The most common real estate investment crowdfunding opportunities today are for the “accredited investor.” These are investors who make more than $200,000 per year in income or have a net worth (exclusive of personal residence) of $1 million or more. This group includes somewhere around 8 million Americans, and if you’re not in it yet, you could be soon.
The major advantages of crowdfunding for these investors include:
• Pooled resources allow investment in much larger commercial projects with lower front-end investment required. When a minimum $100,000 investment may have been required in the past, crowdfunding can offer participation for much less, even down to $5,000 to $10,000.
• Projects can be selected and a custom portfolio developed.
• Projects can be anywhere in the country, so investors can diversify geographically as well as by property type.
• Technology allows easy signup and management via the Internet. Property details and offerings are readily available for review online, and eSignatures can be used for documents. Direct fund transfers can be made online, and distributions can be passed through directly to investors’ bank accounts.
• A good crowdfunding company will vet the opportunities, bringing the best to their group. This can involve checking the past performance of the developers and the demographics of the local markets.
Crowdfunding projects are categorized much the same as REITs, Real Estate Investment Trusts. They are generally either Equity or Debt investments. Equity investments participate in ownership of the property and rents, while Debt investments are loan packages secured by real estate.
The most common real estate investment crowdfunding opportunities today are for the “accredited investor.” These are investors who make more than $200,000 per year in income or have a net worth (exclusive of personal residence) of $1 million or more. This group includes somewhere around 8 million Americans, and if you’re not in it yet, you could be soon.
The major advantages of crowdfunding for these investors include:
• Pooled resources allow investment in much larger commercial projects with lower front-end investment required. When a minimum $100,000 investment may have been required in the past, crowdfunding can offer participation for much less, even down to $5,000 to $10,000.
• Projects can be selected and a custom portfolio developed.
• Projects can be anywhere in the country, so investors can diversify geographically as well as by property type.
• Technology allows easy signup and management via the Internet. Property details and offerings are readily available for review online, and eSignatures can be used for documents. Direct fund transfers can be made online, and distributions can be passed through directly to investors’ bank accounts.
• A good crowdfunding company will vet the opportunities, bringing the best to their group. This can involve checking the past performance of the developers and the demographics of the local markets.
Crowdfunding projects are categorized much the same as REITs, Real Estate Investment Trusts. They are generally either Equity or Debt investments. Equity investments participate in ownership of the property and rents, while Debt investments are loan packages secured by real estate.