Online Real Estate Crowdfunding: A New Way to Invest in Real Estate
Real estate developers who are unable or unwilling to follow the traditional funding route are increasingly turning to real estate investment crowdfunding. This method is also gaining traction among investors as a low-risk way to enter the real estate market or expand their existing portfolios. Consequently, there has been a rise in online platforms specializing in real estate crowdfunding, making the entire investment process more efficient, expedient, and cost-effective compared to traditional financing methods.
While there are upwards of 100 companies specializing in online real estate crowdfunding, here are six companies that are making waves in the industry.
Fundrise
Vowing to cut out the middleman, Fundrise offers low-fee diversified real estate investment directly to anyone through its online platform. With 130,000 members and nearly $4.9 billion in real estate investments, Fundrise touts that its investors impressively earned a weighted average return of approximately 9.47% across all investments during 2019.
RealtyMogul
Designed to serve both accredited and institutional investors and real estate sponsors and borrowers, RealtyMogul is an online capital marketplace for real estate. Investors gain access to hard-to-find, pre-vetted opportunities using a reputable, compliant platform. And borrowers can raise capital with just a few clicks.
CrowdStreet
CrowdStreet is a software and services company that enables accredited investors to access institutional-quality commercial real estate no-fee investment opportunities. Additionally, borrowers can find new and repeat investors, raise capital faster and manage investors from their own private marketplace powered by Crowdstreet.
Groundfloor
Groundfloor claims to be the only real estate lending marketplace open to non-accredited investors. You only need $10 to invest and investors have earned an average of 10%.
Patch of Land
With a global investor network, Patch of Land is committed to procuring funding for projects that are often overlooked or rejected by banks and traditional lenders. Patch of Land originates, underwrites, and services loans, offering these back to accredited institutional and international investors.
Prodigy Network
The goal of Prodigy Network is to offer smaller investors access to large real estate assets, specifically in Manhattan, which to date has been accessible to only institutions and ultra-high-net-worth individuals. Investors gain access to a secure investing portal and personalized dashboard which offers project updates, market reports, and financial statements. This allows investors to easily and confidently monitor their investments and make transactions online.
Learn more about online real estate crowdfunding platforms
With online real estate crowdfunding increasingly creating opportunities for both your real estate investment buyers and real estate development clients, it would be wise to learn everything you can about this new way of doing business.
