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Rich Habits Podcast
134: Exposing Wall Street's $1 Trillion Real Estate Blindspot w/ Ben Miller
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- [00:01]
Vanguard Narrator
You're about to make a trade. Which u do you listen to?
- [00:04]
Ben Miller
Is it get optioning those options or.
- [00:09]
Vanguard Narrator
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- [00:46]
Austin
Everyone and welcome back to the Rich Habits podcast, a top 10 business podcast on Spotify. Brought to you by Public.com Today's episode we are joined by Ben Miller, the CEO of fundrise with a vision to democratize real estate investing. Ben has absolutely transformed how everyday investors, including myself, for nearly a decade now access real estate opportunities. Under his leadership, fundrise has grown into a powerhouse, managing billions of assets and redefining the investment landscape. Join us as we explore Ben's journey from his early days as an entrepreneur to steering fundrise through a rapidly evolving market, as well as his perspective on the real estate market after Jerome Powell's recent remarks in Jackson Hole. Ben, welcome to the show.
- [01:32]
Ben Miller
Thanks for having me.
- [01:33]
Austin
Super excited you're here and let's just dig right into it. I made my first investment on fundrise after I saw you all mentioned on a Morning Brew advertisement back in I think it was like 2017, 2018. I was definitely still in college. Now I've been slowly but surely still dollar cost averaging and it's been an awesome journey so far to see how you all have evolved so much over time. But I'm very familiar with Fundrise. I know we've got some people though listening who might not be. So for those who are either new listeners or never heard of fundrise in the past, what is fundrise and why should people care?
- [02:06]
Ben Miller
So I co founded fundrise after the great financial crisis when everything went bad, stock market went bad, a lot of bad behavior was happening with banks and big institutions and I wanted to build some sort of alternative way to invest in real assets outside the system. At the Time this is 2012, no one had ever done that before. It was completely novel. People thought it was crazy. I went to the SEC and convinced them to allow us to do the first offering and what we did was democratize investing into real estate. My experience with real estate, big institutions can invest in apartment buildings and data centers and warehouses and that was sort of historically a great asset class and ordinary individual people couldn't. And it was mostly because of artificial barriers, regulatory barriers, and a technology that just hadn't caught up with allowing it to happen within low cost, really efficiently with a lot of transparency. So we built fundrise to do that. I basically think we succeeded at doing it. We sort of changed the way the industry thought about who should be able to invest. The norms have moved so much in the decade since I started the company. Now we're huge institutional investor back. We have loans from JP Morgan and Goldman Sachs and practically every lender in the country and manage billions of dollars and we have, you know, half a million investors.
- [03:33]
Robert
I would like to talk about walking us through the process of finding, acquiring and exiting these real estate opportunities. I've been in real estate for about 30 years and I talk all the time about how important it is to understand your buy box. So when you're looking to purchase real estate, what is Fundrise's current buy box and why have you chosen that specifically? Because, you know, there's a million ways to invest in real estate. Walk us through your buy box.
- [04:03]
Ben Miller
Yeah, our buy box has changed and it's probably changes every three to five years because the market changes. And so I always tell the team this and is that you have to think top down and then also bottom up. And it's funny, most people are actually only good at one or the other and they have extreme bias towards thinking bottom up or top down. So usually you need a team of people to do it. And so top down would be, you think about, so what are the major tailwinds in a sector? So real estate is a lever GDP play. So you're thinking, okay, where is the most GDP growth and in what sectors? And so what sectors might.
- [04:42]
Austin
Wait, wait, wait. That is a really good call out. I want you to explain that a little bit more a levered GDP play.
- [04:50]
Ben Miller
So, so, okay, GDP is, is, is form of growth, right? Growth. Let me do where first. I think it's easier for people to understand. So where would be okay, I want to invest in the United States. Maybe you thought 20 years ago China had more growth than the United States, so you'd want to be in a country with the most amount of growth. And then you say, okay, it's not just United States. Maybe it's California or maybe it's Florida. And it's not just Florida. Maybe it's Tampa versus Orlando. And it's not just Orlando, it's which, which neighborhood in Orlando and not just which neighborhoods, which city block. And so if the Country's going to grow 3% but Florida is going to grow 5% and Orlando is going to grow 8% and this neighborhood's going to grow 11% and the city block might grow 13%. So you're trying to really focus on where the most amount of growth is. And that's sort of half of it. The other half is sort of what sectors, you know, is it multifamily, is it going to grow because of residential? It's going to grow because of E commerce, because of you know, industrial is essentially levered growth on E commerce. So you sort of picking the most important things are picking these sort of two major drivers like what is the asset class and where is there going to be most growth in that asset class. So and, and that's what basically what we've been doing. That's really when you think about the high level, when you think about the buy box like right now it's data centers. We can talk about that later. But you, if you get those two things right, like you're, you have incredible head tailwinds. Incredible tailwinds. And if you get that wrong, like let's say you're in retail malls. The headwinds on malls because of E commerce were so enormous. So it really matters to get the where and the what right first.
- [06:26]
Austin
So let's talk about the where and the what right now. What is and where fundrise super excited about as it relates to deploying millions, if not hundreds of millions as I'm sure. I mean you guys have billions of dollars of assets under management, right? Multiple billions. Where are you all right now? Deploy, deploying capital actively. Maybe you've been doing this for the last year or two, but you very much plan to do this for the next year or two. What is that?
