Real estate crowdfunding platform Fundrise has introduced a second eREIT to their current offerings. The “Growth eREIT”, as one would expect, is intended to generate much higher returns at the end of the term. The current eREIT is an income generating vehicle and holds lower risk associated with the lower rate of return.
For the new Growth eREIT, Fundrise states they will pay a penalty of up to $500,000 if the investors earn less than a 20% annual rate of return. The Growth eREIT will also focus on equity investments but will still pay a quarterly dividend. In contrast to the Income eREIT that focuses on debt, during the first 2 years of the investment vehicle, an investor will pay nothing in asset management fees unless it generates a minimum 15% annual return.
Fundrise says the Income eREIT currently is over 80% subscribed with over 56,000 on the list to invest. Fundrise has been opening the window to subscriptions on a rolling basis. Participation is on a first come, first serve basis.
Fundrise recently revealed it had paused its original process of allowing investors the option to crowdfund single properties to focus on their eREIT product.
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