There are many ways to fund your property investments, but one online method may work better for some than others. Crowdfunding Real Estate investments? Yep, that is a real financing technique, and many property investors have succeeded using it. Like any technique for raising capital, it will take a LOT of work. Likely, it will take even more work than many conventional funding efforts. However, if you have a vast network of supportive partners, friends, and family who are active online, this might be ideal for you! Bookmark this blog entry, because you will want to come back to it!

Crowdfunding Real Estate Investments? How Does That Work?

You probably have contributed to crowdfunding campaigns over the years. Remember your generous contribution to your nephew’s rock band’s Kickstarter in order to fund their debut album? How about the time you pitched in to help a friend across the country with their medical bills via GoFundMe? These one time donations end with a finite goal. While some platforms allow for beneficiaries to award perks to their contributors, you are mostly in it to help a friend. Any benefits you receive are strictly intrinsic. But we are talking about crowdfunding real estate investments here! How can a property investor get in on the action, while also rewarding those who contribute?

When Rob brought up this method in a recent Inner Circle Community call, he revealed that he has only used crowdfunded an investment once. He is also currently using this strategy for a large housing community build in Las Vegas. Experience taught him that you do not need to be accredited to engage in crowdfunding real estate investments.

You may also lower your limits for involvement using this strategy. Supporters for his Las Vegas build only need to invest $5,000 to get in on the ground floor. Until recently, the US Government limited crowdfunding campaigns to one million dollars. However, they have now set the cap at five million dollars.

Despite these advantages, there are a few notable drawbacks. There are a lot more administrative tasks involved than traditional capital funding syndication. Your books must be certified annually by a reputable CPA. Some platforms, such as Yieldstreet and Fundrise, specifically focus on private investments like real estate.

Perform your due diligence, and inspect every detail. Consider that crowdfunding will take more effort to set up than what you are used to, but if you have contacts eager to invest in your property using this method, it might be right for you.