I've never used a crowdfunding site before and this will be my first investment property. Just trying to understand the specifics. I'm looking into purchasing a SFH in a local college town that needs to be rehabbed and perform a BRRRR with it (Buy, Rehab, Refinance, Rent and Repeat).
I know that when you apply on these sites they want to know the rehab cost estimates a little bit about the property, on Patch of Land's site for instance they say they do an appraisal... How exactly do I find a property, get a contractor or 2 to provide estimates, submit my application to the crowdfunding site, wait for approval and submit my offer within a reasonable amount of time? Homes with good value disappear in the blink of an eye. Even if these sites can close on a deal in 7 days I'm sure that I'm missing something here in the process.
You're going to have to get a property under contract with a long enough time to do all the things that the crowdfunding website will ask of you.
Typically crowd funding websites have minimum loan amounts so make sure that your property is above this minimum amount.
Something else I would look for are private money lender or equity partners.
They'll be much easier to work with and can also lend you future funds on your deals without all the paperwork and hassle.
@Antoine Martel How exactly would I get a property under contract without having the loan approved yet? I was told by an agent that I needed proof of funds before I could submit it
You'll have a hard time getting funded by a crowdfunding platform. And yes you'll have a hard time getting a property in contract without proof of funds.
The crowdfunding platforms will want to see your track record before they even consider evaluating your deal. Even if you have a great deal, if you don't have any experience they won't even consider you and even lenders will think twice before lending you any money if you don't have at least 30% of your own money to invest.
Sellers don't want to have their property off the market and tied up in a contract with a buyer that may not be able to close the deal. And if you do get a property in contract but don't close you'll lose your deposit.
If you have or can come up with the 30% of the cost of your project then find a lender that can give you a pre-approval letter to shop with. Close 3-5 successful deals before you apply for crowdfunding.