Real Estate Crowdfunding

Category: Real Estate Crowdfunding

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Feb 24, 2021

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Real Estate Crowdfunding: The Ultimate Path To Passive Income

Real estate crowdfunding is a great way for new investors to begin their path to developing a passive income. It allows investors to earn rental income and profits from the sale of owned properties. With modern-day technology and easy access to the web, real estate crowdfunding is something that anyone can take advantage of if they are interested in increasing their income.  What is real estate crowdfunding? Real estate crowdfunding uses social media and the internet to connect investors who may have a mutual interest in investing in a common project. It is very similar to equity crowdfunding in the sense that investors can buy a property and become shareholders. Investors don't have to buy the entire property but instead can earn a portion of the profits generated from the investment. Real estate crowdfunding was originally created by JOBS (Jumpstart Our Business Startups Act), which allowed crowdfunding to aid small businesses. The SEC (Securities and Exchange Commission) has since taken off the restrictions so that non-accredited investors can invest in crowdfunding projects. This has widened the pool of investors in the real estate industry.  Who is real estate crowdfunding for? Investors of all ages can begin their path to a passive income. Whether a seasoned or first-time investor, the playing field is level. One of the most important components of successful investing is taking the time to research potential investments, giving each investor an equal opportunity for success. Conducting the appropriate amount of research determines the success that can come from each project. With easy access to the internet, research is something that any investor can perform within a matter of minutes. This makes real estate crowdfunding an easy market to dive into. What are the benefits of real estate crowdfunding? There are many benefits to crowdfunding. Due to the COVID-19 pandemic, lenders have been slower to supply funding because of sensitive financial stability. However, real estate crowdfunding gives investors a low-risk, high-reward opportunity. Platforms such as Holdfolio give both accredited and non-accredited shareholders the resources to gain more knowledge on investments. One advantage of crowdfunding is the ability to earn extra money from the dividends that are generated by the investment. Depending on the platform and the package that is selected, investors can choose to have dividends paid out quarterly or monthly. From there, investors are given the option to either reinvest their dividends back into projects or pull out the earnings as they go.Another attractive aspect of real estate crowdfunding is that many platforms allow individuals opportunities to invest as low as $500 to $1,000. This makes it relatively easy for new, young investors to enter the market. Finally, real estate crowdfunding platforms provide users with resources to learn about real estate and also browse multiple investment opportunities online. They provide a secure dashboard that allows investors to be able to manage their investments in a secure manner. What are the cons of real estate crowdfunding?  Although real estate crowdfunding can be a great source of income, there are also factors to consider in making this decision. One of the cons of crowdfunding is investor risk. There are many circumstances that are out of the investor’s control. Market volatility is likely the biggest downfall for this type of investment. Real estate crowdfunding may not be the right choice for you if you prefer to have more control over investments. Crowdfunding can also be an illiquid investment, meaning that the investments cannot be easily sold for cash if necessary. In most cases, even if an emergency situation comes up, it is almost impossible to pull out the funds from that investment. This could be a problem for inexperienced investors who might need the flexibility to access their funds more quickly.It is important each investor evaluates the pros and cons before entering a new deal. However, crowdfunding is an opportunity for investors with any level of experience to try a new line of investing. With crowdfunding, the opportunities and benefits are endless, especially if paired with the appropriate due diligence.
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Jan 27, 2021

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The Pros and Cons of Investing in Multifamily Real Estate

