Prior to real estate crowdfunding opportunities, investors could not access real estate debt investments and equity. However, in April 2012, President Obama signed the legislation known as the JOBs Act. With this legislation, the evolution of real estate crowdfunding has been dramatic. Today, investors have access to many deals, each with unique structures.
Unfortunately, many investors do not have a full understanding of the differences for deals, structures, and platforms. To understand the differences, you should start by learning what the top real estate crowdfunding platforms are. From there, you can research different opportunities according to your objective for investing.
Key Real Estate Crowdfunding Sites
PeerStreet – For real estate-backed loans, this is a top marketplace for investing. Using this site, you have the ability to analyze opportunities, underwrite sponsors, review deal structures, and use algorithms for proprietary understanding to automatically allocate them into loans fitting specific parameters. By taking an automated approach with PeerStreet, you have a safer and fixed rate of return as an investor.
Acquire Real Estate – This real estate crowdfunding platform is for accredited investors who co-invest and pre-fund only in quality institutional deals. Best of all, interests align with a certain level of comfort that is impossible to find with other platforms. Because of limited liquidity, you will need to be patient. However, using this platform will pay off.
RealtyShares – This online marketplace offers you access to small balance deals in real estate for both secondary and tertiary markets. As one of the oldest of the crowdfunding sites, you are provided with access across capital stock on a fund and deal-by-deal basis. If you have knowledge of real estate and want to access equity, debt, or preferred investments in sub-institutional deals, this would be a worthwhile consideration.
Fundrise – To offer investment opportunities in real estate, Fundrise uses cutting-edge technology. With this site, you have direct access to opportunities and pay lower fees. As a result, you can expect better returns on your investment. In addition, you are provided access to a portfolio consisting of properties that produce low income at a low cost.
RealCrowd – Another one of the top real estate crowdfunding sites, RealCrowd makes it possible for you to invest in high-quality commercial properties by working directly with expert sponsors. What makes RealCrowd an excellent choice is that it offers a technology platform.
CrowdStreet – This investor acquisition and management solution is quite comprehensive. In fact, it was designed specifically for the commercial real estate market. Also offering a technology platform, CrowdStreet focuses on bringing quality operators and accredited investors together.
The bottom line is that if you want to invest in real estate by using a crowdfunding site, make sure the model offered is what you actually need. In addition, be sure you have the required expertise to compare different opportunities. You also need to trust your sponsor and know your risk tolerance, as well as hold period.