4 Reasons to Invest in Real Estate Crowdfunding
Real Estate Crowdfunding has disrupted traditional methods for financing real estate funds. How? By redefining the financial supply chain and processes of raising capital for multitudes of projects in real estate.
Crowdfunding for Real Estate supplies accredited investors with on demand access to real estate investment opportunities for debt investments, equity investments and senior level positions on institutional real estate funds. Massolution, a research and analysis firm estimates the global market for investments in property through crowdfunding was $2.5 billion in 2015, and anticipates close to $3.5 billion in 2016.
CityVest specializes in crowd funding premium grade real estate institutional funds. The following are four reasons why real estate crowdfunding needs to be in your investment portfolio.
1. Crowdfunding for Real Estate Provides More Access to Deal Flow
In the past, institutional real estate funds were only accessible to investors with deep pockets and connections to insiders that helped navigate access to quality flow and investments.
Real Estate crowdfunding pools investor money to accommodate fund access requirements for a variety of institutional investment opportunities: where prior access could demand upwards of $2MM-$5MM minimums.
Crowdfunding platforms like CityVest provide detailed documentation on all fund operating partners, their historical performance record and biographies. Although CityVest investors are starting their Real Estate Investing journey with more information, they are still encouraged to conduct their own due diligence and make sure individual investments are right for them.
2. Real Estate Crowd Funding Lowers Minimum Investment Amounts
Real estate has traditionally been a rewarding investment strategy but, prior to real estate crowdfunding, individuals exploring high-quality investment properties needed to have the right type of connections and substantial financing at the time an investment opportunity presented itself.
Real estate crowdfunding has allowed eligible investors to more easily access real estate investments by pooling their individual capital, putting up as little as $25,000 each to access real estate institutional funds.
3. Real Estate Investment Risk Profiles for Every Appetite
Real estate crowdfunding lets investors choose the amount of risk that’s right for them. Investors choose between lower risk, lower reward debt offerings where investors fund property development projects. Or, higher-risk, higher reward equity deals in which investments provide partial-ownership positions to investors.
As online real estate investing continues to evolve, investment choices and investor offer terms will improve as investors and more sponsors enter enter online marketplaces to compete for their business. CityVest real estate institutional funds aim to provide above average rates of return than is normally available to an individual investor..
4. Real Estate Investment Diversification
Most individual investors allocate capital investments across multiple assets including cash, money market accounts, stocks and bonds. Typical crowdfunding sites help investors diversify in real estate investments across geographies, property types and even operating partners; individuals can also choose between debt and equity investments.
CityVest real estate institutional funds aim to provide opportunities that generate cash flow income.