Investing in multifamily real estate is a smart way to diversify your portfolio. Investors find multifamily real estate attractive because it lends itself to a slow and steady return on investment. Between Covid-19 and rapid changes in politics, today’s economic outlook is uncertain and rookie and seasoned investors alike are looking for investments that will grow their capital. Multifamily real estate is less complicated than other commercial real estate opportunities and can generate a strong cash flow. Keep reading to explore the key pros and cons of multifamily investing.  What is multifamily real estate? A multifamily property contains more than one rentable unit - like an apartment complex or high-rise. Investing in rental properties, like multifamily units, is a preferred strategy for investors who want to generate an additional monthly income at a relatively low cost.   What are the pros of investing in multifamily real estate? Investing in a multifamily property holds its fair share of advantages. Large demand = lower risk. Multifamily investing is considered a safer investment than other real estate assets. Even in the face of economic uncertainty and poor job markets, people need a place to live. During an economic downturn, rental properties may see a boom as people sell their homes, relocate, or move into a rental.  Grow your portfolio faster. Investing in multifamily real estate is a unique opportunity to expand your portfolio in a short period of time. It’s a lot easier and timelier to acquire 30 apartment units than to acquire 30 single-family homes. Avoid the headache of multiple loans, sellers, and inspections by investing in a multifamily property.  Streamline your property management. Investing in a multifamily property improves daily efficiencies in your property management. By managing one property with multiple units, you save time and money traveling between properties to perform maintenance duties. Also, it makes more financial sense to hire a property manager for a multifamily property rather than a string of single-family homes.  Increase your cash flow. One of the biggest advantages to investing in multifamily real estate is the ability to significantly increase your cash flow. Investors are attracted to multifamily properties because of the predictability of income each month. In both bull and bear markets, rents are collected each month, and units are easily turned over for new leases leading to a steady cash flow. From lower risk to higher rewards and increased efficiencies in your property management, put your investment capital to work with multifamily real estate. View open investments with Holdfolio.  What are the cons of investing in multifamily real estate?  Despite the strong advantages of investing in multifamily properties, we wouldn’t be doing our due diligence if we didn’t share some of the drawbacks of this investment strategy. Increased competition. The advantages of multifamily real estate draw attention from new and experienced investors alike, creating strong competition in the market. This can pave the way for more experienced investors to crowd out the market because they may be more likely to pay in cash or appeal to sellers. Newbie investors may find luck partnering with experienced investors or joining a real estate crowdfunding platform like Holdfolio.  Higher upfront cost. Depending on where you’re investing, multifamily properties can be extremely expensive, much more expensive than a single-family home. Cost tends to be the biggest barrier to new investors, even for seasoned investors. Most banks look for investors to put down at least 20% as a down payment. However, banks are more likely to grant loans for a multifamily property than a single-family because there is less risk involved. Despite the higher upfront costs and competition, avenues like real estate crowdfunding platforms have become attractive to multifamily investors. Crowdfunding platforms allow investors to put a small amount of capital into a property to become a shareholder. Diversify your portfolio and increase your cash flow with multifamily real estate in 2021. Assess the pros and cons and seek the best investment for your wallet. Start investing with Holdfolio today. 
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Nov 20, 2020

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The Impact Of The Coronavirus on Real Estate Investing in 2021

It’s been more than six months since COVID-19 hit the country, and ever since then millions of Americans have been affected by the financial, economic, and social implications of the pandemic. From national lockdowns to financial insecurity, the real estate industry has been dramatically impacted. But, what does real estate investing look like in 2021 as we begin to gain more certainty on the path forward? Keep reading to learn about investing in real estate in 2021. The Impact Of Coronavirus On Real EstateWhen the coronavirus shut down businesses and schools across the country in March, the effects of the pandemic on real estate and investing were felt almost immediately. Tenants fell behind on rent, mortgages went into forbearance, vacation rentals were canceled, and property sales decreased. Despite the effects of a national lockdown, the real estate market has seen a rebound in the second half of 2020. In fact, home prices were up 15% year over year at the start of November and Zillow predicts that home values will increase 4.1% in 2021 due to renewed market optimism and spikes in sales this summer and fall. While the long-term effects of the coronavirus on real estate are still uncertain, rebounds in the market this fall have given investors and buyers hope for 2021. Real Estate Investing Opportunities In 2021New and experienced real estate investors may be unsure where their best investing bet lies in 2021. While there are housing booms in cities across the country, many Americans still find themselves in precarious financial situations and may not be in a position to buy a home. This poses a unique opportunity for house flippers. With lower demand in some areas, prices are driven down and the opportunity to flip houses is valuable and lucrative. Access to capital and loans may be an issue for some investors with lenders slower to give out loans at a time when many people’s finances are in a sensitive position. This positions real estate crowdfunding platforms at the forefront of real estate investing in 2021. Crowdfunding platforms allow investors to invest in real estate in a low-risk high-reward model. The initial investment is low, it’s mainly passive, and is a simple way to diversify your real estate portfolio. Learn more about real estate crowdfunding platforms for accredited and non-accredited shareholders like Holdfolio. Vacation rentals also provide a way to make some extra cash on the side. With people in between jobs or considering relocation, the demand for short-term living arrangements is on the rise. Rental platforms like Airbnb and VRBO can also be more lucrative as you charge guests more for a short-term stay versus traditional renting. Lastly, the value of apartment complexes continues to rise. With cities converting office spaces into apartments and young people looking to rent instead of buy due to job insecurity, expect multi-family investing to be on the rise in 2021. Real estate investing in 2021 may seem uncertain. But, there are many unique opportunities to diversify your portfolio with real estate in the new year. Assess your options and seek the best investment for your wallet. 

