Real Estate Crowdfunding Platforms are Promising 10% Returns for Investors

Allen Shayanfekr |

Investing your money is a challenge. You're tying up your funds for quite some time, letting someone else have access to them while you twiddle your thumbs and wait for the magic moment when you'll have that money back again. Whether you're investing money to help improve your profits and hopefully ultimately have plenty of money for retirement, to fund a child's education, or to move forward with some other major event in your life, you need to know that your money is going to work for you. Ideally, you want to get it started fast so that you can see substantial gains in your portfolio as soon as possible.

Real Estate Crowdfunding as a Passive Investment Option

With a projected 10%+ net return on each investment, you have the chance to see investment results that you'll love with real estate crowdfunding. This is especially true if you diversify your portfolio and arrange things so that you'll have investments maturing at different times throughout the year. If you want your money to work for you, real estate crowdfunding is a great way to get that started. These are real, tangible assets. If you were to drive down the road where the properties are located, you would be able to see a building and/or possibly a renovation or ground-up construction project. For renovation and ground-up projects, you’ll see real progress being made to increase the value of each project selected by you, the investor.

Low Investment Minimums with Real Estate Crowdfunding

If you're feeling a little uncertain about getting started, you'll rest easier knowing you can get in on the ground floor of many real estate ventures with as little as $1000. That means that you can take a chance with a minimal amount of money to get started, then increase your investments as you learn how effective real estate crowdfunding can be. Of course, the more you have to invest, the more you stand to make. That initial step into a new investment strategy, however, can be a difficult one. Knowing that you can start small and work your way up helps you take the first step more easily.



Real estate crowdfunding allows you to choose from a variety of projects or focus on one depending on your current investment needs. As an investor, you can decide how much risk you're comfortable taking at each financial level. Some investors prefer to stay with locations that they are very familiar with while others look for the economics in the deal. Either way, investors can be certain that most crowdfunding real estate platforms have taken a deep dive into the underwriting, making sure that they have limited the risk best they can.

Monthly Returns for Real Estate Crowdfunding Investors

For monthly cash flowing projects, investors will see their distributions arrive into their accounts once a month for the duration of the investment. For equity projects, interest and principle are generally paid back at the end of term-- making the investment riskier with potential for a much higher reward. There are opportunities that offer a hybrid of debt and equity-- monthly payments with a balloon/profit share at the end of term, along with the return of principal. Most crowdfunding real estate platforms use a grading system to assess the risk for each project. Depending on over 30 variables including the LTV and Sponsor’s track record, a grade is determined that equates to an interest rate. Then, they charge a small fee to the Sponsor as well as to the Investor for servicing the loan or equity offering.

Transparency of Real Estate Crowdfunding Platforms

Through real estate crowdfunding, you can avoid many of the headaches and non-transparencies that come with investing in real estate on your own. Even better, the associated risks have already been figured out. You can go through the available profiles and look at something that you can understand: properties, economics, and exactly what the developers have planned for the project. Real estate crowdfunding offer a tangible investment opportunity that you can understand.

When you take the plunge with real estate crowdfunding, you can start small or go big —it's all up to you! Most crowdfunding real estate platforms offer a projected 10% or more return on the funds that you're willing to commit to the program, so it's a great place to start. There's no effort involved for you except that which occurs behind a computer screen. You don't have to deal with contractors, determine what's needed for the property, or discuss zoning regulations.

You just have to make the investment and watch the returns build up.

(Photo by Images Money)

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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