Crowdfunding REI
@Mohammad Sheatt, Yes I have invested with several sites. Before doing that, I ranked the top 100 sites, and then did deep reviews of the top 25. I also interviewed investors to see which ones they liked and didn't like. If you have any questions, let me know.
@Ian Ippolito Thank you. have your investments delivered the promised return? any problems you had? which ones did you invest in?
Yes, mine have but that is not the case for every crowdfunding investor. Several different investments have experienced defaults, or not paid back on time, or only broke even and not given the promised return. I've written about what investors have reported on each review of each site. It's important to do your homework on the platform. And then you have to do your homework again on each individual investment.
Right now, I would estimate about 95% of the investments out there are doing fine. However, if we get into a recession and the real estate cycle experiences a downturn, I will expect that number to decrease significantly. Personally, I'm only investing in very short investments (one year) and very long investments (more than 5 years) that are riding long-term macro trends that will last a decade or more. In my opinion, the middle term investments in the 2 to 5 year range are too risky, due to the risk of a downturn.
I personally have great reservations about one of the sites you mentioned: Fundrise, due to the enormous changes that have been going on over the past several months, which I have written about in detail. (No more individual investments, forcing investors into a structure with gigantic fees, and huge investor dilution, etc.) They used to be ranked number 2 but are going to be downgraded when I get a chance to upgrade the ratings. In my opinion, the other 2 sites you mentioned are solid choices. And before narrowing your choices down to one or 2 sites, I would recommend 1st looking at the entire universe and finding out which ones might be appropriate for your investment goals.
@Ian Ippolito Thanks for this reply to @Mohammad Sheatt's question, especially with updated info since your last official writeup of the top crowdfunding sites. I am very interested in this model, mostly because my husband is very interested in it. I still have my heart set on some rental properties eventually, but I can also see the value in crowdfunding as a general diversification of our overall investment portfolio. I may try this route while I get educated enough to convince my husband to do something we have more control over.
Maybe @Sterling White should talk to you about getting his company reviewed for your spreadsheet! :)
@Jennifer King, My pleasure. As a note, I may also be downgrading Patch of Land due to the increasing loan-to-value ratios (meaning increased risk) without (in my opinion) enough increased return to justify the extra risk.
I think the best approach is to do both: have some rental properties that you can control and provide steady income, and then boost your return with crowdfunding investments. At least that's what I do.
"Some of each" sounds like a reasonable goal, @Ian Ippolito! Thanks again!