I am interested to invest to real estate crowdfunding projects, anyone could share experiences for how to manage risks to invest in real estate crowdfunding project? and which real estate crowdfunding site has good reputation to protect investor's investment?
Every investor has different priorities, but here are a few important things to look at:
Background of the sponsor - is it a large real estate developer, a smaller company, or a one-man-show? Obviously many smaller sponsors can bring forward good deals; however, if you can literally find no information about the sponsor online; it's not a good sign.
The crowdfunding platform's management team - operating a real estate crowdfunding portal requires knowledge of at least two separate disciplines: real estate and securities law (and hopefully tech knowledge as a third discipline). These are securities we're dealing with, so even the best deal can blow up if the proper compliance measures aren't in place.
Types of portals - some platforms focus on equity deals, while others have primarily debt offerings. Some platforms perform due dilligence on deals prior to listing them, while others are mainly marketplaces that allow developers to list deals themselves.
As far as specific platforms, I'm obviously biased since I work for one, so I won't hype my own. I will say that Fundrise and Patch of Land are two highly regarded platforms.
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