- [06:51]
Ben Miller
Yeah, I mean the two sectors and we can talk about which ones you're, we can talk about each if you like. The newest one has been data centers. And that's been really interesting. And then also, you know, we've been focused on and continue to be focused on residential build for rent in the Sun Belt. And so there's like, they're very different strategies, different macro trends. If you look at the country, population growth is very concentrated in only a few states. Some of the states are actually shrinking. Actually the majority of states are shrinking. They have less people every year. California, New York, they really have been declining populations. And so about 2 million people a year move or there's born migration. It all happens in the Sun Belt, all happens in prime, I mean vast Majority of top five growing states by total absolute number, Texas, Florida, North Carolina, South Carolina, Atlanta. And when people move to a place, you need more housing, you need more retail, there's more jobs, those people drive, more services. I mean, it's a virtuous cycle. And so that's been like a trend we've been actually on since 2015. We really shifted the Sunbelt 10 years ago. It's still true. That is been like the where and then the what. We shifted from multifamily to build to rent, which is like a new asset class, which is that you're building houses or housing communities of 100 to 200 homes with like amenities like fitness centers and pools and things like that, because work from home and I think driverless cars are going to allow people to live further away from home and they're going to want a house with backyard and more space and more light. And so shifting from an urban infill apartment to a house is I think like kind of another mega trend. So we've been buying and building build to rent communities for the last four or five years. We're one of the biggest in the country actually. And I think that's a great, great, great mega trend. I think it's only going to get stronger as technology basically makes it easier for people to live wherever they want.
- [09:06]
Austin
So what you're telling me is that fundrise, this massive real estate entity, is investing in data centers, obviously because of artificial intelligence and all the tailwinds that come with that. But you're also investing into these residential built for rent type communities where I would imagine a couple hundred homes are built and they are specifically built to be rented out to people on a monthly basis, not to be purchased, but people that maybe were living in a downtown area that want to, you know, have a little bit of a backyard, perhaps have a little bit of a pool or something of that nature, away from the hyper congested areas that are the downtown Nashvilles. For example, where, where I'm from, I live here in Nashville. I think I've actually seen a couple of these communities pop up even just around me. And it's, it's really interesting because not only do they get built very quickly, but you see people dive into them really quickly. I mean, you can see a community built entirely in a year and a half or two years. And then just a couple months after these homes start getting built, you see kids playing around in the backyard and they're in the swimming pools and I mean people are living there. So that is so interesting. That you guys are betting on this long term trend of these build for rent and then also the data centers.
- [10:17]
Ben Miller
One of the big differences, just to give you a sense of why it's a superior product, because one of the things I've learned because I was a real estate developer built housing, is that the financial return of a real estate asset is a derivative of the consumer experience of the product, right? If you have a better product like an iPhone, iPhone's better than a Motorola, like a build to rent is better than an apartment, it's a better product. And so in a typical apartment, 20, 25% of people have a dog. A lot of apartments don't allow dogs. It's small, it's hard to walk them. In our built to rent communities, 70% of people have a dog, right? It's those really small amenities. But like to have a dog is such a, I mean it's life changing. I mean it's so fabulous, right? There's so many examples of that, why it's a better product. And it didn't exist literally when we were first building it. No one on the Internet was looking for a house to rent in a community just didn't exist. Like, we had to educate people. And like now it's. People prefer not just to live in a house to rent, but they want one with amenities like, oh, I'd rather live in this one that has like somebody who does all the landscaping for me and somebody who, well, you know, pick up my Amazon. I mean, there's just the amenities are something that people don't really appreciate in a house. In a house, like I don't have to worry about any kind of fixing anything. If I say there's something that needs to be fixed or broken, literally there's a guy on the, who lives on the community who is there in 20 minutes to fix anything that's going wrong. I mean, it's such a better product experience than owning a house or renting a house. And so, I mean, look, owning house is great, but this is like a really superior way of, of real estate. And as a result, it's just like once people, all kinds of people, boomers who've sold their house and want to, want to live in a house, but they don't want to own a house. They don't want to deal with anything anymore. Anybody who's old enough to have owned a house for a few decades, there's no more romance in it. It's just like maintenance and pain and they, they want to take the equity out of the house they own. So there's a, it's a, it's not just young people moving there. It's really diverse communities. It's 53% women because I think women feel safer. So there's a lot of reasons why it's a better product. I don't know if we invented it, but we were like an early originator of it. And this is the whole thing with real estate is every decade like new asset classes get created. People think of suburban office campuses were invented in the 70s and 80s and they were hot and they made a lot of money. Malls were invented. I literally know the people who invented malls. My dad used to build malls. Now they're dead, right? So, you know, different asset classes get created. Last decade, single family rentals were created by Blackstone Invitation homes. This decade build to rent and data centers are going to be kind of recreated as real estate asset classes. And you make a lot of money in real estate by being part of a sort of a new, just like tech, by being part of this new thing that gets invented, gets institutionalized and then you sell it and you move to the next wave.
- [13:18]
Austin
Now, before we ask Ben our next question, I think it's really important that we make sure everyone understands this reality. Investing toward your financial future is the only way you'll ever be able to retire, period. So if you want to stop trading time for Money in your 9 to 5 or your hourly job, you need a nest egg that's growing for you over time.
