Real Estate Crowdfunding

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Has anybody heard anything about or have experience with real estate crowd funding?

We have had experience with some of our SDIRA clients interested in crowd funding real estate (and other investment types). The key is to ensure there is some amount of legal claim (trust deed) backing your investment

There are a variety of great threads here on Bigger Pockets regarding Real Estate Crowdfunding (search by keyword). It is certainly a new way to finance real estate investors' needs, and will define the future of fundraising. Because of the size of the topic I highly recommend reading those threads and also doing some research online by visiting the sites of some of the established sites like Fundrise, RealtyMogul, Asset Avenue, RealtyShares, PeerRealty, Prodigy Network, RealCrowd.

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It's worth noting that most legitimate crowdfunding platforms require you have some demonstrated experience in order to solicit funds.

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Originally posted by @Joshua McGinnis :

It's worth noting that most legitimate crowdfunding platforms require you have some demonstrated experience in order to solicit funds.

 Thanks Joshua for this great piece of info

Originally posted by @AdaPia DErrico :

There are a variety of great threads here on Bigger Pockets regarding Real Estate Crowdfunding (search by keyword). It is certainly a new way to finance real estate investors' needs, and will define the future of fundraising. Because of the size of the topic I highly recommend reading those threads and also doing some research online by visiting the sites of some of the established sites like Patch of Land, Fundrise, RealtyMogul, Asset Avenue, RealtyShares, PeerRealty, Prodigy Network, RealCrowd.

Thanks AdaPia your input is greatly appreciated.

Originally posted by @William Bray :

We have had experience with some of our SDIRA clients interested in crowd funding real estate (and other investment types). The key is to ensure there is some amount of legal claim (trust deed) backing your investment

 Thanks William

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Keith, with over 100 sites of varying quality I initially was overwhelmed. I spent 3 months doing due diligence and interviewing other investors to create a top 100 ranking and reviews of the top 20. Even among the top 20 there are significant and important differences. The best choice depends on your unique situation.

Medium oneIan Ippolito, The Real Estate Crowdfunding Review | http://www.therealestatecrowdfundingreview.com/

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There are a few things in there to unpack.

Real estate crowdfunding is not new, per se. It's the syndication model brought online. There are efficiencies to it and a new ability to find opportunity outside of your personal network that this brings, though.

However, I generally don't consider accredited-investor options such as Fundrise to be crowdfunding at all. I think of them, as I said about, as syndication platforms. I've always felt like crowdfunding is best defined as granting unaccredited investors access - so everything happening at the intrastate level or more recently under Title 3.

These markets are emerging more slowly but are generally more flexible and more cost effective to raise on, as well as carrying lighter regulatory burdens. As someone said, there are TONS of them, but at the intrastate level there are rarely more than on or two in the real estate space per state (we're the only one in Texas.) I would encourage anyone looking to raise funds to look outside of the big-name national syndicate sites and focus on reaching out to their intrastate portals. (Title 3 has some major issues that will probably make it slow to become a viable option for most people.)

What might be new (3 years old at this point) is the ability for start ups to raise money with certain constraint that gave birth to some of the online crowdfunding real estate financing firms. 

Thanks

Tim

Hi,

Real Estate Crowdfunding is an online pool of capital frominvestors.RE crowdfunding connecting investors to professionally managed commercial real estate investment opportunities.There are a lot online Campaigns, which are specialized in real estate Crowdfunding such as Realty Mogul, iFunder, Crowdstreet, Patch of land and more. These Crowdfunding campaigns makes real estate investing easier for investors.

Thanks!!

I've invested in 4 commercial RE equity deals; 2 each via Realtymogul and Realcrowd. So far so good on the cash flow (knock on wood) but nothing has gone full cycle (started investing mid-2014). Both sites were very diligent about verifying my accreditation as well. I've signed up w/Crowdstreet and Fundrise but haven't invested w/them yet (no specific reason other than timing and avail of my cash). Fundrise and Realtymogul invest alongside the LP's (and/or Fundrise pre-funds the sponsors) so in theory those 2 platforms would be that much more diligent about vetting the opportunities. Realcrowd is strictly a go-between that introduces investors to sponsor opportunities (sponsor compensates RC when investor signs on) but of course it's also in their best interest to thoroughly vet the offerings or they'll lose credibility. To date the comm with the sponsors I invested with via RC has been good. Fundrise is promoting an E-REIT that looks intriguing to me as well and each time they open up for new funds in recent weeks, they sell out very quickly. 

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My only investment to date has been with RealtyShares in January of 2015. It was an equity deal that somehow didn't go as planned. I'm not sure of the specifics because they weren't provided to us by RealtyShares, but basically the Borrower decided to not pursue the project after it was initially funded. So after like 60 days or so, RealtyShares returned our investment plus a small portion of interest. For me it was $68 interest. So now I have a K1 that my accountant has to deal with for just $68 in profit...before taxes. Of course, it could have gone much worse, but I definitely learned the hard way from the get go that nothing is risk free!