Podcast Summary: Alternative Investing With Fundrise CEO Ben Miller

Episode: Alternative Investing With Fundrise CEO Ben Miller
Release Date: February 21, 2025
Host: Jill Schlesinger
Guest: Ben Miller, Co-founder and CEO of Fundrise

Introduction

In this episode of Jill on Money, host Jill Schlesinger welcomes Ben Miller, the co-founder and CEO of Fundrise, a leading real estate investment platform. The discussion delves into the intricacies of alternative investing, specifically focusing on how Fundrise leverages technology to democratize real estate and venture investments, making them accessible to everyday investors.

Fundrise: Democratizing Real Estate Investment

Ben Miller opens the conversation by explaining Fundrise's core mission:

“Our mission has been to tear down the barrier that exists between the best investments and normal people who normally don't get access to these companies.” (07:51)

Fundrise is portrayed as a hybrid of a tech and real estate firm, managing a diverse portfolio that includes thousands of single-family homes in the Sun Belt and millions of square feet of industrial facilities fueled by the e-commerce boom. Ben emphasizes the platform's accessibility, allowing individuals to start investing with as little as $10.

Lowering Barriers Through Technology

Jill inquires about the technological aspect of Fundrise:

“We have a web platform, a mobile platform, APIs and data engineering.” (07:51)

Ben highlights that technology is pivotal in managing vast numbers of small investments efficiently, something traditionally unfeasible without advanced software solutions. This technological backbone enables Fundrise to process billions in transactions, far surpassing what manual methods could handle.

Comparison with Traditional Real Estate Investments

Jill draws a comparison between Fundrise and traditional real estate investment vehicles like the Vanguard Real Estate ETF, questioning the cost differences:

“Our total fees are 85 bips a year, which is probably about the same as the public markets. It's not once you add up the REIT, the REIT costs.” (13:05)

Ben clarifies that while Fundrise's fees are competitive, they offer more than just a passive investment vehicle. Unlike Vanguard, Fundrise actively manages and operates real estate assets, providing a more direct and diversified investment approach.

Ben Miller’s Background and Motivation

Transitioning to a more personal narrative, Jill asks Ben about his journey:

“My whole worldview is just informed by living through these bubbles and the aftermath.” (19:07)

Ben recounts his early ventures into real estate and technology, shaped by the tumultuous periods of the late '90s and post-2008 financial crisis. These experiences instilled in him a sense of skepticism towards traditional investment systems and fueled his passion for creating a platform like Fundrise that offers tangible, real asset investments to the masses.

Navigating Real Estate Cycles and Market Trends

The conversation shifts to current real estate market dynamics. Ben discusses the impact of high interest rates and technological advancements like AI on real estate:

“One of the things happening with high interest rates is it's shutting down new construction.” (32:24)

He elaborates on how Fundrise strategically adapts to these changes, focusing on residential investments in burgeoning areas like Texas and Florida, which have historically benefited from strong population growth driven by factors like immigration.

The Office Real Estate Conundrum

Jill probes deeper into specific real estate sectors, such as office spaces, highlighting their recent decline:

“Every office building in the country is worth, like, is bankrupt, essentially.” (27:52)

Ben provides a nuanced analysis, explaining that while Fundrise doesn't heavily invest in office real estate, the sector's downturn reflects broader economic shifts and evolving work patterns post-COVID. He emphasizes the long-term nature of real estate investments, contrasting it with the volatile, day-to-day fluctuations seen in stock markets.

Challenges and Future Outlook

Ben candidly discusses the uncertainties facing Fundrise amid fluctuating interest rates and geopolitical factors like immigration policies:

“We are in a really... period of high uncertainty, and that makes it really difficult for so many kinds of decisions I have to make at work.” (35:37)

He acknowledges the challenges in identifying profitable investment opportunities in the current climate but remains optimistic about Fundrise's ability to navigate through strategic adaptability and technological innovation.

Investor Insights and Testimonials

Jill shares a poignant anecdote about a young investor choosing to move funds from Fundrise to cryptocurrency due to perceived higher returns:

“I was going mostly in crypto. But now I'm going to redeem my money out of Fundrise and go 100% crypto.” (21:06)

Ben reflects on the feedback from investors, highlighting the importance of informed decision-making and the role Fundrise plays in providing sustainable, real asset investments versus the high-risk nature of cryptocurrencies.

Conclusion

The episode wraps up with Jill appreciating Ben's insights into alternative investing and Fundrise's role in making real estate investment more accessible and manageable for everyday investors. She encourages listeners to explore Fundrise’s offerings while reminding them to consider their individual risk tolerance and financial goals.

Key Takeaways:

• Accessibility: Fundrise lowers the entry barrier to real estate and venture investments through technology.
• Diversification: The platform offers a diversified portfolio across residential and industrial real estate in growth regions.
• Technology Integration: Advanced tech solutions enable efficient management of a large number of small investments.
• Market Adaptability: Fundrise adapts to changing market conditions, such as high interest rates and technological advancements, to sustain growth.
• Investor Education: Emphasizes the importance of informed investment decisions over speculative ventures like cryptocurrency.

For more information, listeners are encouraged to visit fundrise.com/jillonmoney and explore Fundrise’s investment opportunities.

Notable Quotes

• Ben Miller on Fundrise’s Mission:

  “Our mission has been to tear down the barrier that exists between the best investments and normal people who normally don't get access to these companies.” (07:51)

• Ben Miller on Technology’s Role:

  “We have a web platform, a mobile platform, APIs and data engineering.” (07:51)

• Ben Miller on Real Estate Cycles:

  “Real estate's a long-term business. People in the stock market are looking at things day to day, minute to minute.” (31:05)

• Ben Miller on Challenges:

  “We are in a really... period of high uncertainty, and that makes it really difficult for so many kinds of decisions I have to make at work.” (35:37)

Disclaimer: Investing involves risk, and it's essential to consider your individual financial situation before making investment decisions.