- [13:39]
Robert
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- [14:02]
Austin
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- [14:24]
Robert
That's right. Fund your account in five minutes or less. Head to public.com rich habits to claim your 1% match today. Paid for by Public Investing. Full disclosures in the podcast description. So my next question is every quarter you're publishing these sort of letters to shareholders where you share your perspective on the real estate market as a Whole and how you and your team are executing upon the goals you've laid out for yourselves. Why did you start sharing these and what did you most recently report about? And did you mention in this report how AI is related and how it makes things better or helps you advance further in your efforts using AI?
- [15:07]
Ben Miller
Okay, well, there's two different questions there. Let me take them in. Train. So the investor letters, we started writing because we had sort of strong points of view about. About the market, about the world, and we didn't really feel like investors. We wanted a way to tell investors what we thought because in part of what people are doing, investing in our strategy, we also found that there's a big gap, an education gap, between institutional investor and a normal individual investing $5,000. And so investor education, trying to bridge this gap between these two worlds was part of the reason we started writing these letters. They're really fun to write. This is the problem AI is that writing is thinking. And so you, you. A lot of times my thinking, I mean, it definitely always gets tighter. It coalesces when I write, when I'm. When I'm forced to sit down and say, okay, what do I actually think about this thing or this, about the state of the world? And so it's one of my favorite things we get to do, is write, write these letters. The hardest time is when I just don't know what. Like, especially since COVID there's been periods where I'm like, I don't know what the hell's happening in the world today. I don't know what I'm going to say. Things don't make any sense. But usually it's just like, it feels like a really. A fabulous opportunity to sit down and try to say something that matters.
- [16:28]
Robert
Yeah, I love that because we do this podcast three days a week, and we have tens and tens of thousands of people that look to us for guidance very similarly to what you do with the newsletter for your audience. So I love that because I think even if you don't know what to say, it's still important to tell people, hey, there's a lot of confusion out there. I'm not really sure the team is working towards what's next. Here's my thoughts, and let's keep rocking and rolling. And that's what Austin and I, I think, do really well within the podcast. And our network is just really trying to break it down off the dome of what we think, not what others think, because we don't care. It's about what we think is next. For our audience and our investing our own money. So I love that from you and how it relates to the investor newsletter.
- [17:15]
Austin
And beyond that here. Right. So what did you speak about in your most recent investor update and how have you noticed? Maybe the answer here is data centers, but how has the rise of artificial intelligence impacted the way that fundrise is investing?
- [17:30]
Ben Miller
Keep asking these two part questions and so I'm end up answering the first one and then we don't get to the second one. So the real estate market has been in a recession for the last three years. This is part of the new world we live in where there's so many cross currents. And so currently real estate is in probably like it's the worst period since 2010. 9, 10. So when the Federal Reserve raised interest rates from 0.25% to I think 5.35% or something like that, 5.5%, they just cratered real estate. And that happened September 2022. The stock market cratered. Everything cratered. Honestly, everything had collapsed when, when that happened. And then what happened is AI rebirthed the stock market and the stock market recovered in 2023 and real estate stayed in a recession. I think we're now on in an inflection point because the Federal Reserve is, it has, has signaled they're going to start dropping rates again and we can talk about that. But that's been what I've been. I mean it's been confusing to investors that real estate's done badly while the stock market's done well. I think that's been a really big source of confusion for investors because not like they unders, you know, they live the multifamily or industrial markets, understand what's happening like on the institutional side. But that's the sort of the dichotomy between AI and a lot of mainstream markets like Main street has not been doing as well as sort of Wall street in the last few years.
- [19:13]
Austin
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- [19:50]
Robert
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- [20:37]
Austin
Services LLC and major shout out to Spyi, BNDI and CSHI for their recent 3 year anniversary. 3 years now trading on the markets, earning monthly income for their investors. That's so exciting. And their entire suite of ETFs has officially surpassed $10 billion. Absolutely insane. Super excited for NEOS funds. Let's jump back to our interview. Ben, I'm glad you brought that up because I want to talk about what Jerome Powell is doing right so the Fed hiked rates to your point at the fastest pace in 40 years starting in March of 2022 and they just let it rip. They just from to your point, what was it? 25 bips up to 5%? I mean, it was fast, but just the other week Jerome Powell took the stage in Jackson Hole and announced his sort of flip flop on the dual inflation versus employment mandate. For the last few years, the Fed has been laser focused on bringing down inflation and they've done a pretty good job of it. But we've seen it kind of re accelerate from a core inflation perspective as of late. However, they're now instead laser focused on ensuring that the unemployment rate stays as low as possible. They're favoring employment over inflation. This means rate cuts and a positioning shift are coming in my humble opinion. So with this major policy shift that we could be seeing in starting in September and very well taking shape for the rest of 2025 and into 2026. What does that mean for Fundrise? How are you guys now perhaps maybe refinancing existing properties, you're going to get more aggressive when it comes to buying or building some real estate. How are you guys taking this as a tailwind and turning it into something that you can build upon?
