Forget Wall Street - this startup gives you the same investments at 1/100th of the cost

Watching the stock market these days is like riding a roller coaster. Except it isn't all fun and games - it's your hard earned money that's going for a ride.

In volatile markets like these, sophisticated high-net worth investors run for cover by sheltering their investments in stable assets like commercial real estate. And now that option is available to investors who don't have millions to spend.

Fundrise, a rapidly growing startup based in Washington, DC, has taken an innovative crowdfunding approach to commercial real estate investment, and it's finally opening the world of high-quality private real estate up to the masses.

"I think most people recognize that commercial real estate is something that every smart investor would want in their portfolio," says Brandon Jenkins, the company's chief operating officer. "The challenge has always been that unless you have $500k to invest with a private equity fund it simply isn't possible."

Fundrise has changed this dynamic. Driven by proprietary technology, its revolutionary online platform cuts down on inefficiencies inherent in the traditional Wall Street model and reduces costs, allowing individuals to invest at much smaller minimums and earn better returns.

Jenkins says many investors don't realize that real estate has actually outperformed Wall Street over the last 15 years. Meanwhile, financial experts like David Swensen, chief investment officer for Yale University and author of "Pioneering Portfolio Management," recommend placing approximately 20% of your investable funds into real estate for years.

"Commercial real estate as an asset class is uniquely well suited for investors who are looking for both annual cash returns, as well as long-term appreciation" states Jenkins.

Institutional Grade Underwriting

However, he notes that finding good investments isn't easy. Smart real estate investing requires in-depth market research, a detailed understanding of local demographic and economic trends, and extensive due diligence. "Fundrise leverages the power of the internet to provide individuals with the same institutional level of underwriting done by billion-dollar funds," says Jenkins.

He says the startup sees opportunity in high-growth cities like Denver, Los Angeles, Seattle, and Washington, DC. "There is a generational shift going on where both millennials who are starting their careers, and Baby Boomers who are downsizing, are moving to urban cores looking for a walkable 24/7 lifestyle."

Jenkins notes that the potential for rising interest rates has been a motivating factor for some investors. "I think most people agree that the Fed will likely raise rates in the next 6 to 9 months and there is some concern that we will see price inflation. Many of our investors are using commercial real estate as a hedge against potential inflation and an alternative to what may be a bull market that has finally peaked."

Fundrise envisions a new type of finance where investing in real estate is as common as owning stocks and bonds, where investors can shop an inventory of the best properties across the country without leaving the couch.

With growth of more than 1500% in the past year, that future doesn't seem so far away.

Learn how Fundrise is cutting investor fees by 90%.

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