Commercial Real Estate Through Crowdfunding
Real estate crowdfunding is a relatively new way to invest in commercial real estate. It provides a lower entry barrier for many individuals, allowing them to participate in the same type of real estate deals that previously required an institutional investor. Investors can opt to invest in a single property or a portfolio of properties. This means that they can diversify their assets while enjoying the benefits of passive income.
There are several online portals available to investors seeking to enter the real estate marketplace. However, choosing a crowdfunding real estate websites platform can be a tricky decision. You need to determine what types of investment opportunities the platform offers and evaluate the professionals that work for the company. Some platforms are well-suited for investing in residential or multifamily buildings, while others do not. A good choice for a first-time investor is one that has a strong team of experts in the field.
Investing in real estate has traditionally been limited to those who are accredited and have at least $200 thousand in personal income. But with the advent of the JOBS Act, non-accredited investors can now take part in the real estate crowdfunding industry. Many investors are able to choose to participate in co-investments with other investors, and some are even willing to contribute as little as $10.
Investing in Commercial Real Estate Through Crowdfunding
The key to successful real estate crowdfunding is to select a platform that has been tested and vetted by seasoned real estate developers. Most of the most prominent platforms have a reputable team of real estate professionals who are able to vet real estate deals before raising funds online. Other important factors to consider are the number of assets available, the location of the properties, and the asset classes offered.
In recent years, major commercial crowdfunding real estate websites sponsors have entered the real estate crowdfunding arena. These companies have created a variety of investment opportunities for everyday people looking to invest in high-quality real estate. They have also provided a new avenue for investors who have been priced out of the market.
One of the most popular ways to invest in real estate through crowdfunding is through equity investing. Typically, equity investments involve a specific property and the shareholder is entitled to a share of the appreciation value of the property upon its sale.
Another method of investing through crowdfunding involves rental income. Investors collect rental income by a variety of methods, including lease payments, or rents paid by tenants. Depending on the nature of the property, investors may be able to generate returns by purchasing shares in a real estate syndicate, by purchasing a piece of an existing building, or by selling their stake in the project.
The JOBS Act has also led to the emergence of eREITs, or electronic real estate investment trusts. EREITs are similar to traditional equities, except that they are issued by a company that specializes in real estate. Since eREITs usually have lower thresholds, they can offer a greater diversity of investments than traditional real estate companies.