Latest Fundrise Offering Nets More Than $100K in Two Hours

• March 27, 2014
• 5 Comments

by Lark Turner

1539 7th Street NW

Fundrise, the DC-based online platform that allows residents to invest in local real estate and businesses, had one of its most successful mornings yet on Wednesday, garnering more than $100,000 from more than 100 investors in just two hours, its cofounder Ben Miller told UrbanTurf.

The offering, which invited everyday investors to get a piece of a commercial property in Shaw that Fundrise hopes to turn into a restaurant, followed the company’s unusual model of allowing the public, and every investor, to see whom they’re investing with. The property is located at 1539 7th St NW (map).

As of 9:30 a.m. on Thursday, 165 investors had raised $138,000. Shares start at $100, and the project’s goal is $350,000. Once that amount is reached, Fundrise will begin the leasing process, which it estimates will take 6-9 months. The project is only open to investors from DC, Maryland and Virginia.

“It’s flying,” Miller told UrbanTurf. “Every time we do it, we get more money, faster, from more people. People are interested, they’re wondering. They want to see where it goes.”

Fundrise lays out how investors can make money through their investment:

Investors are projected to receive an 8% preferred return, paid quarterly, in Year 1 – 5. For example, if someone invested $100, they would receive $8 each year, paid out in $2 each quarter. The investment principal is projected to be returned to investors at the end of Year 5. If the sponsor elects not to return the principal, the preferred return for Year 6 will increase to 12%. If the sponsor elects not to return the principal at the end of Year 6, the preferred return will increase to 14% for Year 7, and 16% for Year 8 and each year going forward thereafter.

Fundrise has taken on residential projects too, including a 100-unit project at 3400 Georgia Avenue (map). That project also offered $100 shares, but unlike this project, set a minimum ceiling of $10,000 for investors, limiting it to more established parties.

This article originally published at http://dc.urbanturf.com/articles/blog/latest_fundrise_offering_nets_more_than_100k_in_two_hours/8285

5 Comments

1. Lisa said at 8:59 pm on Thursday March 27, 2014:
   I don't get this at all. So does 'get a piece' mean a portion of ownership of the building? What is the money 'invested' used for? "The Group" will begin the leasing process- who is the group? Who owns the building? Where are the returns coming from? To whom are you giving your money? "165 investors had raised…" do you mean "165 people had invested…"? Is Fundrise functioning as the property manager? Why don't the owners just lease out the building? " "...followed the company’s unusual model of allowing the public, and every investor, to see whom they’re investing with…" what does this mean?? These things are clearly not geared to people like me.

1. Pablo said at 11:49 pm on Thursday March 27, 2014:
   [This comment has been removed by the moderators due to its inappropriate nature.]

1. Judith said at 1:25 pm on Friday March 28, 2014:
   I taught at Shaw Junior High from 1963-72.I am not against so called,'progress.' If only we would provide more affordable housing. I don't mean just for those with incomes of $60,000-a year. I guess one has to make more to buy a 'starter house" in Shaw now - for $600,000.00.

1. 9th Street Neighbor said at 4:06 pm on Friday March 28, 2014:
   Without stronger consumer protections through clarified regulations, no informed consumer should provide money for this type of crowd sourcing. Financial return on investment -- or event return of the principal investment is not guaranteed.

1. Econ. 101 said at 3:26 pm on Saturday March 29, 2014:
   Concerned about housing prices in Shaw or any where else in the District, west of Anacostia? No need to worry. What goes up, must come down. Until then, accept the fact that price is set by supply and demand. If people couldn't afford to pay it, you would see more foreclosures... Which are at a minimum in Shaw.