Types of Real Estate Investments (Crowdfunding)

Real Estate Article

There are different types of real estate investments beside buying and selling property. One of the hottest investment strategies is crowdfunding.

 Crowdfunding has been reinvented to fit into the digital age with a wealth of information and online platforms to invest right from your home or office. As such, it is one of the top types of real estate investments available.

 Crowdfunding is so hot right now, that it is a billion dollar industry. According to sources for Entrepreneur.com, "Real-estate crowdfunding was a $1 billion industry in 2014 and is expected to grow to more than $2.5 billion this year."

 Why is crowdfunding one of the top types of real estate investments? Nav Athwal, CEO of a real estate crowdfunding platform, explains:

 "With the passage of the JOBS Act in late 2012, crowdfunding has caught fire and is being used to raise money for everything from startups to small businesses.  In fact, in 2013 alone, crowdfunding, which includes debt, equity, rewards and donation based crowdfunding, is responsible for approximately $5 billion worth of capital raised."



It seems that because there is so much money in crowdfunding, one can assume that it is easy to get into. It is not that simple. If you want to make sure you lower your risk as much as possible, like any type of financing, then you need to be sure to work with the right investors.

How Crowdfunding for Real Estate Works

Crowdfunding is a beautiful idea. It is a community of people pitching in to help lift up a property while seeing a return on their money. The power of many bank accounts can help projects get started that may otherwise never come to pass. In the case of distressed homes, it can revitalize a neighborhood and make it beautiful and safe again.  Crowdfunding feels more personable than going to through the doors of a bank, and it leverages the financial power of many.

As lofty an idea that crowdfunding is, we have to remember that it is one of the types of real estate investments, therefore, there must be checks and balances. If one is careful in the types of real estate investments one funds, one can lower their risk and help prevent costly mistakes.

How Do I Get Into These Types of Real Estate Investments?

If you want to get into crowdfunding, then here are four tips to help you.

1. Do your research. You want to make sure that someone else has the know-how to present you with the right deals. Read through crowdfunding results, both good and bad. Once you are familiar with the crowdsourcing landscape, you will know what to look for when it comes to choosing the right platform.

2. Normally, the sites with the best info are the most trustworthy source to deal with. Dan Miller, President of Fundrise, says, "Look for sites with good content. The ability to originate profitable deals is the lifeblood of any crowdfunding platform. Without the deal, there would be no reason to use the service. A good crowdfunder will present only 3-5% of the deals they see. “Origination is probably the most difficult aspect as we’re scaling. “Online origination doesn’t work. We need someone on the ground who knows the market to bring in local deal flow."

3. Easy-to-access resources. Transparency is a good thing when looking around for potential opportunities. The process needs to be open and easy to understand.

4. Pay attention to all the moving parts of the deal. Be sure everything is in good working order. These types of real estate investments, as with any real estate investment, have a lot of moving parts. You want to be sure that there are no weak links - from coming up with projects to dealing with funds, everything has to be professional and systematic. Mistakes can be costly.

The search for the right crowdfunding platform can seem complex. The trick to easing the task of finding the right crowdfunder is to start early. Subscribe to email lists, talk to people who have crowdfunding experience, pay attention to the markets and learn to the industry jargon. An informed investor is a good investor.

Finally, remember that crowdfunding is relatively new. It may take some time to see how well of an investment real estate crowdfunding is. One thing's for sure, crowdfunding is going to be around for the foreseeable future. Taking crowdfunding seriously as one of the top types of real estate investments can open a whole new world of investing for you.

Contact Huios Realtors by email (huiosrealtors@gmail.com) on Crowdfunding Investment in Lekki Axis Lagos State Nigeria.

Sourced- RENU