If you read our latest post, you’re aware of just how big an opportunity crowd funding real estate investment is.
Since 2015, nearly $2.5 billion has been invested into opportunities only wealthy individuals and large corporations could have participated in prior to the passing of the Jumpstart Our Business Startups Act.
With minimum investment requirements ranging from $1,000 to $25,000, more people are flocking to invest with platforms run by companies at the forefront of this growing source of equity and debt financing.
And there are companies operating online investment platforms with successful track records you should know.
6 companies crowd funding real estate investment successfully
Fundrise is an online crowd funding platform that invests in commercial real estate projects and has been delivering investment returns beating the S&P 500. Based in Washington D.C., they’ve funded real estate projects in Austin, Texas, Philadelphia, San Francisco and Brooklyn New York.
Individual’s have invested as little as $1,000 in one of their projects through their online platform, which charges a 3% management fee.
Developers often invite them to fund projects from the beginning, bypassing traditional lenders, hedge funds and Wall Street investment banks.
Getting on the ground floor of an opportunity has led to an average 13% return on investment for each investor.
With 78,000 individual investors, $196 million invested and $30 million paid out to investors, Realty Mogul LLC boasts the largest online crowd funding platform investing in commercial real estate projects.
They’re minimum investment is $5,000 and, depending on the real estate project, could either charge a management fee or participate alongside investors for a share in the profits.
One of the advantages they boast for investing in their funds is the ability to make 1031 exchange transactions feasible for real estate investors that want to avoid paying capital gains tax on investment property sales.
Individual investors can invest as little as $5,000 in any of the many commercial and residential real estate investment opportunities listed for funding on Realty Shares online platform.
And with a management fee of just 2% charged to investors, they are the fastest growing crowd funding real estate platform in the United States.
Crowd Street offers the broadest real estate investment funding options on their online platform. They invest in Multifamily, Medical Offices, Senior Living Facilities, Industrial properties and more.
They charge no fees to individual investors who join their platform. However, the minimal investment is $25,000 on any of the projects they fund.
Because of the initial size of the minimum investment, their operating costs are low which enables them to fund projects with a stable pool of investors.
While other real estate crowd funding platforms believe in geographic diversification, Prodigy Network only funds opportunities in Manhattan’s commercial real estate market.
They invest primarily in luxury residential rentals and condominiums.
What also differentiates this platform from others is how they raise money to acquire and re-develop properties in-house versus funding real estate projects proposed by other developers.
Like Crowd Street, their minimum investment is $25,000 in any of their online investment funding opportunities.
Patch of Land is another unique online investment platform that focuses on a specific segment of the real estate market: Fix and Flip.
With as little as $5,000, and no management fee, an individual can choose to invest in any number of funding opportunities that purchase loans used to finance properties to rehab and flip in a sale.
Focusing their investment funds on buying mortgage notes give this online platform’s investors high returns with each property serving as collateral.
Are you ready to think BIG!
You should be.
Crowd funding real estate through online platforms have taken off and are quickly replacing traditional investment financing. real estate taken by
Individual investors are flocking to these platforms in droves because they want the chance to invest in large-scale real estate projects without the risk of loss that comes with being a lone investor.
Plus the liquidity these online platforms offer make it easier to get out of an investment when you’re ready.
What do you think of the funds mentioned? Do you see an opportunity to start a funding platform in the markets you already work in?
Think any of your clients could be interested in investing in real estate like this?