The interview revealed a lot of great information around real
estate crowdfunding returns, how to find the best crowdfunding deals and how to invest on the different websites.
Real
estate crowdfunding returns of 10 % and higher are just part of the story along with a chance to diversify your risks in stocks and bonds.
Real
estate crowdfunding returns should be at least comparable to the return on equity REITs, maybe even higher.
Real
estate crowdfunding returns will vary by type of investment as well.
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.
Not exact matches
He sold his SF rental home for 30X annual gross rent in 2017 and reinvested $ 500,000 of the proceeds in real
estate crowdfunding for potentially higher
returns.
Whereas these real
estate crowdfunding investment
returns are taxed at your regular income rate — the platforms send you a K - 1 at the end of the year.
The internal rate of
return (IRR) is one of the most common metrics used in real
estate crowdfunding and therefore one of the easiest to compare deal to deal.
I work in real
estate investment (invest on behalf of family offices and high net worth investors), and it recently occurred to me that while you invest in P2P lending, you haven't invested with real
estate crowdfunding sites which claim to yield better
returns than the ~ 7 % you've achieved via P2P.
In addition, diversification of investment in order to mitigate risk and receive higher
returns is easier under a
crowdfunded real
estate investment.
Here we highlight the challenges and opportunities put forth with the new regulations, and analyze how to use each flavor of
crowdfunding to find the best risk - adjusted
returns within the real
estate market.
EarlyShares is the trusted real
estate crowdfunding platform that gives accredited investors direct access to vetted,
return driven investments in commercial real
estate.
Although
crowdfunded real
estate has only been a mainstream investment option since 2012 with the passage of the USA JOBS Act that legalized
crowdfunding, it has provided positive
returns for real
estate investors in every income bracket.
RealtyShares pre-screens most loan applications so you only see the best 5 % of applicants that are most likely to offer the positive
returns that make
crowdfunding real
estate so attractive.
Crowdfunding is ideal for real
estate because it pools funds to spread risk while offering solid
returns to investors.
Unlike investing in the stock market, which can only offer projected
returns, you know what you will be getting back when you invest through a real
estate crowdfunding website.
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.
Investing in
crowdfunding real
estate can be a happy medium with great
returns but managed properties.
He sold his SF rental home for 30X annual gross rent in 2017 and reinvested $ 500,000 of the proceeds in real
estate crowdfunding for potentially higher
returns.
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.
In an earlier post I shared my real
estate crowdfunding investor checklist, highlighting the important aspects of a deal investors should be aware of such as
return sensitivities, terms of deal, economic structure, tax implications etc..
By holding a portfolio of
crowdfunded properties, you benefit from the higher real
estate returns and wealth generation of real
estate but mitigate the hassles.
Real
estate crowdfunding offers solid
returns but most projects are short - term so there is the need for constant management of your portfolio.
Before investing in a
crowdfunded real
estate project, ensure you understand the business, how and when you might get a
return, and whether you will receive an equity share in the business or a regular dividend or interest payment.
The Internal Rate of
Return (IRR) is one of the most common metrics used in real
estate crowdfunding and is typically one of the first you'll encounter when examining a potential deal.
He sold his SF rental home for 30X annual gross rent in 2017 and reinvested $ 500,000 of the proceeds in real
estate crowdfunding for potentially higher
returns.
Institutional capital's appetite for the offerings of real
estate crowdfunding platforms is destined to increase, drawn by above - market
returns.
I think both real
estate income investing and
crowdfunding can provide strong
returns and diversification.
Joseph: All the real
estate crowdfunding sites have analysts that check projections on projects to give investors an idea of projected
returns.
Even a
return of 9 % annually on real
estate crowdfunding would be excellent considering you're also getting a diversifier from other assets in your portfolio.
Founded in 2010 by Dan and his brother Ben Miller, Fundrise has brought real
estate crowdfunding to the mainstream, allowing anyone — accredited and unaccredited — to invest in property for as little as $ 100 per share, and as much as $ 10 million, and earn favorable
returns (historically 12 to 14 percent).
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.
Investing in
crowdfunding real
estate can be a happy medium with great
returns but managed properties.
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.
Crowdfunding real
estate is a great bridge between the better
returns on direct investment and the easier management with REITs.
Crowdfunding can give real
estate investors access to the high
returns of institutional - grade private equity - and an alternative to the market fluctuations of ETFs and the high fees of non-traded REITs.