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20+ Crowdfunding Platforms You Can Use Right Now to Crowdfund Your Way to Real Estate Wealth

3 minutes, 27 seconds Read

LOOKING FOR CASH FOR REAL ESTATE? HAVE YOU TRIED ALL THE USUAL SOURCES? Crowdfunding can be an excellent way to get non-conventional loans, raise capital, or get in on large, lucrative deals with other people. Become a Crowd FINDER and go out and get crowdfunded!

CROWDFUNDING IS A RELATIVELY NEW METHOD for people seeking funds for residential or commercial real estate. And we have a BIG list of real estate crowdfunders (also called crowdfunding “platforms”).

REAL ESTATE CROWDFUNDING CONSISTS OF groups of people donating, lending or investing in real estate deals of all types—single-family homes, commercial properties, distressed mortgages, multifamily buildings, development projects and more.

INVEST OR GET FINANCED! With crowdfunding, you can get people to put money into your real estate deal OR you can get wealthy investing in real estate projects yourself. Investments can begin as small as $100, depending on the platform you choose..



REAL ESTATE CROWDFUNDING IS EXPLODING. Today there are more than 70 real estate crowdfunding platforms. A couple of years ago, there were only 20!

Crowdfunders have generated more than $200 million in funding for real estate deals so far. And, while crowdfunding is used for many purposes other than real estate, crowdfunding for real estate may well be the hottest, fastest growing form of crowdfunding today.

Different platforms work in different ways and some focus on particular kinds of properties. One thing they all have in common is that they carefully study each deal that comes to them so that they can offer the best moneymaking projects to the people who put money into them. This process is called vetting.

IN GENERAL, CROWDFUNDING FALLS INTO FOUR MAJOR TYPES:

  1. Donation-based crowdfunding, the issuer (the person or group seeking money) receives no-repay “gifts” from the investors/donors. These are alot like small grants, so the investors/donors receive nothing in return except the satisfaction of contributing to the deal, project or business.
  2. Rewards-based crowdfunding, investors/donors usually receive small rewards like products, discounts, or a small cash return for the money they put into the crowdfunded deal.
  3. Lending-based crowdfunding, groups of investors provide loans (often at low interest rates) to the issuer and earn back a percentage of what they contribute.
  4. Equity-based crowdfunding, investors receive a share of the business or project and earn money on the profits the deal generates. This is similar to venture capital or angel money.

REAL ESTATE CROWDFUNDING IS TYPICALLY of the lending-based or equity-based type. As an example, if you need need $100,000 to buy and/or renovate a property, you can propose your project to a crowdfunding platform or company and ask for a loan. Investors can then choose to lend money to you through the crowdfunding platform. To raise $100,000, you’d need 20 investors, each putting $5000 into your deal, or 40 investors, each putting in $2500.

ON MANY CROWDFUNDING PLATFORMS, YOU NEED TO RAISE the money you seek within a certain amount of time. If you don’t reach your funding goal within that period, the deal does not go forward.

IF YOU DO REACH YOUR GOAL, the funds may be sent to you or your builder to buy or fix up the property. Then the investors receive interest payments on the money they loaned to you.

CROWDFUNDING IS EVOLVING AND CHANGING because it’s relatively new. New rules and laws are still being made which will affect how it works in the future. The main law concerning crowdfunding is called the JOBS Act (Jumpstart Our Business Startups). You’ll find more helpful information on the JOBS Act elsewhere in this issue of MWB.

CURRENTLY, ONLY “ACCREDITED INVESTORS” can put money into crowdfunding deals, but this may change. To be an accredited investor. you must meet one of the following criteria:

  • Earn more than $200,000 per year
  • Have a net worth of over $1 million
  • Be a general partner, officer, or director of the issuer seeking crowdfunding

CHECK OUT THE REAL ESTATE CROWDFUNDING WEBSITES below or contact them for more information.

REAL ESTATE CROWDFUNDING PLATFORMS

American Colonial Capital

American Homeowner Preservation

Crowdfunder

CrowdStreet

Crowdvest LLC

DiversifyFund

Equity Multiple

EquityNet

Fundrise

Groundfloor

GroundBreaker

Inner 10 Capital

InstaLend

Money 360

Mynd

Open Source Capital LLC

PeerRealty

PeerStreet

Propellr

RealCrowd

Realty Mogul

Upright

Wealth Migrate

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