Jun 23, 2017

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Real Estate Success: 10 Professionals You Need In Your Camp

Who are the essential professionals you need in your camp before you start investing in real estate? It is important to keep up your momentum when getting started in real estate investing. Yet, you also want to make sure you are investing wisely and can enjoy a smooth process which delivers the best possible real estate success.Here are the first five professionals you need to connect with before you invest: CPA Your actual investment returns will depend a lot on taxes. There can easily be a double digit difference in what you get to keep, depending on how you set yourself up, and how you file taxes. A good tax professional can help you strategize and get it right before you wind up with a big income tax bill. Attorney Sooner or later you will want or need an attorney. It is just smart to have one already pre-screened and on call for when that time comes. You may want a specialist real estate attorney who can help negotiate contracts, and aid you in defending against lawsuits. It might also be helpful to have a family law or asset protection lawyer who can help you personally set up the right structures to grow and pass on your legacy. Insurance Agent Part of real estate success is the reduction of risk. Even if you don’t need direct property insurance to cover individual real estate assets, you will probably need an umbrella policy, life insurance, and other types of insurance to cover your assets in various areas.  Capital Partners Even if you don’t plan on needing credit or extra cash to invest, it can be wise to have relationships with these sources in advance. It will help you avoid any cash crunches or missing out on any great opportunities. This may be private lenders, mortgage brokers, or angel investors. You will also want to build relationships with bankers to make your transactions go more smoothly. Experienced Mentor Having someone you can pick up the phone and call or shoot an email to for urgent help or an experienced second opinion can make all the difference in your business decision making. Find someone who is experienced in what you are doing and who shares your values. If you plan to be an active real estate investor, make this a full-time thing, or to start a real estate business, you will also want these five people in your camp before you get going. Contractor Having a trusted contractor on call can be invaluable for fast property inspections, repair estimates, timely turnovers and getting work done quickly. Real Estate Agent Whether or not you actually use a Realtor to help buy, sell, and rent real estate, investors can find them very useful for making sense of the market, and keeping on top of evolving trends. Marketing Expert You simply can’t do it all as an investor. Even if you have a strong marketing background, the most profitable use of your time is probably inking new deals. Still, with 90% of your success relying on your marketing to secure deals, fill them with renters, and resell them, make sure you have an expert on your team. Virtual Assistant An assistant can be used to protect and free up your time so that you are getting the best ROI on every hour of the day. A good assistant can handle a wide variety of time-consuming tasks, including finding the other people on this list. Project Manager As you grow your real estate business, taking on a big multifamily property, or are building new homes to rent out, a project manager can save you time, and help things go smoothly. This could be a true project manager for a specific mission, a property manager, or a general manager for your organization. Putting some thought into what and who you need to have in your camp to be savvy and efficient will help direct you towards the path of success! 

May 31, 2017

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Preparing For This Summer’s Hot Rental Market

The sizzling hot summer rental market is kicking in. How can rental property owners be ready for it?Summer is traditionally the busiest time of the year in the real estate industry. The rental market can be flooded with renters who are motivated to secure new places before school starts again. This makes it a busy time for landlords, with a lot of additional competition. How can rental property owners get prepared and make the most of it?Market ResearchThe first step is to do some fresh market research. Do your homework on the market. What is your competition offering? What deals are being offered to potential renters out there? What are market trends? Is it a landlord or tenants’ market?VisibilityYou can’t expect to capture your share of renter leads unless they can see you. Be ramping up advertising, and reaching out to your connections and referral network to be sure they know you have units available.Provide the Right InfoIn your ads and rental listings make sure you provide enough detail for prospective tenants to make the decision to take action. This can include photos, video, property information, leasing details, and more. At this time of the year, many are specifically concerned with school districts, and the ability to move in fast.Offer Attractive DealsKnow what your competition is offering, so you can make sure you are offering competitive deals. Make sure the value is there. Know what is going to connect with tenants in terms of deposit, monthly rent, application process, and move-in money requirements.InfrastructureBy this point, you should already have scaled up your infrastructure to handle the surge in business and communications. You’ve got to be able to respond to inquiries instantly and deliver consistently good service. Be sure to have a good team and systems in place to make this happen.Don’t Neglect Current TenantsAll of the above is in addition to keeping your current tenants happy. With all the moving activity and the potential for attractive incentives being offered by other landlords and apartment owners, you want to take stock of your own inventory. Approach tenants early and find out if they plan to renew. Get those leases signed. Find out what you can do to keep good tenants. Or at least be aware of upcoming vacancies so that you can get marketing units early.