- [22:19]
Ben Miller
It seems very likely that we're going to see rates fall and continue to fall from the Safe they're currently 4.3, they probably end 100 basis points less 3.3 a year from now, maybe go to 2.3 a year after that. But I just, I want to make sure I put a caveat. It's complicated. The world today has got a lot of cross currents. It seems unclear what's happening with the economy at the moment. There's again, these cross currents. You see a lot of softening. The job market, it's definitely softened, but prices are up. If you're the Fed, I think you're in a difficult place because you have this softening economy and rising prices that are arguably inflationary. And so the political pressure they're under, I think they will lower rates. And I think that's going to be right. But I definitely wouldn't, I'm not at 100% on that conviction. I just think it's complicated because of the rising prices now. Sorry, I just want to stay on the Fed thing for a minute before we talk about the consequences to fundraise. Let's say my 80% worldview on this is that the inflation we're seeing because of tariffs are not the same kind of inflation we saw from COVID Covid was very different. Covid had two major or three major drivers. One is they printed trillions of dollars and handed it out to people. Two, demand was extremely artificially managed through lockdowns and it shifted from services from, from goods to services in ways that caused supply to get extremely wonky. And then lastly, supply chains were hugely disrupted and all of those things caused prices to go crazy. That is totally different. What's happening with tariffs. Having the tariffs, I think is actually a lot simpler, but a consensus hasn't yet been established. And my analogy is if the government passed a 5% sales tax, everything would get 5% more expensive. But is that inflationary? And I think that's not as clear to me because obviously 5% higher costs because of 5% higher sales tax would, would rise prices, but also would raise taxes and be, and be deflationary because it's a tax on consumption. And so I don't, it's not. I think we'll look back three to five years from now and have a different view of exactly what tariffs are doing. I don't think it's, it's as, quote, inflationary as the last inflationary burst we saw. But nevertheless, at the moment, the Fed's going to have to make a decision about rates. And I think they're going to cut. I think they're going to continue to Cut. And I think they're going to need to because I think that the economy is softening and I don't think that actually 100 basis points from 4.3 to 3.3 is really going to matter that much to inflation and it may not even matter that much to the real economy because the Fed is just less impactful, less important than it used to be. 1970s when everybody talks about inflation and Volcker. So, so this is a context that is complicated, it's uncertain. And I think it's actually like maybe not as important as everybody thinks it is, except for real estate where I think real estate is a lever gdp and if as leverage gets cheaper, real estate gets more valuable. And so I, I think real estate's going to come out of its recession. Robert, you're, you're sort of like have a longer history than, than probably most your listeners. Like are we coming out of the early 90s SNL crisis? Are we coming out of the 2001s where we're going in where we're coming into like some kind of real estate boom. That's kind of what I think's happening where. Or even early 80s where it's Reagan. I mean I don't have. Everybody's got their political lens here, but I do think we're coming out of recession. I think real estate is going to do much better, but it's going to go boom. Or is it going to do. There's like a spectrum of like, is it going to like going to be like the 2000s or is it going to be like the 90s? That I think is contingent on lots of events that are going to flow from the next few years.
- [26:17]
Austin
I largely agree with what you said, Ben. Right. So you're pretty much saying that the inflation that we experienced during COVID was very much artificial. Right. We locked down, we had supply chain issues. Demand was going crazy.
- [26:29]
Ben Miller
Printed money, printed money.
- [26:31]
Austin
I mean dude, even I was getting stimmy checks. Like that's crazy. So all this money was, was essentially free. So people went and they spent it. All that fun stuff that caused red hot inflation. But now as we think about these tariffs and I think Jerome Powell would even agree with what you were saying is sort of transitory. Right. Thinking about inflation as yes, we have higher prices, but we also have this deflation and the consumer spending impact. It's not as black and white as it was before. And I think that if we did begin to cut interest rates in September, that that would be a good move because we saw what happened With May and June's job report brought down by, I think was 258,000 jobs that just weren't in existence. Right. Got revised lower over two months. That is material, right? That is very material. And so I think it's the Fed's duty to put employment before what could be inflation at the moment. And to your point. Yeah, I think, you know, fast forward three, four, five years, we'll look back on this and say, okay, maybe it wasn't what we thought it was.
- [27:26]
Ben Miller
Yeah.
- [27:27]
Robert
And I've got two takeaways that I want to add in and piggyback off of. Ben, I think 100%, you and the team at fundrise is spot on with the build for rent communities because right now the whole narrative for the last two, three years is that it's a renter's market. It's cheaper to rent than it is to buy in. The numbers back that up. But then the flip side of that, for someone like me who's been in real estate for 30 years, everyone's been questioning for months and months, why are you buying so much real estate right now? Because I've been buying a lot of single family homes because I believe for the long term the appreciation will be there. But also because it's a renter's market, I can either flip the house or make it a long term rental and either way I win. So I think you're spot on. And that is just where the numbers lie. But I do agree with you that we are going to see a real estate boom. But where I think people are wrong, everyone is sitting on the sidelines saying they're going to wait for rates to come down. The problem with that thesis is when rates come down, just like 20, 21, 2022, it becomes a seller's market, not a buyer's market. And then everyone is in this race to buy that specific property. They're going to pay 50, 100, 150,000 more than they would pay for that same property right now. We've seen that all over Florida where a house from two years ago that was 800,000 is now 650. And people still want to wait and see on rates. Rates could take two more years before they come down a lot. And I think people are making a mistake by waiting. And so, Ben, I feel like you have a front row seat to the future of real estate considering the billions you have in assets under management and the hundreds of assets you already own. So walk our audience through. What are you most excited about in real estate and Is there anything that the average person themselves can do relative to your big ideas?
