quality opportunities with superior risk-adjusted returns. In today’s market, we believe that there are opportunities for relatively favorable pricing in assets below $100M in total value.
All assets acquired by the eREITs™ are located in the United States.
The Fundrise Rating is based on letter ratings ranging from A to E that provides investors withthe ability to easily compare featured assets across the Fundrise platform.
The Fundrise Rating system is meant to be objective and is driven by factual information about the investment—for example, whether an investment is “groundup development” or “stabilized,” or what the total leverage is on the asset.
Fundrise Ratings are for informational purposes only. Each rating is impersonal and not individualized for any specific investor’s financial situation and is not investment advice. These ratings are not intended to be, nor should you interpret them to be, a prediction of how a particular investment will actually perform. Each investor should always carefully consider investments in any security and be comfortable with his/her understanding of the investment. An investor may also consider consulting investment professionals. The full Fundrise Rating matrix can be found here along with explanations of each rating.
No, the Fundrise eREITs™ are passive investments. There is no need to select individual assets to allocate your funds. Each investment in an eREIT™ is automatically diversified across all current and future assets held by that eREIT™.
The Net Asset Value (NAV) per share represents the estimated value of a single share based on a variety of factors including potential changes in the underlying value of real estate assets owned. After an initial ramp-up period for each offering, NAV is typically adjusted on a quarterly or semi-annual basis. While NAV may be used to determine the Redemption Price of a share, it is only an estimate of value and the actual market price that someone would pay for such share may vary widely.
It is not uncommon for investors to see a decline in NAV during the first few quarters of operations (i.e. the “ramp-up” period) as a result of standard up front offerings costs as well as costs related to acquiring assets. Much like closing costs incurred during the purchase of a new home, these are generally not commonly recurring expenses, and are therefore unlikely to impact the long-term value of your shares.
Investors in each eREIT™ will receive a 1099-DIV at the end of each year.
Yes. Audits will occur annually and will be disclosed to investors as part of the Fundrise eREIT™ annual report on Form 1-K, which is required to be publicly filed with the Securities and Exchange Commission by April 30 each year.
Yes. The Fundrise Dividend Reinvestment Program “DRIP” allows you to automatically reinvest the dividends you earn from your investments directly back into offerings on the platform. For more information about the program, please refer to the full DRIP documentation.
You may opt into or out of the Fundrise Dividend Reinvestment Program (DRIP) at any time by logging into your account settings here.
In the “Investment Accounts” tab, click on the name of the account. Once you have clicked into the account, scroll down to the “Dividend Reinvestment” section, click “Edit”, and make your selection. However, please note that you must do so prior to the end of the quarter in order for your selection to be applied to that quarter’s dividends.
In addition, please note that if you wish to opt into DRIP for an entity or joint account, you will need to make a separate manual selection by clicking on the name of that account.
Your dividends are reinvested according to the plan you select here.
If you choose the “Standard” option, dividends will be reinvested into the same offering from which they were issued. If that offering is unavailable, dividends will be automatically reinvested equally across all available offerings.
If you choose the “Advanced” option, dividends will be reinvested into the specific offering(s) you select. If your selection becomes unavailable, dividends will be automatically reinvested equally across all available offerings.
Yes. You may opt out of DRIP or adjust your DRIP preferences at any time. However, please note that you must do so prior to the end of the quarter in order for your selection to be applied to that quarter’s dividends.
No. At this time, there are no fees associated with participating in the Fundrise Dividend Reinvestment Program (DRIP). For additional information, please refer to the full DRIP documentation.
Fundrise is an online investment platform for commercial real estate. Fundrise gives investors the ability to:
You can get started as an investor on Fundrise by creating an account here.
The investment and checkout process is conducted online. You will be prompted to provide or verify any required information, as well as to make the necessary acknowledgments electronically.
The terms of each investment on Fundrise are specific to that listing. Prospective investors should review in detail the offering documents provided for each investment opportunity.
