Crowdfunding Your Real Estate Investments
Ever thought about being a real estate investor but don’t have time or experience? Crowdfunding sites are an option, without having to lift a hammer! Real-estate crowdfunding sites were first adopted by house-flippers when they didn’t have easy access to bank financing. They would announce a project, then ask people to buy in for a return on investment or an equity stake. Here are two crowdfunding approaches that non-accredited investors can look into:
Equity crowdfunding: Close to the original real-estate crowdfunding concept, these help individuals become partial owners in distinct properties or projects. Investors invest passively and their return is a share of profits from the completed project. Investment minimums are around $5,000. Google “equity real estate crowdfunding” for more details.
Loan (debt) crowdfunding: These sites act as lenders. Investors on the loan side can get in for as little as $500. Their return comes from interest paid by the borrowers. These returns are generally safer than equity returns because debt is paid back before any equity is distributed. Google “real estate loan crowdfunding” for more.
Remember that investing is risky. Do plenty of homework and avoid snap decisions without considering all options, and ideally, speaking with an experienced real estate investor or agent.