- [29:22]
Ben Miller
Well, I mean, I'm most excited about AI. It seems a bit tangential to real estate on at first blush, but this is a mistake people in real estate made over and over again. I mean, I was literally like, my father built malls in the 80s and 90s, and no one who built malls thought that Internet mattered to them. Right? I mean, now it's obvious that E commerce destroyed malls and industrial was like the least sexy thing in the world. And because E commerce drove so much, I mean, you have to. You replaced every three square feet of retail you got rid of. You had to replace with one square foot of industrial because you had to get those, those goods to people's houses. And then work from home shifted people from the office to their house and that drove huge amount of demand for housing, more space, different kind of housing commutes. And so once again, we're on the cusp of a huge technological revolution. And I think AI is. I mean, I know AI is because I'm up to my elbows in it and there's just so many different ways to play it that it's like, you know, you could have a whole podcast series about, you know, how it's going to reshape every single thing you do. And it's funny because I find that most people have. It makes them really anxious. They're worried that it's going to get rid of their job. Most people aren't using, you know, chatgpt or Anthropic like every day. But it's like an opportunity. It's a threat and an opportunity and it's going to reshape real estate. So two, two or three examples of. So we for the last few years have been building, rebuilding all of our operations around software and AI. We have, the team has a hundred software engineers and we've been, you know, we shifted to rebuilding everything with software. And you'll see we'll have some things to debut in a few weeks. Radical change. I mean, such. I mean, we're going to blow the real estate industry's mind. When they see what we've built. They've never seen anything like it. I mean, it's incredible. I could talk about that. I come back. Once you guys see it, you're going. It's going to blow your mind.
- [31:24]
Austin
So we're having Ben back on the show here. Everyone's minds get blown.
- [31:28]
Ben Miller
Yeah, you're gonna see, you're gonna see this thing. Robert real estate guy Ben 2.0 I can't wait.
- [31:33]
Robert
Because we love being the guys that are ahead of the curve and bringing all the best information. That's why we enjoy having people like you on the show. So this is exciting. We'll definitely have to have you back once our minds are blown.
- [31:46]
Ben Miller
It's so exciting. I mean, it's so exciting because it's like, I think I'm, I'm an AI optimist. I think it's gonna, you're gonna shed most of the crappy work to the AI and keep, keep most of the good work to your to people. Because AI is not going to replace people. It's going to augment people. Then in terms of real estate investing, that's why I think it's the 90s again. Internet drove productivity, computers drove productivity, computers drove all sorts of positive computers. I mean, people think of computers, take it for granted, but like computers didn't really exist in the office until the late 80s. You know, most people who are like, my dad's age, I mean, didn't even. He never used Excel spreadsheet, doesn't know anything about it. So AI is going to be like, that's going to drive so much growth. Growth is good for real estate. It's good for certain, especially cities that are part of that technological trend. And then the heart of it all is data centers for real estate. And we've been investing in data centers. And what's interesting about data centers is that I think they're mispriced. I mean, it's. Most people can't pub. The two public data center REITs are not what I'm talking about and I'm not recommending them. They're actually like, I think they're in trouble when you talk about why they're in trouble. But an AI data center is something totally different and they're totally mispriced. And we've been investing in them and it's been phenomenal. And I can sort of walk through that. But up and down, anything that AI touches, I think second order and for shorter consequences are going to be phenomenal.
- [33:11]
Austin
Can you explain how they're mispriced?
- [33:13]
Ben Miller
When a new asset class gets created, money doesn't know how to price it. They don't know how to price it. And the way that like everything's always priced is on historical performance. And when something's new, they have no historical performance. And so they put a premium risk premium on it because they sort of, they say like, oh, some things like it's uncertain is risky, which is funny. Because the tech people, old things are risky and new things are rewarded. But in real estate and finance and securitization markets, it's always the opposite. So data centers that we're talking about, which is, it's a mistake. There's three kinds of data centers. There were data centers built for telephones, there's data centers built for Internet, there's data centers built for clouds, and there's data center built for AI. And so it's just a mistake to think of them all as one. They're super different. They're absolutely unrelated. A data center built for a cloud might need to have 10 megawatts and be 500,000 square feet. And a data center built for AI is going to be a couple million square feet and be 300 megawatts a gigawatt. Totally different infrastructure, totally different power heating, totally different cooling, totally different. Everything, everything's different. There's nothing. They're unrelated. They're just both called data centers. And so the market basically is pricing them as if they're super risky. But underneath of them, if you can get at the right ones, you're like, you have a Microsoft lease, you have a Meta lease, you have a Google lease, you're like, okay, so there's a AAA rated lease underneath of this thing. It cost them $3 billion to build it. It's in Infill Atlanta. I can get a levered 1520 on like triple B rated paper or something. I'm being a little technical. Like that's insane. Like you to buy Microsoft's corporate credit you'll get like a four. But if you buy that through a data center you can get a 15 or 20. I mean it's just, just it's, it's so mispriced. I usually don't like talk about it, but Wall street people, you know, aren't going to be listening to us people. Real estate people are worried is a bubble and tech people are worried that it's like a, a desert, it's total scarcity.
- [35:22]
Robert
Now before we ask Ben our last question, let's hear from our sponsor, Blossom Investors. Have you been itching for some in person events? Well, you're in luck. Our awesome partners over at Blossom Social are hosting their third annual Investor Social tour where hundreds of DIY investors across North America meet up in person for an evening of food, drinks, networking, education and fun.
- [35:46]
Austin
And they'll be hitting seven cities this year on the tour. That includes Los Angeles, Vancouver, Calgary, Chicago and Montreal and Toronto. That'll be hosted at the Rogers center, which is where the Blue Jays play. And in New York, it's going to be hosted at the NASDAQ center in Times Square. We all know what the Nasdaq does. That's pretty exciting.
