If you would like to invest in real estate online, one of the best options to consider is real estate crowdfunding. Real estate crowdfunding gives investors the opportunity to invest relatively small amounts in commercial or residential properties. Such investments used to be limited to insiders who knew the developer behind the property or had other connections.
Crowdfunding websites are known as “platforms.” There are dozens of crowdfunding platforms that specialize in real estate offerings. Developers, also known as “sponsors,” use the platforms to publicize the properties they are developing and to connect with potential investors. Investors are often able to review and sign all investment documents, such as the subscription agreement and operating agreement, online, and many platforms also handle the transfer of funds from investor to sponsor.
Platforms operate under various business models; some charge the sponsor a flat listing fee while others charge fees to both sponsor and investor. It’s very important that investors understand the fee structure of the platform they are investing through.
Some crowdfunding platforms also offer investments in funds based on property type, geography, or other factors. These funds are often open to non-accredited investors who are shut out of most individual real estate crowdfunding offerings.
If you find a crowdfunding investment you are interested in, you should conduct thorough due diligence. It’s also important to compare the investment with other available offerings; this may sound daunting, but CrowdSeekr makes it easy.
Continue reading our blog to learn about real estate crowdfunding 101, the advantages of real estate crowdfunding, how it has changed investing, and even how much you can expect to make if you invest.