May 30, 2017

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How To Invest In Real Estate If You’re Not Accredited

The best investments have traditionally been reserved only for accredited investors. How do you get ahead, and get into profitable real estate investments if you are a non-accredited investor?For far too long the most appealing investments have been closely guarded and preserved for only already wealthy investors. That has been one of the key factors in the rich getting richer, while the poor get poorer. This divide is often the line in the sand between accredited investors, and those who are not. Newer rules may have opened a small window of opportunity for regular individuals. How can you take advantage of that?Accredited Investor StatusThe Securities and Exchange Commission (SEC) lays out the rules for qualifying as an accredited investor. In addition to big institutional investors like banks and pension funds, this also applies to individuals. To qualify you generally need to have a net worth of at least $1M. Or you need to be earning $200,000 per year, or $300,000 between you and your spouse.This requirement has long been used to separate who can invest in what. The public argument is that these restrictions ‘protect’ consumers. Yet, they also prevent individuals from many investments, and control who can offer investments. The result has often been ensuring only the big old finance companies can control the flow of money, and only their best clients with the most money get access to the best deals.The JOBS Act & CrowdfundingThings began to change with the JOBS Act. This new law was introduced as a solution to breaking down the barriers and allowing more people to start businesses and offer opportunities while giving regular people to invest in a broader and better range of choices.Unfortunately, most crowdfunding platforms and companies with these opportunities have not actually begun accepting non-accredited investors. Why? Because the legal expenses can be costly often times. Yet, structuring an offering and opening the doors to non-accredited investors, can mean a lot more up-front work for the crowdfunding platform. It also can afford the opportunity to a broader base of investors.Options for Investing in Real EstateFortunately, there are some options for individuals who want to get into real estate investing and are eager to work their way up to accredited investor status.These include:Direct investment in properties all by yourself REITs and funds Select real estate crowdfunding portalsWithout a lot of capital or experience of your own, and to avoid the high multiple layers of fees from old traditional brokers, it is normally best to leverage some expertise and partners to get best investments. This increases for upside potential and lowers your risk, by going into some form of private partnership or crowdfunding offer. Just make sure you understand what you are investing in, and ask lots of questions if you aren’t sure.

Apr 11, 2017

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The Art Of Patience For Acquiring Income Properties

Acquiring great income properties can require great patience.Sometimes the best property deals can take months to close. Transactions don’t always go smoothly. Yet, staying in the game, and seeing it through can deliver those much needed and valuable leaps in income, wealth, and financial freedom. So, how do you stay patient during the acquisition process, and navigate the process successfully? Understand the Process This is especially important for new real estate investors. It can get frustrating, stressful, and discouraging fast, if you don’t know how the acquisition process works. Make sure you speak with any professionals involved in the deal i.e. real estate agents and attorneys. Or consult other real estate investors with experience in this type of deal and property type. Get clarity on the work flow and steps.Create a Timeline for Follow UpOnce you know the steps in the process you can create a timeline for the transaction. You should have dates set out for the actions you eed to take, and for when you should receive updates from the various vendors involved. You don’t want to spend all day, every day, stressing out your team and actually dragging them down, when they could be pushing your deal forward. You do also need to hold them accountable and be sure they know you are expecting them to give your deal the attention it deserves. Depending on how far out your closing is set, that may be weekly, biweekly, or monthly updates from lenders, title companies, etc.Create an Automated Follow Up ProcessIf you will be providing updates to various parties in the trnsaction, try to automate that as much as possible. That could be a simple checklist which you shoot out via email or update in the cloud using Google Drive. The less time you have to be on the phone or trying to arrange meetings the more time you can spend looking for new deals and enjoying the rewards of your investments.Anticipate ChallengesThere are going to be challenges. Most deals run into some type of challenge. The successful know to expect them, stay objective, and learn how to overcome them quickly. Common issues arise in appraisals, inspections, and title work. Having a great team is key. They should know what to look for to be proactive, and how to handle potential issues for you. Deeds and title insurance are a great example of this. Your title agent should know if there are quirks or ‘clouds’ on title which need to be addressed in order to get financing or insurance. They should be working on those right away, not telling you the day before closing, and causing a potential delay. If they aren’t doing this, find someone better.Create a Layered Acquisition Process One way to beat consistent delays and the wasted time and money that come with too many deals falling apart is to create a layered process. You don’t want too many deals that aren’t going to fly draggig down your pipeline. So, maybe you create a system where you do more due diligence upfront, use letters of intent before making hard offers and writing contracts, and then get your second round of due diligence done within hours of going to contract. Filter out the deals which just won’t work early, then be patient and stay the course with those you really want, and can make happen.