- [36:06]
Robert
You guys know how much we love Blossom as an online social network and they're all about connecting investors online. Well, now's your chance to see what the community is all about in real life at these events.
- [36:18]
Austin
They've even hooked up our listeners with an exclusive 15% off coupon. So use coupon code RICH HABITS15 at checkout. There's a link in the show Notes below or visit blossomsocial.com 2025Investor Tour Robert, are we going, should we go to this tour? Sounds like fun.
- [36:38]
Robert
We definitely got to hit a couple of the cities. So we'll keep you guys posted of when we're going to be and where and we'll see you there.
- [36:45]
Austin
All right, back to our interview with Ben. That's fascinating. And I want to keep going on this because our next question is more around like the private credit side and the venture investing that you guys are doing. So like the way you're talking makes me think that, you know, with the lease, I mean, is this some sort of, you know, private credit arbitrage that you guys are sort of seeing right now? How are, you know, walk us through how fundrise has diversified away from in the beginning. Congrats, you're an investor into an apartment, into now these, you know, triple B rated tranches or what, whatever the heck's going on here behind the scenes.
- [37:19]
Ben Miller
Yeah. So we transitioned to private credit or added to private credit when interest rates went up. Actually at first the best thing to invest in was, was credit because high rates, you know, you could just get really high yields. And we shifted in, in September 2022 to start buying credit and it was phenomenal. I could talk about that. And then we, and then we expanded into venture capital. It's so valuable for so many reasons, like just a few. One is that it gives you much deeper understanding of like, I understand real estate better by understanding credit better. I understand real estate better by understanding tech. They're less correlated. So like real estate's down, but tech is up. So I think our investors are better off with a diversified portfolio. Neither one you can really get access to. I mean, to invest in asset Backed Secur data center, you have to have $100 million of liquid securities, not net worth liquid securities. Like it's a quib, a qualified institutional buyer. So it's like a really high standard to access it, but it's been phenomenal. And then obviously our venture fund, our initiative into tech, we created another market. I mean there was no such thing as a public venture fund that anybody could invest in before us. We went to the sec, took us two years to convince them. And now, I mean it's going to be, it's going to become a sector, like it's going to become a thing 10 years from now, 20 years from now, like it'll just become normal, like an etf, like a mutual fund. And we, we ended up building a portfolio that is like, I mean, world class, like the majority of the top 10 private companies in the world. Since it's just, it blows my mind.
- [38:49]
Austin
It's exciting. It's certainly exciting. And you are. I mean, I've got some equity in the venture portfolio that you guys have built. I think Service Titan was a recent major winner for you guys when they IPO'd. So it's, it's really cool to see that you guys are democratizing this asset class to the masses.
- [39:04]
Ben Miller
When I first announced it, we got a lot of skepticism and I was trying to explain to people, you know, fundrise has millions of customers. We have, we've built mobile apps, we build websites, we built, we had all the APIs, all, all of the backend servicing. We had, we had. Our marketing budget, digital marketing budget was in the tens of millions. We really understand the tech and we've been building with AI and so like how we got some of these great companies is we were a customer of. I think it's only like 80% of the companies we invest in were a customer of. We would go to them, say, hey, we're customer with. Can I talk to the cfo, CEO? Of course, you know, you're a big customer, seven figure customer sometimes. Right. It's how we got to, to conviction on some of the technology. Is this technology like a great technology? And so we understood the tech in a way that I think that our customers didn't appreciate. And also venture people, I don't know how many venture people you have. They're not as technical as you might imagine. Not all of them are software engineers. They're mostly finance people. Nothing wrong with finance people, but they don't got anything on us when it comes to technical understanding of, of the products. Yeah, I mean we were lucky. I remember delaying the launch of the venture fund so that we didn't launch it at the top of the tech market, we launched it at the bottom of the tech market. There was some luck and some restraint on our part. And we just bought and invested in. We got the names, we got the best companies, and I think that the best tech companies in the world, the best investors in the world today, I mean, hands down.
- [40:41]
Robert
Well, Ben, we appreciate you stopping by. We have been sharing fundrise with our audience for a very long time. We love it. We invest alongside you guys, and we just really appreciate you coming on the show, enlightening our listeners, keeping them updated, and really just giving us all your best stuff. So we really appreciate having you on, and we look forward to getting our minds blown and having you on for 2.0 once you do the other launch. So, again, thank you for stopping by.
- [41:09]
Ben Miller
Yeah, thanks for having me.
- [41:10]
Austin
And if you want to learn more about fundrise and all the fun things they're investing inside of, and of course, Robert and I are massive believers in this platform, go check out funrise.com. as always, Ben, thank you so much for hanging out with us. Can't wait to have you back. And this was great.
- [41:24]
Ben Miller
It was great.
- [41:25]
Austin
What an insightful conversation with Ben. I feel like I do. We have these guests. If it's Reed, if it's Ben, if it's Harley, if it's whomever else, Candace. We have these awesome guests that come and join us from all these really interesting platforms, and they're able to give us the insights. I mean, Ben has billions of dollars of assets under management at Fundrise. Like what he was talking about with how the. The paper is, you know, priced differently with the AI data center versus, like, that stuff is so cool to learn about. Count me in. And their venture capital firm. I mean, the guy's got an insane portfolio with OpenAI and Anthropic and Databricks. All these companies have 2, 3, 4, 5X over the last 24 months. So they're building some really interesting stuff at fundrise, helping investors that are focused on alternative asset investing. If it's real estate or private credit or venture investing, I mean, they are knocking it out of the park.
