In these challenging economic times, obtaining funding can be a huge challenge, especially when it is a real estate project. However, with the immense power of social media, it is possible to harness the potential of a real estate crowdfunding platform. However, real estate crowdsourcing a feasible option for managing your project?
The Basic Principles of the Real Estate Crowdfunding Platform:
The concept of crowdfunding has been around for a while to finance relief operations, research and development of new items and even political campaigns. It therefore seems quite natural that this concept would be expanded into the real estate crowdfunding platform.
The principle of real estate crowdsourcing is relatively simple. The company can use a real estate crowdfunding platform to advertise the funding need for their project. The company can then let investors purchase small amounts of equity. In this way, the project can receive the financing needed from a large number of people investing a small sum rather than relying on a large financial institution or investor providing all the funds.
Since this obviously still represents some risk to investors, there are some legislations and restrictions which are applied to anyone using the real estate crowdfunding platform. These include adjustments allowing individuals to invest. Previously only accredited investors were eligible to invest in projects. These individuals needed to have a high net worth or minimum income of at least $250,000. These changes have meant that companies can now more effectively raise the capital they need for their project.
Why Use a Real Estate Crowdsourcing Platform?
There are a great many reasons why you may consider using a real estate crowdfunding platform. Even if people are not experienced investors, the buzz about real estate crowdsourcing has meant that they are willing to cut their teeth on this type of deal. The smaller amounts involved mean that the entry level is not prohibitive and can provide an attractive alternative to the pitifully small interest rates being offered by financial institutions for savings and investments. The investors can become a part of a bigger investment project without the hassles of purchasing a property. Profits from the investment can be distributed according to the policies set by the platform, making it even more attractive.
So, if you have a real estate project which has stalled due to lack of funding or you cannot secure the finance you need for your real estate deal, you may wish to consider using a real estate crowdfunding platform. You can source investors from all over the country without needing to spend weeks traveling. You can use the platform to showcase the attractive investment features of your project and secure the finance you need.
If you would like to know more about the benefits of a real estate crowdsourcing platform to secure the funding you need, contact us. We would be happy to answer any questions or queries you may have and explain the real estate crowdsourcing concepts in greater detail to help you determine if it is the finance option best suited to your particular requirements.