The Rise of Real Estate Crowd Funding

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The Rise of Real Estate Crowd FundingCrowd funding and real estate are not concepts one would immediately place together. They have an oxymoronic feel to them, and yet real estate crowd funding (RECF) is rising in popularity. Crowd funding is the generating of funds from the public, usually through the internet. This is done almost exclusively by start-up companies, small businesses and or individual people looking for aid on more personal projects and goals.
Adding real estate to the mix isn’t the most anticipated addition but it is increasingly popular. There are several companies dedicated to crowd funding in the real estate sector. Fundraise, RealtyMogul, and Crowd Street are all websites specifically dedicated to RECF. These sites, and others, make real estate crowd funding easily available an accessible. So what does real estate crowd funding entail, and who is doing it?
Essentially these investments are now publicly available which differs from the previous systems of investing. Now, the SEC still has strict regulations on RECF allowing for the most part only accredited investors to participate. There are some organizations like Fundrise who exist in states that allow people to invest individually on a local level. How these public investments work is that either a broker or an individual invest in a property offered by real estate companies. Some ask for a minimum investment of as little as $100. The properties the public invests in are commercial. They are researched thoroughly and yield high return in a short period of time. This is an ideal option for new investors, or experienced investors who would like to extend their portfolio. 
According to real estate crowd funding has increased by double between the years 2012-2013. By the end of this year it is expected to double again. “Investment types range from renovationsto distressed debt. Typically they’re cash-flowing, existing assets. Most deals require a hold of three to five years, with annualized returns of 10 percent to 30 percent— enough to double and possibly triple your money.” said real estate investor and contributing writer Vanessa Grout. The drawback to the jumping into crowd funded real estate is that these organizations are relatively new. Care into these kinds of newer investments is a must. However, as they have proven lucrative in the past, real estate crowd funding can be a wonderful investment for many.
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