- [42:16]
Robert
Yeah, I really enjoy it because I feel like we're giving our audience kind of the inside scoop on everything that's happening behind the scenes with these big companies. And it just really makes me feel so proud of what we've built with the Rich Habits podcast. And I love it because I learn from these guests every single, single day. And I've been in the real estate world for a long time, and so I just think it's phenomenal that we're able to get these types of guests and share all of their insights with our audience. So this was a really good one. And for any of you looking to learn more about private investing and real estate investing, this is an episode that you have to watch all the way through and make sure you share it with any friends in the real estate world because this is a game changer and we love fundrise and what a great episode.
- [43:02]
Austin
So with that being said, let's now jump to our Q A section of the episode. We got a couple questions coming in from Instagram specifically. I've just decided to take them all from over there. But don't worry, our email friends don't forget rich habits podcast gmail.com we definitely answer those as well. But we're giving some Instagram followers a little bit of love in this episode. We got three good ones teed up. Our first one coming from Carson. Carson says hey Robert Nosson. I'm 22 and I'm moving to Charlotte for work.
- [43:29]
Robert
Work.
- [43:29]
Austin
I'll be working at Vanguard group and making 48,000 a year. Rent is not cheap in Charlotte and I'll be paying about $1,400 a month. With that already being a big dent in my monthly budget. I just totaled my 2019 Honda Civic. I'm now in a really tough situation where I will need to get a car. What are your recommendations as far as vehicle selection and financing? Thank you Austin and Robert. You guys are the best. Robert, I'll let you kick this one off.
- [43:54]
Robert
I love this Carson and I would not sweat it one bit. Right now car dealership of all kinds are offering these incredible lease deals with zero money down, zero money up front and really cheap payments. Because after Covid auto manufacturers just made too many vehicles and right now dealerships are putting you in the driver's seat. Wink wink. Because there are so many good deals out there you can check out. Honda right now has some really, really good deals. Volkswagen, Toyota. I looked at a recent lease deal for someone I was helping. I would go lease something, get a three or four year lease, zero money down. Do 12,000 miles a year, maybe 15,000 and you'll be able to get a really cheap payment. Get a brand new car with full warranty and it'll be very little out of pocket. That's what I would do.
- [44:43]
Austin
I would do the opposite. I don't think you need to lease a vehicle making 48,000 a year at 22 years old already talking about how your rent is going to dent your monthly budget so much, I would one figure out exactly how much I'll get, get from my insurance. Maybe it is. Well, I looked up on grok here. Assuming your car is in decent shape, you should get 10, maybe $12,000 from your insurance. I would take that 10 to 12,000. I would go find another car exactly like the one you had. Maybe it has less miles, maybe it's another trim, maybe it's a different color, maybe it's got a different radio, whatever you're into. And I would just go buy another car just like you had. No car payment, make it easy, use that monthly car payment or what would have been a lease payment and invest that. There's no reason in my opinion for a 22 year old to be driving a brand new car.
- [45:28]
Robert
Well, there you go. Two sides of the fence, two different options. I think they're both great alternatives. So Carson, best of luck and keep us posted.
- [45:36]
Austin
So our next question comes from Mark S. Mark says I'm 45 and I have a five bedroom house worth 410,000. I also have a 401k. That's a traditional 401k. It's got $20,000 in it. I also have some cryptocurrency, a little bit of Bitcoin, about 4,000 worth. Now here's the kicker. I took out an HEI loan of $40,000 to pay off all of my high interest debt. So I'm now debt free except my house and this loan of course. And the HEI loan does not have to be paid back for 10 years. With that loan I spent 10,000 to pay off the high interest debt and I don't have to pay that off for 10 years. So I was thinking the other 30,000, I could use that to grow into $100,000 by investing it maybe into a Roth IRA or some other retirement account. Can you guys give me some guidance on how to set that up or what you would do with the 30,000 dol also make 90,000 a year at my job. Thank you for your help. So Robert, what do you think now about Marcus taking out this home Equity investment loan, 10,000 of it going to high interest debt and the other 30,000 to now invest in the markets with. Is this a plan, is this a strategy, is this a wealth building strategy or is this a get rich quick strategy?
- [46:47]
Robert
Yeah, this is a tricky one because these investments, just so everyone is clear, what an HEI is is basically these funds come to you and they say, hey, we love your house, we'll give you fifty thousand, a hundred thousand dollars, but we own part of that home now. So it all sounds good. Because you get this money, you can go out and do what you want with it. Maybe you're going to remodel a kitchen, you're going to go buy some bitcoin, whatever you're going to do because there's no payment. But the problem here that most people don't understand is in the fine print of these contracts you're going to have to make sure everything is upkept perfectly because they now you have a partner in this home. So they're going to make sure that the water heater is great, everything is up to snuff, the roof is kept up, all the landscaping is kept up because you have a partner now to answer to in this home. So that's one of the big issues. Secondarily, they're betting on the upside of this house. They're not just giving you the money because they like you, you. They're giving you this money because they want to own a piece of the upside in the house. So keep that in mind. If you live in an area where your house is appreciating 8, 10, 12, 14% a year and you're giving up a big chunk of that to get this money to me, then it's a get rich quick situation and I wouldn't do it. I think there's better ways to find money to be able to do further investments and pay off high interest debt. So I'd be very careful or if you're going to do this, just get the amount you need to pay off the high interest debt and no more.
