Are you new to the world of investing? Are you asking yourself what real estate crowdfunding is? Maybe you just need a refresher. The professionals at Luxe Crowdfunding are here to help. We know everything about crowdfunding real estate investing. Everyone nationally can trust us.
A New Path For Investors
The question we ask you as the investor is, can two disparate investment markets get along with each other without driving the other insane? We are talking about the old one and the new one. The is actually the key question for crowdfunding and the real estate market. The real estate crowdfunding site iFunding estimates that there is a combined market at $11 trillion.
Crowdfunding and the real estate market are a natural fit. In a word, crowdfunding makes use of the easy accessibility of vast networks of friends, family, and colleagues through social media websites like Facebook, Twitter, and LinkedIn to get the word out about a new business and to attract investors. Crowdfunding has the potential to increase entrepreneurship by expanding the pool of investors from whom funds can be raised beyond the traditional circle of owners, relatives, and venture capitalists.
What Is Real Estate Crowdfunding?
This fun phrase is a way to source money for a company by asking a large number of backers to each invest a relatively small amount in it. By doing so, backers receive equity shares of the company. This used to be restricted to accredited investors until 2012. This is thanks to the 2012 Jobs Act implemented in the United States. This allows a greater scope of investors to invest through crowdfunding once the better infrastructure is in place to do so. This idea may also entail obtaining debt as well as equity stakes.
What are the pros and cons of crowdfunding real estate investing? In a word, it comes down to risk for both sides; specifically, how much investors want to absorb online.
- Pros . . .
- Investors get access to the real estate market with small amounts of money.
- Investors get to work directly with real estate developers and have a voice in the process.
- Investors can choose which real estate projects they want to invest their money.
- Investors have access to myriad projects, so the choice isn’t a problem.
- Cons . . .
- The investment risks are the same as for any real estate investor. If the market goes south, an investor will likely lose money.
- The risk of investment default (from real estate developers) is higher for crowdfunding compared to peer-to-peer and direct real estate investment funding.
- A lack of liquidity, as the absence of a secondary market, restricts easy access to selling opportunities for investors.
Call Us Today
Interested in learning about crowdfunding real estate investing or even some more details about real estate investing be sure to call us today! You will never to need to ask what is real estate crowdfunding. Here at Luxe Crowdfunding, we are entirely here for you. Our investing experts have the best expertise in Florida. 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.