I just got done writing a comprehensive Amazon ebook on real estate crowdfunding and to be quite honest, I think that this is the way of the future.
Rather than investing in a REIT or managing a real estate property yourself, you’re now able to invest in a particular property or opportunity from an online crowdfunding portal.
How cool is that!?
Also, many of these websites have a very small minimum investment requirement because you’ll be contributing capital among many other investors.
I’m so excited about what this means for investors, that I decided to make a youtube video on the topic, which I’ll include down below.
In the YouTube video, I talk about choosing the right platform or website, whether or not you’re qualified to invest in this type of asset, setting realistic expectations, and different business models in the industry.
Where will the “passive” income come from?
The reason that this is a passive income source is that you aren’t actively managing the property. Therefore, your income or investment return is not directly proportional to your time.
Depending on the website you choose, you could be investing in debt or equity deals and you’ll receive dividends, cash flow, or payments on a recurring basis.
Of course, it’s important to choose the right property, but many of these crowdfunding websites are curated. Therefore, they’ll have already done some due diligence on the sponsor or developer who is offering the investment opportunity.
How do I know this is “legit?”
Well, it is 100% legal. There are many platforms operating out there where you can browse these types of opportunities. I mention a few in the YouTube video.
However, I think the right question is whether or not this is for you. The only way that I think you’ll figure that out is to dig a little bit deeper and learn what this whole industry is about.
Therefore, I put together some free resources to get started!
1. How Patch of Land and Crowdfunding Works in 2016
2. How Real Estate Crowdfunding Works
3. Real Estate Crowdfunding For Beginners
On these podcast episodes you’ll hear my conversation with a few different industry leaders. They’ll answer many of the questions that I’m sure you have about investing in real estate online.
I also wanted to deliver some premium content on this new vertical. That’s why I spent several months putting together a set-by-step guide on real estate crowdfunding.
In the guide, I cover:
1. The Growing Real Estate Crowdfunding Industry
2. The Regulatory Environment
3. Real Estate Crowdfunding: Tips for Investors
4. Real Estate Crowdfunding: Tips for Sponsors
5. Industry Leaders Weigh In
6. The Future of Real Estate Crowdfunding
7. How to Start Your Own Real Estate Crowdfunding Platform
To be quite honest, I don’t think that this is for everyone. I think that you need a bit more appetite for risk than the average investor and have to want to try out a new asset class.
On the flip side, there are great returns to be had, particularly for those investors that get in early and really take the time to understand this new arena.
Some publications do think or hint that this is a fad, but I don’t and here’s why.
New behaviors, like a sudden urge to buy Beanie Babies, adopt a certain fashion style, or play a certain card game can register as a fad because the consumers are taking actions that are starkly different from what they used to do with their time.
But, real estate crowdfunding is simply a new investment opportunity. Developers and sponsors are already managing real estate properties. Investors are already looking for real estate deals and opportunities. Real estate crowdfunding just brings the entire process online.
Ecommerce has exploded because it’s taking a group of consumers who already engage in a particular behavior, in this case it’s buying things, and simply bringing that process online.
The same can be said of this new industry. It’s bringing an ancient and archaic process online.
I’m curious though, what do you think? Let me know in a comment down below or on my youtube video!