The Fundrise platform provides direct communication with investors, including ongoing reporting and updates on the status of your investment, as well as the delivery of tax filing and other relevant materials.
Projected returns and distributions, as well as a timetable for milestones and a distribution schedule, would be specific to each listing and, when available, would be noted in the offering documents for that investment.
After an investment has closed, investors can track its performance in their portfolio. Within the portfolio, investors will find all the relevant deal documents, as well as receive updates, distributions, and tax documents.
As long as you are an investor, we will send you a Form 1099 or a Form K-1, as appropriate, by approximately mid-March of the following tax year.
No, at this time Fundrise investments are only available to US residents.
International investors may currently invest through some US-based entities. Please contact email@example.com for more information.
Any US resident over the age of 18 can currently invest.
Investors are expected to receive distributions quarterly; however, distributions may be more or less frequent depending on investment strategy, market conditions, and other factors.
As evidence of your investment, you will be provided with an electronically executed subscription agreement, as well as record keeping regarding distributions and other information, through your account on the Fundrise website.
IRS Form 1099-DIV is sent to investors annually and provides the tax character of any distributions (dividends and any other distributions) paid to you during the tax year.
You received a Form 1099-DIV because you received distributions from one or more of your investments in an eREITTM. To enable you to properly report these distributions to the IRS, the Form 1099-DIV shows the tax character of the distributions you received. The eREITTM who sent you a distribution is identified in the box in the top-left of the form.
Your Form 1099-DIV may show an account or other unique, identifying number that we have assigned to you to distinguish your account from other investors in our internal records.
For your protection, the Form 1099-DIV we send to you may only show the last four digits of your social security number (SSN), individual taxpayer identification number (ITIN) or adoption taxpayer identification number (ATIN). However, we are required to report your complete identification number to the IRS and, where applicable, to state and/or local governments.
Your Form 1099-DIV shows your ordinary dividends in Box 1a, capital gains distributions in Box 2a and non-dividend distributions in box 3.
Each year, we are required to report to you the tax character of distributions paid to you, which is determined by comparing the amount of distributions paid by the eREIT™ with the eREIT’s™ earnings and profits for a given year. The eREIT’s™ calculated current and accumulated earnings and profits is the result of a tax calculation, which often differs from the eREIT’s™ profits calculated in accordance with generally accepted accounting principles and presented to you in such eREIT’s™ Annual Report on Form 1-K each year.
In the event that any portion of distributions paid to you exceeds earnings and profits in a given year for the eREIT™, it is treated as a nondividend distribution, also referred to as a return of capital. Distributions that do not exceed the calculated current and accumulated earnings and profits are reflected as either an ordinary dividend or a capital gain distribution depending on the eREIT’s™ disposition activity related to real estate properties during the year. In general, ordinary and capital gain distributions are taxed currently; non-dividend distributions, or returns of capital, reduce cost basis or the original purchase value of your shares. In the event returns of capital received exceed your original cost basis, then the excess is recognized as a capital gain for the year in which it is received. Therefore, you should generally adjust the cost basis of your investment each year based on the amount shown in Box 3 “non-dividend distributions” on your Form 1099-DIV. By tracking adjustments to your cost basis each year, you will be able to properly report any gain or loss you experience on the disposition or redemption of your shares.
When you sell your shares, the difference between your adjusted cost basis and final net sale price will be taxable as a capital gain or loss on your tax return. Keeping track of your adjusted cost basis each year will be helpful when you finally sell your investment. Please consult your tax advisor if you have any questions or need assistance with the calculation of your cost basis, or if you have other questions regarding your reporting of distributions that you received.
