If you are new to the world of investments, chances are you come across the words equity crowdfunding and debt investments quite often. At Luxe Crowdfunding, we are a crowdfunding company that is here to ensure you have all the necessary resources to be successful. We are also one of the best places to invest in real estate. We are available all across the United States.

 

Crowdfunding is the New It

Real estate crowdfunding has taken off since the passage of the Jumpstart Our Business Startups Act in 2012, and the market is expected to expand even further. In October 2015, the SEC issued its final ruling on Title III provisions of the JOBS Act, allowing non-accredited investors to participate in crowdfunded real estate deals alongside accredited investors.

 

Investing in real estate through a crowdfunding platform has certain advantages over REITs or direct ownership of property. One of those advantages is the ability to choose between debt and equity investments. Before taking the plunge into real estate crowdfunding, it’s helpful to have an understanding of how the two differ and what the risks are.

 

What Is The Difference Between Equity Crowdfunding and Debt Investments?

Crowdfunding is an attractive option for investors who want to invest in private real estate deals in a cost-effective way.

  • Debt Investments
    • When investing in real estate debt instruments, the investor is acting as a lender to the property owner or the deal sponsor. The loan is secured by the property itself and investors receive a fixed rate of return that’s determined by the interest rate on the loan and how much they have invested. In a debt deal, the investor is at the bottom of the capital stack which means they have priority when it comes to claiming a payout from the property.
      • Shorter hold time
      • Lower risk
      • Steady income
  • Equity Crowdfunding
    • Most real estate crowdfunding deals involve equity investments. In this scenario, the investor is a shareholder in a specific property, and their stake is proportionate to the amount they have invested. Returns are realized in the form of a share of the rental income the property generates, less any service fees paid to the crowdfunding platform. Investors may also be paid out a share of any appreciation value if the property is sold.
      • No cap on returns
      • Tax benefits
      • Lower fees

 

Contact One of the Best Places To Invest In Real Estate

We are the ones to turn to when it comes to investing in equity crowdfunding. If you are interested in learning about real estate crowdfunding or even some more details about real estate investing be sure to call us today! We are experts in real estate ROI. We are entirely here for you. Our investing experts have the best expertise in the United States. At Luxe Crowdfunding, we endeavor to excel in every service we provide, adding value for our investors wherever possible, and thereby succeeding nationally in the construction industry. We are one of the best places to invest in real estate.