Real estate crowdfunding investment opportunities seem to be popping up all over the United States, which is why so many people have become interested in learning more about them. Real estate crowdfunding presents a unique opportunity to people who would otherwise probably not be able to invest in real estate. However, before jumping into investing, it is critical that you understand how to go about choosing your first property. Luxe Crowdfunding can help you by providing tips, information, and advice to first-time investors that way they go into their first investment confident and prepared for what lies ahead.
How To Choose Your First Real Estate Crowdfunding Investment
Not everyone is able to own an investment property by themselves, which is where real estate crowdfunding can help out. These type of investments make up $2.5 billion of the $7 trillion commercial real estate market. As more investors get involved with crowdfunding the benefits and growth potential of the industry continue to increase. However, understanding the right way of going about locking in your first property is critical to ensure you’re successful.
Crowdfunding investments are broken down into two separate categories, debt and equity investments. Many experts consider the difference between these two investments, like the difference between investing in stocks versus bonds. If you choose to invest in an equity property, there is an excellent chance for a strong profit if the profit outperforms that set expectations. However, choosing a debt property has benefits because even if the project fails, the investment is secured by a lien. The difference in returns is fairly simple to understand. Equity investment returns are based on the net profits being shared, whereas the debt investments offer a fixed interest return to the investors. Deciding on an equity investment means that you’re investing in the property’s return potential that will come as a result of its rental income. On the other hand, when you invest in a debt property, you’re investing in the mortgage note that is being used to secure the property.
There is no such thing as risk-free real estate investing, which is why it is essential that you check the downside of each potential property you’re looking at. Because crowdfunding is relatively easy to invest in you may be tempted to get involved before you truly have a handle on the situation in front of you, and this could be a major mistake. It is critical that you take the time to analyze and evaluate your crowdfunding opportunity the same way you would any other investment.
When it comes to crowdfunding platforms, there are hundred available to potential investors, but they’re not all created equal. This is why it is vital that you do your due diligence to research the type of investments that are available through the platform, the fees that are involved, the minimum amount required for an investment, and whether there are any protections in place.
Contact Us For Real Estate Crowdfunding
Luxe Crowdfunding is one of the leading real estate investment companies in the United States. We provide information and guidance to our clients on real estate crowdfunding investment opportunities. Our experts will tell you the best place to start is usually with looking into multifamily properties for sale and starting from scratch. If you’re still not sure, real estate investment is for you call or visit us today to find out how we can change your mind.