Tag: Crowdfunding Real Estates

crowdfunding real estates

Crowdfunding Real Estates: The latest in the Market

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Crowdfunding start-ups and businesses has been prevalent since a long time in the market. The latest kind of these are crowdfunding real estates. Real estates are one of the most profitable alternate investments to make and crowdfunding real estates will only add pace to the profit involved. The potential of crowdfunding real estates has been already identified by eminent crowdfunding players in the field. These include crowdfunding platforms like MyEfunder and CircleUp. With crowdfunding real estates blooming, we look into everything regarding why real estate has emerged as a mainstream investment from being the underdog

A brief History of real estate market

Until early 1980’s real estate market was never thought of being a major form of investment. Apart from hard cash, it was only stocks, assets and bonds which were considered to be fruitful with time. However with saturation and drive to find more option, financial institutions included the market of real estate in to list of generating a stable income.

The After 1980’s scenario

Real estate emergence caught hold of the various institutional investors, which included it in their investment portfolio. The fruit of the newest addition to the portfolio was sweet and slowly real estate market was towards its bloom season. The growth was enormous and it turned out to be a regular source of stable income. Meanwhile accumulation of funds through crowdfunding was also spreading its charm. A combination of the two; crowdfunding real estate has been on the investment radar for more than a decade now.

Crowdfunding Real Estates

Investment agencies have lately identified the potential of real estate investment and are slowly gearing up to brace the latest trend in the market which is crowdfunding real estate. Eventually, the past is the witness to the fact that real estates projects were initially handled by the already established. With the evolution of various financing techniques, crowdfunding real estates being one of them, commoners can even raise their own real estate projects. Also the charm of real estates investment is such that investment companies do not hesitate in loosening their pockets for crowdfunding real estates. The process is even eased by crowdfunding platforms which facilitate the exposure to real estate market thereby easing crowdfunding real estates. Through these platform funds for crowdfunding real estates projects can be accumulated from both individuals and companies. Crowdfunding real estates i.e. funding real estates by the method of crowdfunding is gaining more than average momentum amongst individuals of all classes, especially the middle class. They are seeing crowdfunding real estate as an opportunity for their dream projects grow and flourish. People are coming up with innovative ideas clubbing the simple real estate concept with technology and networking.

Real estate, an option for investment seems to get an extra edge with the concept of crowdfunding real estates. People who were used to crowdfunding investment seem to be more than pleased with crowdfunding real estates and are eyeing it as the next investment in their kitty. A successful venture of crowdfunding real estates comes from the combined efforts of the investor and the project owner.

crowdfunding real estates

Crowdfunding Real Estates – Different Methods Used

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Real estate is ever growing and profiting. As long as there is an increase in population, the need to dwell is going to increase, and thus you will need more buildings and apartments. Everyone wants to try their hands on real estate now days, as it is one of the profit giving field and risk factors are pretty calculable. And this is where the crowdfunding real estates scores.

Crowdfunding is an entirely new way of financing. The concept of crowdfunding is that you can invest in a particular thing, and along with you there will be many investors. Crowdfunding helps the companies or individuals who are in a mission, but couldn’t gather the capital. Through crowdfunding a group of investors invest and the needy companies/sponsors can make good use of it. Both investor and sponsor are benefited by this.  Read more about crowdfunding here: http://myefunder.com .

In crowdfunding real estates, money gets invested in real assets like apartments, buildings and shopping malls. There are many platforms for crowdfunding real estate.

Some top crowdfunding real estates sites:

  • Realty Mogul
  • Fundrise
  • Ground breaker
  • Crowd street
  • Ground floor
  • iFunding
  • Crowd baron
  • RealCrowd
  • RealtyShares
  • Patch of Land
  • Equity Net
  • Peer Realty
  • Peer Street
  • Real Circle

Types of crowdfunding real estates:

There are three types of crowdfunding for real-estate. They are direct investing, indirect investing and Software as a service.

Direct Investing

This model of crowdfunding real estates allows investors to invest in real estate directly with a real estate firm. Here the crowdfunding firm acts only as an intermediate between the investor and the real estate sponsor.

The advantage of these crowdfunding real estates is that, the investors are co-investing with the sponsors and there is no brokerage. The benefit for the sponsor is that, they get direct access to the capital and they also have a direct contact with the investor.

CrowdStreet and Real Crowd are few among the direct crowdfunding real estates sites.

Indirect investing

In this model of crowdfunding real estates the accredited investors invest through a Special Purpose Vehicle (SPV) created by the crowdfunding firm. Added fees and brokerage are yielded by the crowdfunding firm here.

The advantage to sponsor in this type is that, they receive a single check and they only have to manage one SPV throughout. Here the risk of loss to the investor is more, because they don’t know on whom they are investing, and their profit is calculated on how good the crowdfunding firm does.

Realty Mogul and iFunding works using the indirect investment of Crowdfunding real estates.

Software as a Service (SaaS)

In this model of crowdfunding real estates, the sponsors integrate a SaaS technology platform with their existing website, through which investors can make investments. This is more or less like the direct investing.

The CrowdStreet and CrowdEngine are examples of SaaS crowdfunding real estates type.

It is estimated that the crowdfunding real estates may grow to a trillion dollar business by this year. Those who want to invest and make returns, but is doubtful about where to start with, can try their luck with the low risky crowdfunding real estates.