This 21-Year-Old Tells Us How She Became a Real Estate Mogul With Little Money

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Editor’s note: This story was originally published in January 2018.

Buy land. They’re not making it anymore. — Mark Twain

Katie Smith had always been a saver. Even at a young age, she’d managed to save thousands of dollars.

But she was tired of watching her savings just sit in the bank, doing absolutely nothing. She needed a way to make her money grow.

“I had it all sitting in a savings account, getting something like 0.01% interest. You can only take that for so long,” says the 21-year-old, who just graduated from Georgetown University in Washington, D.C.

Ah, but there was a problem.

She didn’t want to invest in the stock market, which had been climbing for nearly nine years in a row, reports CNN Business. Like many people, Smith didn’t trust it to keep climbing much longer.

“I think everything is a little overvalued right now,” Smith says.

She had always liked the idea of owning real estate. She’s familiar with the old folk saying about land being a good investment — they’re not making any more of it.

“It’s pretty limited in supply,” she says. “I like the idea that it’s super tangible.”

Ah, but there was another problem.

To start investing in real estate, you generally need a lot of money. Houses or land can cost thousands — or hundreds of thousands — of dollars. And once you buy some rental property, you’ll have to play landlord, which can be a pain.

Smith had saved herself a few thousand dollars, but it wasn’t “buy a house” kind of money. Not yet. After all, the college senior was just starting out in life, studying accounting and finance at Georgetown.

Building Her Portfolio

She wasn’t liking her investment options — savings account or stock market? — but then she heard about Fundrise.

Fundrise allows her to invest her money into two portfolios that support private real estate around the United States. It does all the heavy lifting for her — and plays landlord on her behalf.

Through Fundrise’s online dashboard, investors can see exactly which properties are included in their portfolios — like a set of townhomes in Snoqualmie, Washington, or an apartment building in Charlotte, North Carolina.

I own a piece of an apartment complex in Ann Arbor, Michigan. Property on the West Coast. Bits and pieces of apartment complexes in Texas and Denver, a construction loan, a mixed-use property.

“I can go into my Fundrise account and see what I actually own,” Smith says. “I own a piece of an apartment complex in Ann Arbor, Michigan. Property on the West Coast. Bits and pieces of apartment complexes in Texas and Denver, a construction loan, a mixed-use property.”

Many Happy Returns

More than a year after buying in, Smith has been pleased with her Fundrise experience.

Fundrise lists an average annualized return of 11.44% in 2017. Investors pay 1% in annual fees — a 0.85% asset-management fee and a 0.15% investment advisory fee.

Investors can earn money through quarterly dividend payments and potential appreciation in the value of their shares, just like a stock. Cash flow typically comes from interest payments and property income (e.g. rent).

She didn’t need to have hundreds of thousands of dollars stashed away, either. She could get started with a minimum investment of just $500.

It’s a pretty low barrier to entry in terms of the amount of money you need.

“It’s a pretty low barrier to entry in terms of the amount of money you need,” Smith says. “I invested a couple grand, and I’ve been really pleased with the results.”

How to Get Started

Getting started is pretty easy.

1. Visit Fundrise’s website, enter your email address and click “Get Started.”

2. Choose an investment plan. We like that the “Starter Plan” allows you to start investing with only $500.

3. Finish the sign-up process. If at any time during your first 90 days you’re not satisfied with Fundrise, they will buy your investment back at the original investment amount.

Keeping It Rolling

A busy person, Smith likes the simplicity of the online dashboard.

“It shows your earnings to date,” she explains. “It tells you when your next dividend is. It shows you the breakdown of where your money is invested. It has a risk scale that makes it pretty easy, visually, to see how much risk you’re taking on.”

Today, having earned a bachelor’s degree in finance from Georgetown, she has a job lined up at an investment bank. Any money she makes from Fundrise just gets rolled right back into real estate.

“They give out dividends every quarter, and they have an option where I can reinvest all my dividends into their portfolios,” Smith says. “That way, I can make sure it keeps going. I don’t have to actively put more money in it unless I want to.”

The publicly filed offering circulars of the issuers sponsored by Rise Companies Corp., not all of which may be currently qualified by the Securities and Exchange Commission, may be found at

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He likes real estate.