By Brandon Jenkins, Co-Founder, Fundrise
Take a moment to imagine yourself on the sidewalk. Picture the buildings surrounding you. Now, answer this: Who owns each building? Who profits from the places you go to?
The answer: not you, and probably not anyone you know.
In 2012, we were looking to purchase a worn-down building in an up-and-coming area of Washington, DC — H Street NE. We went out to raise money from investors across town and in New York, most of whom had never heard of and never been to the neighborhood. The investment funds and wealth advisors looked at us confused when we told them what we were doing.
Our friends and neighbors, on the other hand, thought it was amazing. They understood the opportunity and our vision, because it was their vision, too. The community, the customer and the local residents were excited about what we were doing, but the investors didn’t know what we were talking about.
At that time, only high net-worth, accredited investors were allowed to invest in these types of commercial real estate projects, while the other 97% of the population was excluded. As a citizen of Anytown, USA, it was easier to invest in a Japanese manufacturing company than to invest across the street.
So, we started Fundrise with a simple goal: give everyone the opportunity to invest in real estate.
This was before crowdfunding or the Jumpstart Our Business Startups (JOBS) Act were on the table, and everyone we spoke to told us that our idea was impossible.
Well, they were wrong. It is possible.
After nearly a year of working with lawyers and the Securities and Exchange Commission, we got there. We raised $325,000 from 175 local residents who believed in their community and wanted to own part of a building in their neighborhood.
Then we did it again and raised $350,000 from 361 investors. Then again. The first time it took us three months to raise the money. Our most recent public offering, 1539 7th Street NW in Shaw, raised over $100,000 in two hours.
Now we’ve had nearly 1,000 investors invest over $10 million in 19 deals in cities like Austin, Indianapolis, New York, Philadelphia and Washington, DC and we have plans to make it to even more cities soon.
It’s caught on because it’s intuitive. It makes sense.
Imagine if you invested in your neighborhood. You could transform vacant buildings in your city. You could actually see your money at work and own something tangible. One of our $100 investors showed off the H Street property building to his mom and dad when they came to town. That’s powerful.
So, what would you build? A bookstore? New restaurants? More day care centers? Affordable housing? What would it be like to live in a city you built?
With Fundrise, everyone will be able to find out.