Have you invested in any RE Crowdfunds?

Question

I'm looking to invest equity from a sale of investment property.  I'd like to get 9-10% return.  I'm thinking about crowdfunds.  Has anyone invested in crowdfunds?  If so, which one, and how did it go?

Jillian Sidoti · Answer

Yes. Tons. I also invest in non-real estate crowdfund deals. I also invest in real estate through syndications and funds.

I have invested in the following platforms: Crowdstreet, Realty Mogul, Fundrise, and Groundfloor.

It really depends on what you are looking for. Probably the most consistent has been Fundrise in terms of returns and reporting. I have not invested on CS in a while and don't intend on it. The deals on Groundfloor have become, for me, a little thin and uninteresting.

Taylor L. · Answer

I prefer to invest in syndications with sponsors who I know, who have proven track records and a strong history. The operator is such a critical part of any real estate syndication, investing the time and energy into getting to know the best sponsors is worth it in my opinion.

Ian Ippolito · Answer

To back up a second: platforms like Crowd Street are really like a Craigslist and don't actually sponsor any of the investments themselves. All they do is create a place where you can see the deals that are out there and then you can choose what you like. Then you go ahead and invest with that sponsor (which is where you spend 99% of your time).So, if people tell you their investment experience on investment XYZ they are 99% talking about their experience with the individual sponsor they happened to pick (as CrowdStreet is just a very temporary middleman at the beginning).To put it another way: crowdfunding is essentially the same as old-fashioned syndication...except it's done on the Internet. And experience varies widely depending on the particular sponsor that's picked.Having said that, in my opinion, CrowdStreet has by far the largest diversity of deals to look at. For example right now you might go there and find 10-30 or so deals. And they continually bring in new ones. I'm a very conservative investor. So it's very rare for me to find a sponsor that I like. I may go through 100 investments a month and in the end only pull the trigger on 5 to 6 in the year. So CrowdStreet isn't likely to have many deals that are for me personally. On the other hand, an aggressive investor will probably be overwhelmed with all the deals that look good to them at a place like CrowdStreet. And someone who is in between will probably have an in-between experience.On the downside: quite a few older investors have complained about CS's customer service in the last year. CS claims they were overwhelmed by the growth and are staffing up to address this. So we'll see how that shapes up.

Account Closed · Answer

I'm currently invested in a tiny home project on Buy the Block, a small crowdfunding platform based in Denver, CO. I think that CFing for real estate can be an option for most "retail investors" who don't want to have large 25,000 entry points. Just my opinion.

Carole G. · Answer

Thanks @Ian Ippolito, but I wan't really asking for the best one.  I'd like to know people's experiences with the main ones out there, like Crowdstreet.

Ian Ippolito · Answer

Carole, every investor has a different risk tolerance, comes from a different financial situation has different financial goals. So in my opinion there is no one crowdfunding site for one crowdfunding sponsor that's going to be "the best" for everyone. I would recommend starting with one of the platforms with a large amount of volume such as Crowd Street. Then you can get a feel for the different types of deals that are available.Like in all investments, returns are dependent on risk and you can find a wide range of returns and projected returns. So the higher return you're expecting, the more risk you will need to take (and vice versa).  Good luck.

Have you invested in any RE Crowdfunds?

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