REAL ESTATE CROWDFUNDING IN THE USA: SHOULD I INVEST?
REAL ESTATE CROWDFUNDING IN THE USA: SHOULD I INVEST?
How to use real estate crowdfunding in the USA?
“Crowd” and “funding” literally translate to “funding by the crowd”.
Generally, in French we talk about crowdfunding.
The idea is to give a group of people the opportunity to invest in a project. In this case, a real estate project.
But this financing technique isn't new. It has been used in many industries and isn't just for real estate.
Let's see how crowdfunding can be used in real estate in the United States.
real estate crowdfunding
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How real estate crowdfunding works
Crowdfunding can be described as raising funds through relatively small contributions from a large number of individuals.
The widespread adoption of social media and general internet use made crowdfunding a viable way to raise money in the early 2000s, and the concept really came to the forefront of the public consciousness with the advent of companies like Kickstarter, which raised millions, and later billions, for various "projects."
This fundraising technique has gradually invaded all industries and that is why we can sometimes see all types of projects being financed through crowdfunding.
The underlying idea is to allow a group of people to invest through small contributions. At the same time, it allows anyone to finance their project without resorting to traditional methods.
Benefits and risks of real estate crowdfunding in the USA
Don't think that crowdfunding is an investment method that produces magical returns from the comfort of your couch.
It's necessary to have the knowledge and do your own research. Like any form of investment, it involves risks.
-Crowdfunding can involve fees: it depends on the method by which the money is raised. But most projects are carried out through platforms that will charge intermediary fees.
-Crowdfunding is a relatively new method: it can leave room for amateurism. That's also the beauty of this system: anyone can get funding. Investors can gain access to incredible real estate opportunities. But since the barrier to entry is very low, beware of scams or dubious projects.
However, real estate crowdfunding, particularly in the United States, offers many advantages.
-Remote investing in American real estate: this is one of the techniques we use to allow investors to take part in ambitious real estate projects thousands of kilometers away. Communication via the internet now allows us to use crowdfunding to bring together several investors around a single project.
-Diversification: This is a great way to diversify your investment. Let's say you have $200,000 to invest. Instead of investing all of that capital in one investment, you can split it up. For example, into an envelope of 4 times $50,000.
-Helping investors who need to raise capital: Today, real estate crowdfunding literally allows you to present your project to thousands of potential investors. This saves time and money, as it allows you to position yourself much more quickly on opportunities.
How to invest through real estate crowdfunding in the USA?
The Forbes website lists the best platforms for investing in real estate crowdfunding in the United States.
Among the best rated are these 5 sites offering this type of investment:
First national Reality partners
AcreTrader
Crowdstreet
EquityMultiple
PeerStreet
Please note that certain conditions must be met in order to access the investments offered by the platforms.
It is true that due to recent legislation in the United States, the process of being able to invest can be complex for some.
Similarly, with Investir.us, we offer a similar service. You can contribute capital, against which we can guarantee a return. This technique has been used by several hundred French-speaking investors to invest in real estate in the United States.
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