Crowdfunding is a fantastic method for a community of like-minded people to get together to purchase property cheaply. If you could never before afford to drop a lot of cash on a single property, then crowdfunding will become the next best thing for you. It comes down to two distinct types of purchasing options, namely those for personal mortgages, or tangible properties – allow us to explain:

Tangible properties allow the clients to browse all vetted deals. As an example, perhaps you want to take an old parking lot and turn it into luxury condos. You’ll then select exactly what you want to invest in. There are also some platforms that will let you invest and purchase shares in properties that are already in existence, and at a later date, you’ll be able to sell your ownership to other interested parties (in case you want to ensure liquidity).

Crowdfunding for mortgages is even easier to explain. Simply put, a large group of interested buyers can invest in one single mortgage. Your investment can in fact be spread across multiple mortgages. You’ll be investing in individual mortgages, though, as these are people who cannot get a loan from the usual fiscal establishments.

You’ll have to keep this in mind when crowdfunding for real estate: it’s a brand new venture for most and there are many unknown factors still to be considered. While the average investor may have a small fortune to invest, they may not understand or be able to accurately track every avenue their investment takes. Our best advice is that you have to know what you own – in other words, research exactly what it is you plan to purchase. After that, discover why you are investing in it and see what the investment patterns of the other buyers are. While crowdfunding is all the rage, it may not be the best option for you.