As a beginner in real estate investing I am seriously considering crowdfunding as my starting point. I am lucky enough to have some capital to put into real estate but being in Southern California and new to investing my options are limited. So Cal is not the ideal buy and hold area from what I have been researching.
Obviously being a beginner I am in no position to be a flipper in a tough So Cal market with a full time job already. I was hoping to get some users opinions on crowdfunding and the fact that it potentially offers a mulitude of deals in different areas for an investor.
I realize a real estate investment is only as good as the investor makes it through due diligence but if crowdfudning is anything close to the hype where would a beginner start in researching deals?
Any replies would be greatly appreciative thank you!!
I do not trust other people to invest my money. There are just too many ways for things to go wrong.
There are quite a few real estate crowdfunding sites that enough capital and talent that you can trust them with your money. (you can search this site and get a good handle on the top 4 or so you can trust) Once you identify the trusted crowdfunding platforms, you have to get comfortable with the developer/sponsor and then lastly the deal itself. Don't forget to take into account not only platform fees, but sponsor fees.
I made over 50 crowdfunding investments over the past 14 months and 90% are on target, 2 have far exceeded expectations and one is struggling, but I do not expect to lose any money even on the one poor investment.
You can test the waters with a minimum investment and then do more as you gain confidence. I would suggest starting some of the 12% 6-9 month debt offerings or maybe a fund that is diversified.
Here is a good thread for you to checkout.
@Jeremy Roll also might be helpful
Ryan i found a company. Let me know if interested. [removed email address]
I had the same question the other day. The best guy by far for Private money is Alan Cowgill his site is: http://www.privatelendingmadeeasy.com and he just came out with an eBook for crowdfunding - http://www.privatelendingmadeeasy.com/crowdfunding...
Alan is the only one I know that has taken all his information to an SEC attorney and has his SEC attorney on speed dial for students.
Disclaimer: I have partnered with Alan in the past and he has sold products into my list. We are business associates and personal friends. We were introduced through a mutual friend and mentor Ron LeGrand.
That being said his materials are very good.
Hope that helps,
@Ryan Cauzza , there are advantages and disadvantages to going the real estate crowdfunding route.
Advantages: much less risk and greater diversification. If you have $50,000, you might invest that in a single direct real estate investment. However, with real estate crowdfunding, you can split that into several investments. This protects your portfolio better from a single bad incident wiping the whole thing out. Additionally, you can access real estate classes that perform better, but that are probably beyond your purchasing power if you bought them directly. For example, not too many people have a few million dollars to purchase an apartment complex, but many people can put $5000 or $10,000 into a crowdfunding investment for the same thing. Finally, you don't have to manage the investment directly yourself once you make it: so it is a passive investment.
Disadvantages: it may be difficult for you to give up control to someone else, in which case it would be better to do something with direct real estate. You have to be comfortable evaluating whether other people will do a good job or not, in addition to the investment opportunity, which you may or may not be willing to do. Also, currently there aren't any real buy-and-hold strategies available on the crowdfunding sites. So if you're looking for that, then it might not be the best choice.
Hope this helps and if you have any other questions just let me know.
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