Yesterday, Matt told you about a special type of real estate investment:
It allows you to invest in major commercial projects—without putting up hundreds of thousands of dollars.
What makes it possible is a new concept called “Real Estate Crowdfunding.” This is where many investors pool their capital together to invest in bigger projects.
Today, we’ll tell you how this investment option works...
And then we’ll show you how you can consistently use it to find high-yield real estate investment opportunities—all without leaving your home.
Real Estate Crowdfunding in a Nutshell
Traditionally, real estate investors like you have had three options:
1. Invest in Publicly-Traded REITs — Publicly-traded REITs allow you to own multiple properties with a small amount of capital—but given the number of middlemen involved, they tend to provide relatively lower yields.
2. Invest in Non-Traded REITs — Some REITs don’t trade on a stock exchange. With less middlemen involved, they generally offer higher yields—but the high upfront fees can hurt your overall returns.
3. Buy Actual Real Estate — This option offers the highest returns—but it can be challenging to manage, requires a large upfront investment, and you need to have the right relationships to get in on the best deals.
But thanks to “Real Estate Crowdfunding,” now you can invest directly into high-quality real estate projects—all without greedy middlemen or high upfront fees.
On special websites known as “funding platforms,” you can find many types of deals—from residential properties to large-scale commercial projects.
These platforms enable you, and hundreds of other investors, to invest directly into deals. Middlemen are eliminated, and because you’re investing with so many other people, the upfront cash you each need to provide is minimized.
Here are the main types of real estate deals you can find online, and some specific sites you can visit to explore further:
Residential Real Estate
One of the best places to find residential real estate investments is on a funding platform called Realty Mogul.
Since the projects listed here are usually single or multi-family homes, investment minimums are relatively low, sometimes just a few thousand dollars.
These deals tend to offer annual cash yields in the 8% range, and up to 16% annualized yields when capital appreciation is taken into account.
Commercial Real Estate
If you’re looking to get involved in bigger projects, check out the commercial real estate funding platforms.
For example, yesterday Matt showed you Fundrise—a platform where you can invest in everything from a mall to a Manhattan skyscraper.
You can find dozens of deals there, with yields as high as 16%.
Another platform for commercial real estate is Prodigy Network.
To date, Prodigy has raised more than $300 million from thousands of investors.
Since commercial projects tend to be larger in scope, the investment minimums tend to be higher—in the range of $20,000.
Specialized Real Estate Investments
In addition to standard residential and commercial deals, some platforms focus on more specialized investments.
For instance, Fund That Flip provides short-term financing to renovate and sell (i.e. “flip”) residential real estate.
This model is similar to the one used by Patch of Land, which offers yields as high as 18%.
How You Earn Returns
When you back one of these projects, you’ll generate a return in two ways:
1. Through rental income profits, which tend to be issued monthly; and
2. Through capital appreciation when a property is sold
And since the middlemen are cut out, the payouts tend to be relatively higher.
Those higher yields help explain why crowdfunded real estate has been in great demand from investors like you:
Last year, over $1 billion was invested in crowdfunded real estate projects...
And that number is expected to double this year.
We predict those numbers will continue to grow given investor appetite for income.
To learn more, and to start looking at deals, sign up on the sites we mentioned in this article. It’s always free to sign up.
Happy investing.
Best Regards,
Founder
Crowdability.com
