YOU DON’T HAVE TO BE A MOGUL TO BE SUCCESSFUL IN REAL ESTATE

Real Estate Crowdfunding

Picture in your mind someone you think of as a real estate investor. What do they look like? What are they wearing? What gender are they? How old are they?

If you pictured a male, 40 or 50-something guy with a nice suit and a winning smile, obviously paid for with all his real estate riches, you aren’t the only one. The standard, successful real estate investor is almost always a man in his middle ages – or at least, that was the case until recently. Now, in this new era of easily accessible technology and communication platforms, almost anyone can invest in real estate.

And not only can they invest in real estate, they can succeed.

So what’s the big secret?

The answer is simple – crowdfunding.



Now, you aren’t asking your friends and family to help you set up a GoFundMe to buy the abandoned hotel down the street so you can fix it up and make profits. You could, of course, but this kind of thing requires capital and a lot of work – work you like can’t or don’t want to put in.

The real solution is much simpler. You let the big development groups handle all of that mess while you pitch in a small portion of the goal. You help fund the project, not run it. When you donate a small portion of the millions it takes to build and own this kind of property, you then are rewarded with a certain share portion or bonds.

Just to be clear – the “small portion” isn’t a couple bucks. You still need to put in a worthy investment in order to see return. Think in the area of $5k. This isn’t a perception or market estimate, either. This has happened before. A New York development group, Simon Baron, recently crowdfunded $1 million to set off development for a Long Island City rental tower.

Crowdfunding 101

Maybe you’re unfamiliar with crowdfunding in general or only know about in terms of helping families pay hospital bills or how game developers jumpstart new projects.

Crowdfunding is when an entity or person asks John Q. Public for money to help get their idea off the ground or with participation in a project. The public funnels money to the project, and hopefully enough is made to meet the goal. Backers usually get a sort of reward – like a handwritten note or a copy of the game, using the previous examples. The more money you donate, the more you get in return.

So apply this formula to real estate. A development group asks for money in order to get their newest idea going. You donate money, like that $5k mentioned previously, and the goal is eventually met. Based on your input of the minimum amount of money possible to help start the development process, you get a small share of the profits.

So what’s the big deal? This is actually quite revolutionary for the world of real estate. Normally only those 40 to 50-somethings with snappy suits you pictured earlier get to buy equity in real estate – the typical qualifications are a million dollar net worth or a $200,000 annual income. Now anyone with cash lying around can join in on the success of real estate investment, even if they’re a soccer mom or an entrepreneurial student itching to play the real estate field.

Written by Jason Gordon