Any corporation (or entity that is taxed like a corporation, including our eREITs™), that undergoes a stock split or a merger, pays a stock dividend, pays a “return of capital” distribution (i.e., a distribution exceeding current and accumulated earnings and profits), or otherwise undertakes an “organizational action” is required to either (i) file Form 8937 with the IRS and send copies to its shareholders or (ii) make the required information publicly available on its website. To the extent none of the above described organizational actions are taken, no Form 8937 is required. You can find any Forms 8937 that have been prepared by our eREITs™, if any, on our website at www.fundrise.com.
A qualified dividend is a type of dividend which may be subject to preferential tax rates, which are usually lower than regular income tax rates. Non-qualified, ordinary dividends are taxed at the normal rate based on the individual’s ordinary income. Based on the historical operations of the eREITs™ and how we expect them to operate in the future, we do not expect most dividends that are issued by the eREITs™will be qualified. However, to the extent that the eREITs™ do pay qualified dividends, they will report them as such in Box 1B.
Brokers and barter exchanges must report proceeds from transactions to you and the IRS on Form 1099-B. Based on the reporting you receive on Form 1099-B, you may be required to recognize gain from the receipt of cash, stock or other property that you received in an exchange.
As a result of the redemption plan of each eREIT™, designed to provide you with regular, quarterly liquidity, we are required to report proceeds that we distribute to you in redemption of your shares to you and the IRS on Form 1099-B. If you received a Form 1099-B from us, it is likely because you received proceeds from a Fundrise eREIT™ from a partial or full redemption of your shares. You may be required to recognize gain from the receipt of cash, stock or other property that was received by you in exchange for eREIT™shares. The eREIT™that redeemed your shares in this type of transaction is identified in the box in the top-left of the form.
For your protection, the Form 1099-B we send to you may only show the last four digits of your social security number (SSN), individual taxpayer identification number (ITIN) or adoption taxpayer identification number (ATIN). However, we are required to report your complete identification number to the IRS and, where applicable, to state and/or local governments.
Your Form 1099-B may show an account or other unique, identifying number that we have assigned to you to distinguish your account from other investors in our internal records.
Box 1a shows a brief description of the item for which the proceeds from one of your investments are being reported. If you received proceeds from transactions that must be reported on Form 1099-B from multiple eREITs™, you will receive separate forms for each eREIT™.
Box 1b shows the date that you acquired the securities which related to the transaction being reported. Box 1b may list “VARIOUS” if you received proceeds relating to shares that you purchased on multiple dates that were redeemed during the tax year.
Box 1c shows the effective date of the exchange being reported. This box may show “VARIOUS” if your Form 1099-B is reporting multiple exchanges in aggregate.
Box 1d shows the aggregate cash proceeds from transactions involving stocks, bonds, other debt obligations or equity instruments. This amount is generally reported on Form 8949 as explained in the instructions for Schedule D (Form 1040).
Box 1e shows the cost or other tax basis of the securities sold or redeemed. Please see the Schedule D (Form 1040) instructions or Publication 550 for details about basis.
Box 2 shows whether the proceeds you received should be reported as short-term gain or loss, long-term gain or loss, or ordinary income. If you received proceeds from an eREIT™ that would be split between short-term and long-term gain and loss based on the length of time you held your shares, you will receive multiple Forms 1099-B from your investments.
Box 3 is checked when we have reported or will report your basis to the IRS.
Our technology-driven approach and discretionary balance sheet funds enable us to provide fast and flexible capital solutions.
More on the process of how real estate companies use Fundrise can be found here.
We look for high-quality, experienced developers with an established track record who are active in their target markets and are closing on multiple transactions a year.
Investments sold through the Fundrise platform are real investments. All income must be reported to the Internal Revenue Service. As a result, we are required to obtain your social security number and date of birth.
Fundrise uses bank-level security for investor’s protection. Investor information is encrypted with an AES bit symmetric key, the same as level as the largest commercial banks. Each investor’s connection to Fundrise is always encrypted over HTTPS with Transport Layer Security (TLS). Fundrise applications and data are physically located in multiple secure data centers. We utilize Amazon Web Services for our hosting which is compliant with numerous security certifications.