Real Estate Crowdfunding for Accredited Investors

Crowdfunding generally refers to the raising of small amounts of money from a large group of people via the internet for a project or venture. Since crowdfunding’s beginning, it has branched out into other areas of raising capital and has made its way to the real estate market. Presently, real estate crowdfunding is a billion dollar industry which is expected to double within the year. While crowdfunding is great for community projects, raising money for medical expenses, and raising capital for new fledgling businesses, its basic concept works great in the real estate market.

Real estate equity crowdfunding allows accredited investors who many not have had previous access to the world of real estate investment to invest in new or existing real estate ventures and receive equity in the company for their contribution. Other types of real estate investment exist for those wishing to purchase home or commercial properties on terms other than equity and real estate equity crowdfunding can provide more security and higher returns than more traditional real estate investment options.

Campaign sizes can vary widely and can range from less than $100,000 to well over $25 million. This is a whole lot of area to invest in and the real estate crowdfunding market is expanding very quickly. There were over 85 real estate platforms for crowdfunding in 2014 and as the area expands, the options will too. Each platform may run things a little differently so it is important to choose one which suits your investment style. Platforms like Realty Mogul will pool investors’ contributions into a commercial real estate investment with less risk and the expectations of higher return that traditional investment opportunities.

Use of a real estate crowdfunding platform like PeerRealty.com , PatchofLand.com, or realtyshares.com will allow you to invest much more quickly than traditional methods and in a more efficient way. Check the requirements of your platform of choice for due diligence, accreditation, and legislated requirements before you begin searching for an investment. Each site will have its own secure process in place to help you ensure you are meeting all legislated requirements, are fully aware of any and all the risks involved in the particular venture, and each will have its own set of payment requirements.

Some crowdfunding platforms allow investors to create their account for free if they can be certified by the crowdfund platform. Most people looking to raise money for their venture will pay a percentage and transaction fee, a monthly subscription fee, or a package deal for one campaign or a series of campaigns. It is important to ensure that the platform you choose has payment terms which are acceptable to you before you begin. Read all terms and conditions, requirements, and payment or package rates carefully so you don’t end up with a surprise. Some sites will have an all-or-nothing approach and will return investment to the investor should the campaign not reach its goal. Others will allow the campaigner to extend the deadline in order to reach their goal. While not common in real estate crowdfunding, other venture types will also give the campaigner the amount they did manage to raise. As such, ensure you know which type your platform of choice offers.

Real estate equity crowdfunding allows speedy and efficient real estate equity investment which can have you seeing a return on your investment faster than traditional investment types. Many platforms will ensure both the one raising capital and the one investing are legitimate for due diligence purposes and legislation requirements prior to allowing the campaign to be posted. This increases the safety and security of your investment and makes it a safer way to contribute.