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Photo Credit: Jimmy Chan

Can You Make Money With Real Estate Crowdfunding?

As interest rates rise, a new type of financing is beginning to emerge. Real estate investing is for the bold. When an obstacle presents itself, you immediately start looking for the workaround. Rising interest rates and a reduction of inventory are affecting the current market, but the speculative minded among us know: There will always be opportunities to buy low and sell high.

Even though Kickstarter is a relatively recent development, Crowdfunding is by no means a new incentive. If you think about it, institutional money is an example of crowdfunding. Asset managers have billions of dollars on hand. This money comes from a “crowd” of speculative investors, hoping to see their cash multiply. Now imagine this with regards to real estate. Participating in a crowdfunded REIT (Real Estate Investment Trust) for example, allows you to have partial ownership in much larger structures than you might have believed possible.

A few websites I found (Not Endorsements)

Realty Mogul
This site is well designed, but I’m not too crazy about the fact that certain information is withheld until they capture your e-mail address. It immediately makes me wonder about the fine print. RealtyMogul specializes in larger, multi-unit or commercial properties. The only have 8 offerings currently, but that speaks to their level of risk tolerance. They also show what stage of funding the properties are in.

Crowd Street lets you know from the beginning that they are seeking a $25,000 minimum investment. That saves everyone time. They also have quite a few success stories, and are up front with the yield potential. CrowdStreet also seems like they are somewhat conservative, with respect to the amount of properties they have available. Being selective is key in this market.

This company does sheer numbers, due to the fact that they also consider the beginning investor. Some people have money, and simply don’t know what to do with it. Investing in a real estate trust of some sort can be beneficial. FundRise is straightforward about their good and bad quarters. That suggests to me that they are a little more sales oriented, but that creates opportunities for the uninitiated. They require your e-mail address, pretty much before they disclose anything… so read the Terms of Service CAREFULLY.

Each of these sites made the list because they have links to an education area. Before pulling the trigger on any financial decision it is imperative to get educated on the subject. These sites provide great resources (albeit casting themselves in a favorable light) for early investors to find out about what they have to offer, and the market overall.

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