- [48:18]
Austin
Now here's my follow up for you. Are you saying he returns the 30,000 and just lets it appreciate? Like let's say he had to do something with this 30,000. What is he doing with it?
- [48:28]
Robert
Man, I don't know. I mean you could go invest it, but you have to realize if you go invest it, let's say you're an average investor and you make 10%, but your house is appreciating 14% a year. You're actually giving up money for the future because somebody else is getting a part of that appreciation, not just you. So you just have to weigh all the odds here to make sure you understand the numbers and all the fine print in these HEI loans. They're very prevalent right now. A lot of people think they're awesome. But you have to understand the totality of the numbers and what you're giving up by taking this money against the equity of your house.
- [49:07]
Austin
Now as I think about, you mentioned that that 14% appreciat. As of August 2025, the US housing market showed modest growth compared to the post pandemic boom. National prices year over year increased by 4.7% with the best appreciation being in Rockford county, Illinois at 9%. Medium home value is 185,000. So it seems like that 8.9ish percent range is the top 10. We got some in Mississippi, some places in New York, some places in West Virginia, Texas and Georgia, some. So maybe. Right, just kind of like using real data here. If I had to do something with this 30,000. Yes, you want to invest it. You don't want to just let inflation erode at it. We saw what Jerome Powell recently said. So I would imagine that either one, inflation's going to reinvigorate and or because of lower interest rates. With the Fed cutting these interest rates, mortgage rates will begin to tick lower. The 10 year yield begins to lower as well, which could likely drive up prices around the country. So regardless, you need to get this money working for you. You can't just let it sit in cash. That is not what we should do. I would probably max out the Roth ira. I'd make sure I'm, I'm doing all I can when it comes to maybe my 401k at my work. You mentioned you only have about 20,000 inside of that. Maybe you had good autonomy over that. You can ensure that that money gets invested correctly and is growing for you. Maybe though, get yourself some gold. You already got a little bit of bitcoin, maybe a little bit more of that. But I think the biggest takeaway here, Robert is one to nine, not find yourself in high interest debt again. And then two, if we are going to do this in the future, make sure we're not taking out more than we need to pay off the high interest debt.
- [50:47]
Robert
Yeah, I think that's a great takeaway and I just hope Mark really understands the totality of all the numbers. And I think you made a really good point that'll help us for future episodes when we're answering questions always in your question, let us know the city you're in. If you're talking about a property or a business you own or something, give us the full details because it'll help us better understand like Austin illustrated to what could the possible upside capital appreciation be of this house that you own, Mark, because we don't know the market that you're in. So that helps us better understand the numbers to be able to help you make great decisions.
- [51:24]
Austin
I really like that answer, Robert. Let's now move on to our next question coming from Scott. Scott says, hey, rich habits. Quick question. How many brokerage accounts should someone have? Short story is I've ended up with 5. I've since consolidated to 3, but I'd like to consolidate to 1. Is there an advantage to having at least 2? If you want to have more than one brokerage account, don't sweat it. I've got more than one brokerage account. Robert's got more than one. And some accounts I hold the same ETFs inside. It's just, it's not that deep. However, Public.com is a multifaceted platform that offers ETFs, single stocks, options, crypto alternatives, bonds, like all these things on that one platform. So if you do want to try and consolidate, definitely go check out public. But Robert, what's your take on having more than one brokerage account?
- [52:11]
Robert
Yeah, I don't even know how many I have. It's a lot because it might be a brokerage account for specific cryptos that aren't available on public or weren't at the time. It might be multiple brokerage accounts because of different, you know, products that I'm buying. And one might be a retirement account. One might be my daily stock trading account. So I think it's totally okay to have multiple accounts as long as you're not spreading yourself so thin because then you're just. It's more work to keep track of and understand where you're at financially. But as you grow wealth, I wouldn't worry so much of just having one, but just don't have 10. That's, that's my takeaway on it. I think 1, 2, 3, or 4 is fine and you'll be able to manage it and keep track of where you're going.
- [52:55]
Austin
Yeah, the manage it and keeping track. What doesn't get tracked gets forgotten. And what does get tracked gets invested and figured out. So make sure you're keeping track of your money, making sure you're reinvesting those dividends or rebalancing when you need to, and not saying, oh my gosh, I forgot about this account. It's got $2200 in it, like from a couple years ago, whatever. So, like, make sure that you're tracking your investment investments. As always, thank you all so much for joining us on this week's episode of the Rich Habits podcast. Bearing with me. Well, I'm sick as a dog over here. You're probably like, why does Austin sound so bad? My head is a brick. So I've got the headphones in so I can even hear myself talk. It's been a lot to get through this one, but we love you guys. We love Fundrise. We love Ben for coming on the show and talking with us, teaching us all things about real estate, private credit, data centers, build for rent, venture investing. It's so fun fun to get these unique and sort of inside scoop perspectives on what's going on. And as always, if you learn something from these episodes, please consider leaving us a five star review. We take our reviews very seriously. We only want to be delivering the best top tier content possible to you and leaving us a five star review is how you can say thank you.
- [54:03]
Robert
And always remember to share the newsletter and the podcast with a friend because you all have family members and friends that need to level up their game in finance and in business and in mindset and we're here to help. So share along. It always helps us grow and we love the fact that you guys give us those five star views.
- [54:20]
Austin
Thanks everyone and we'll see you on Thursday. Sam.