What's the best Crowd-funding site and why?

Question

I am considering crowdfunding while I am in the accumulation phase for my next turnkey investment. I read that I can get in as low as $1000 and hold times are often only 3-6 months. Who had experience and what platforms are the best.

If you can add why it would make my day

Thanks

If you can add why it would make my day

Thanks

Axel Meierhoefer · Answer

Hi @Ian Ippolito and @Steve Powers

Thanks for your help. I have read the 100 best review and am signing up with Peer and Realtyshares.

Steve, thanks for the narrowing down on the short term loans.

I am working on a bridge between turnkey SFR investments. Whenever I am in the accumulation for a another downpayment , I think these platforms can be a good option versus keeping money in a savings account.

Ian Ippolito · Answer

@Dr. Axel Meierhoefer,  I have invested in several sites, and also did a comprehensive review of the top 100, including interviewing other investors using those sites.

There is no one best site, as they are all completely different, and it depends on your needs.

In general, investing in real estate is not a short-term investment.  The average projected hold for an equity investment is five years.  The average projected hold for a debt investment is one year.

And the thing is, any real estate investment can run late if there are problems.  And you also always have the ability to lose some or all of your principal.

So if the idea is that you will need the money on a specific date in the very short term 3 to 6 months, real estate is not the ideal way to hold it.

Having said that, there is one site that has short term debt that you are projected to  redeem in 3 to 6 months: Perrstreet

Essentially, they put you in typical debt, but then give you the potential option to cash out early in exchange for a higher fee/lower yield. The company itself provides the liquidity.

Of course, even this isn’t guaranteed because  there is a mismatch between the investment features and what the underlying investment’s capable of doing which the company is compensating for. If we went through a severe recession, and the company were to come under stress, you may or may not be able to get back your money as planned, or might lose principal.

So maybe this might be useful for you. But if you absolutely have to have your money available at a certain time, and can’t lose principal, I would recommend putting it into a CD instead.

Ian Ippolito · Answer

Hi @Steve Powers, I was actually referring to the 30 day notes you mentioned (and obviously not doing a good job of describing it)! As long as Peerstreet is doing well as a company and there is no downturn causing significant stress on their portfolio, they should theoretically have enough spread to be able to honor their commitment to provide liquidity in 30 days (and make a profit for themselves).  If either of those changed significantly in the future, investing in these could become more risky and could end up with loss of interest/principal.

Axel Meierhoefer · Answer

Hi Lane

Thanks. got it

I did and also reviewed the top 100 curated by a BP member. IUt's not my real estate investing strategy, I am looking to use ti as supplementation for putting my funds to use, especially when I don't have enough yet to purchase a property. (accumulation phase)

Lane Kawaoka · Answer

@Dr. Axel Meierhoefer Crowdfunding sites are like investing retail. You are paying for the convenience most reputable syndicators won't use them because of the heavy fees.

Google a variety of Crowdfunding ranking sites.

Steve Powers · Answer

I would agree with Ian that PeerStreet is an excellent choice. Most loans offered are around a 12 month term but because many borrowers are Fix and Flip developers often pay off before then. I personally seek out raises offered by Knock Homes on the platform as they are an institutional developer and reseller of homes started by 2 founding members of Trulia and backed with $35mil in VC.  In my portfolio, loans by Knock often payoff in 1 to 5 months yielding 7 to 7.25% APY.PeerStreet is also the only platform I've found that offers 30 days notes yielding 3% APY for those requiring maximum liquidity. These are raises the PS funds and keeps as portfolio loans and pays out with interest in 30 days regardless if the developer pays or defaults. In exchange for this PS guarantee, the company keeps a much larger spread of the loan rate hence only the 3% APY return.  I use this program in lieu of CDs which most banks are only paying 1 to 2% APY and at much longer terms.Ian, I am not familiar with an option to cash out early on PS. I looked through their FAQs and could not find any link or topic on the subject. If you can post where I might find more information on their site, that would be much appreciated.

What's the best Crowd-funding site and why?

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