Fundrise's eREIT Sees 9.7% Annualized Return In Q1 (UPDATE: Fundrise CEO Comments)
Real estate crowdfunding firm Fundrise’s Income eREIT saw a 9.7% annualized return in Q1 ’16, the company said today, lending further street cred to the company’s crowdfunding model.
Returns like that help to explain fast-paced investment in the firm’s eREITs, with over 56,000 people expressing investment in the products—which have been selling out within minutes of their investment periods opening.
"We see the eREIT as an evolution in our business," Fundrise CEO Ben Miller says of the online investment vehicle. "It also means we can now fund deals with the same certainty and structure as traditional large investment funds but at a lower cost."
Fundrise’s success hasn’t been all sunshine though—the company recently fired its CFO, Michael S. McCord, who allegedly blackmailed the company for $1M. McCord says that the crowdfunding firm’s claims were baseless, and that the company is engaged in fraudulent deals.
Despite the trouble in crowdfunding paradise, the business model is catching fire in the real estate space, as even institutional investors partner with crowdfunding firms—raising questions over what really constitutes “the crowd.”