What do you really know about real estate equity crowdfunding? There are a lot of aspects that you need to be aware of in order to grasp a full understanding. That is what we are here for. Welcome to Luxe Crowdfunding. We want to make sure you understand how crowdfunding works and how you can take advantage of this great opportunity. You can count on us, as we are one of the best crowdfunding sites for investors in the United States.
It’s A Great Industry To Get In!
Did you know that real estate did not even exist seven years ago? Today there are over hundreds of crowdfunding sites that are raising money, not just for real estate. Real estate crowdfunding accounts for over $2.5 billion of the $7 trillion commercial real estate markets in the U.S. For being such a new industry, that number is quite impressive. Over 100 real estate crowdfunding companies offer investments in all types of real estate including commercial, residential, retail, multi-family, and more.
Real estate crowdfunding allows small investors the opportunity to diversify their portfolios with real estate. This is something that was hard to do before because the cost of entry was so high.
How Does Real Estate Equity Crowdfunding
Generally, developers don’t have enough money to fund the entire development or project. They will need to acquire a loan and make a down-payment. The developer will often want to partner with people to fund the down payment in exchange for a percentage of the ownership. They do this for a variety of reasons.
First, they may not have enough capital to make the down payment themselves. The other reason is because they may want to do multiple deals at the same time and spread their money out for diversification. Regardless of the reason, they need money. Generally, they will approach their friends, family, and other relationships to ask for money in exchange for a portion of the ownership.
Let’s say that they need $5,000,000 to close the deal, but their personal and professional network can only fund $3m. They are $2m short. So, they turn to a crowdfunding platform and pitch them the deal. If the platform likes the deal, they will commit to raising the capital.
Now, the platform takes the information and puts it on their platform. There are some paperwork and legal work that has to be in the background, but we’ll gloss over that because it’s behind the scenes. Now, the thousands of investors on their platform can take a look at the deal and potentially invest. Once the goal has been met, the platform goes back to the developer and puts the money toward the down payment and receive a part of the ownership. Then, the platform turns around and splits that ownership to the hundreds of investors that are involved.
Call Us For The Best Crowdfunding Sites for Investors
If you are interested in learning about real estate equity crowdfunding or even want some information on its advantages, be sure to call us today! We are one of the best crowdfunding sites that have advice on how to invest in real estate online. Here at Luxe Crowdfunding, we are entirely here for you. Our commercial real estate crowdfunding experts have the best expertise in the United States. 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 offer the best crowdfunding sites for investors in real estate in the United States.