The old saying “the devil is in the details” is applicable in many situations, and real estate is definitely one of them.
Many alternative investors would love to put a solid, diversified real estate portfolio together, but the price of acquiring multiple properties in different markets is prohibitive. That’s why real estate investment trusts (REITs) like the Heartland eREIT from Fundrise are so popular.
The Heartland eREIT is a private REIT with a stated goal of giving investors reliable passive income while allowing them to reap the benefits of long-term asset appreciation. The Heartland eREIT executes that strategy by offering a diversified asset portfolio that was acquired with four main goals in mind:
- Acquiring commercial properties in the value-add and lease-up stages
- Targeting assets that can be repositioned or redeveloped to increase revenue and value
- Becoming equity shareholders in new and developing assets
- Using investor capital to provide mezzanine debt or capital injections into current developments
The Heartland eREIT is concentrated on multifamily and commercial real estate assets in the Midwest and Texas. Specifically, the fund is looking at assets in the following cities:
- Chicago and surrounding submarkets
- Denver and surrounding submarkets
The Heartland eREIT opened to investors in October 2016. From 2017 to 2020, the Heartland eREIT posted solid annual returns ranging from 5.7% to 8.1%. However, in 2021 many of the portfolio’s assets had stabilized, and the increased rents allowed for major appreciation gains, which helped eREIT investors net 41.7% returns. So far this year, the eREIT is posting a 6.1% return. Based on these numbers, a $10,000 investment in 2016 is now worth $14,960.
The Heartland eREIT currently has seven assets in its portfolio. Almost two-thirds of the assets in the portfolio are in the core-plus category with a majority of the remaining one-third being in the value-add category. The portfolio is rounded out by fixed-income assets. Examples of the assets in the portfolio include:
- Two multifamily properties under renovation in Dallas, fixed income
- New commercial property in Chicago, fixed income
- Two stabilized multifamily properties Denver, value add
The Heartland eREIT looks to take a balanced approach to grow investor wealth. It is currently in its operating phase. The NAV per share is $14.96 and it’s paying a dividend of 2.67%. The eREIT is listed in Fundrise’s “Core” investor category, meaning the eREIT has a minimum investment of $5,000. Investors' return tax reporting is 1099-DIV.
The legendary strength of real estate markets on the East and West coasts means the Midwest doesn’t always get the attention it deserves. But that doesn’t mean there is no value in this market. The Midwest offers investors an ideal combination of stability, upside and affordability. The Heartland eREIT is a great way to invest in this lucrative real estate market.
Accelerate Your Wealth
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