But real estate crowdfunding doesn't only stand out from its ancestral forms simply because it opens up investment opportunities to more people.
Not exact matches
How
do the hottest real
estate crowdfunding platforms stack up?
With so many real
estate crowdfunding deals on the market, how
do you decide which are safe and hold the most potential?
A few years ago,
crowdfunding real
estate platforms didn't exist.
REITs are fantastic, but they don't have the granularity as real
estate crowdfunding platforms.
Here are our tips for vetting and
doing due diligence before investing in any real
estate crowdfunding deal.
However, there are ways to
do this earlier, such as getting started with real
estate crowdfunding.
Although investing in real
estate through a
crowdfunding site
does have lower risks than purchasing stock, it follows that the likely return is lower than investing in the stock market.
Using real
estate crowdfunding to invest in properties means you don't have to spend the time scouting.
The real
estate crowdfunding portals
do a lot of the legal work for you but that doesn't exempt you from
doing your own homework.
Making money in real
estate crowdfunding, like any type of investment, requires
doing a lot of research.
If you don't like the hands - on approach, you can also
crowdfund a real
estate venture with a service like Fundrise.
With almost all of our cash pile now reinvested into dividend stocks, we have very limited ways to
do more purchases (we also still purchase index funds, invest in
crowdfunding and invest into real
estate with new incoming funds).
I think it's worth mentioning that in order to
do crowdfunded real
estate you have to be an accredited investor, which means you have to earn an income of 200k + per year, or have a net worth of one million dollars.
Diversification still makes sense although will need more money to
do so in real
estate crowdfunding.
When I
do, real
estate crowdfunding may be ideal for me.
The bot is targeted at real
estate investors who are originating private equity,
crowdfunding and syndication offerings and who want to get the legal paperwork
done more quickly and affordably than through the traditional law firm route.
Crowdfund Insider reported last month about the RECoin Initial Coin Offering (ICO) that promised tokens backed by real
estate that
did not really exist.
That might not sound like an amazing return worth the time to analyze individual real
estate crowdfunding projects but don't overlook some of the other benefits.
When you have money coming through
crowdfunding and you've also got money going out through
crowdfunding, that's a lot harder to
do in other verticals that are not real
estate, like if you're financing a private company or something that's not going to have dividends on a regular basis.
If you don't mind tying up cash for longer (~ 9 to 24 months) any of the older more - established top - name Real -
Estate Crowdfunding Debt Lenders (1st Lien Debt, not Equity) providers have worked well for me earning very high yields (~ 9 - 11 %).
These funds work much like mutual funds
do, using trusts or
crowdfunding to help a group of real
estate investors acquire an interest in residential or commercial property without the headaches that can come from outright ownership and day - to - day management.
I've
done well in the stock market (with asset allocation and dividend growth investing) and am toe - dipping in options trading and
crowdfund real
estate to diversify my income sources.
The rise of
crowdfunding has been swift and substantial, but
did you know that there are options for real
estate crowdfunding?
My own real
estate crowdfunding returns have been just above 10 % annually which is about average given a survey I
did on income properties available on five platforms.
These offerings come from no shortage of real
estate crowdfunding portals — some that serve as a marketplace for third - parties to raise funds, and others custom built by companies
doing their own deals.
Which is funny because I hadn't
done anything related to real
estate for many years, so when I started evaluating real
estate crowdfunding opportunities it came back to me — «wow, so that's what I was
doing back then.»
Crowdfunding business plans should include a market report, but you can
do further research by reading up on local business journals, looking at U.S. Census data and signing up for local real
estate market reports.
You can now invest in commercial real
estate, a $ 13 trillion market, and Fundrise is the
crowdfunding startup that lets you
do it.
Do you have any advice for people who are looking to invest in real
estate through the
crowdfunding model?
Or you could
do it the 21st century way, with a real
estate crowdfunding company, which pools investors» funds to make loans to home flippers or to buy residential and commercial properties.
Even if you don't have much money to invest, you can still become an investor in
crowdfunded real
estate investing.
Once you're
done with your property type analysis, you should be left with only a few real
estate crowdfunding deals in your funnel.
Does crowdfunding pose a serious threat to banks, VCs, angels and / or private equity real
estate firms?
The opportunity
does offer some solid, double - digit returns on real
estate crowdfunding and instant diversification in an asset class that is notoriously difficult to diversify.
The real
estate crowdfunding portals
do a lot of the legal work for you but that doesn't exempt you from
doing your own homework.
The new
crowdfunding rules means you don't need $ 1 million in net worth to invest in
crowdfunded real
estate and the market for
crowdfunding investment is set to jump in 2016.
While we didn't see any IPOs, we
did get the first eREIT (real
estate investment trust) from
crowdfunding platform Fundrise.
Large equity REIT companies don't have the flexibility or speed that smaller
crowdfunding developers have so I wouldn't be surprised if real
estate crowdfunding investors see returns a percent or two higher than REITs on an annualized basis.
Using real
estate crowdfunding to invest in properties means you don't have to spend the time scouting.
While RealtyShares
does some due diligence on the developer and the project, you have to understand the the real
estate crowdfunding platform is just a marketplace for deals.