Real Estate Investment can be an intimidating endeavor to get yourself into. But with new opportunities in the field such as real estate crowdfunding on several new online platforms, there's never been a better time to start investing. There are three main reasons why it’s now or never.
- Most platforms are starting with smaller deals
And they won’t be getting any smaller. As platforms are beginning to form proof of concept for future investors, they’re allowing investors to pitch in as low as $1,000. The platform Fundrise even allows community investments of a measly $100 bucks.
Sites like RealtyMogul are finding that RE crowdfunding is working quite swimmingly. I wouldn’t be surprised if they raised their minimums soon.
- Gain expertise before the rest.
The best investors are early… but not first. That’s exactly the point in time the REC industry is in right now. There are enough people who have tried REC already that you can read many of their blogs and learn from them. So read up, learn from their triumphs and mistakes, and get the leg up on the competition. Find good deals before they’re picked over. Just make sure you stay on top of legal factors. Otherwise, you might be the mistake your predecessors learn from.
But even if you do make a mistake, REC is a fairly low-risk, conservative type of investment. That’s because the burden of a project’s success lies on the crowd, rather than the humongous investments of only a few people.
- REC is a gateway investment.
REC makes real estate investment incredibly simple. Corruption is hard to come by in this field, and more and more investors are finding that platform owners strive for complete transparency with investors about what they’re getting themselves into.
Most sites allow you to email or call people at the REC company that manages projects on the platform. These are the people who choose which projects to put on their site, so you can ask them how they decided to pick a certain development project, potential pitfalls, legal contracts that would be involved, all the way down to who would be cleaning the toilets when a tenant moves out.
At Patch of Land, you can actually chat online with the Co-Founders of the platform (the big kahunas) until you are completely confident about what you’re doing. Your investment success is their business, so take advantage of their expertise and coaching until you own the same wisdom they do.
So there you have it. Real estate crowdfunding is a great entry-level investment type. Get in now while the deals are small and the platform owners are available. Gain expertise as you go. Use this method to get your feet wet in real estate, and then continue to diversify your portfolio over time. If you are diligent, you’ll get to build up your community, learn the ropes of investing, and make money in the process.
Meg Baatz is on the marketing team at Patch of Land, a platform that’s growing out of new RE solicitation and crowdfunding laws to help fulfill RE opportunities formerly impossible with REITs, mutual funds, and traditional investment. Save time and be in control of your investment shares at PatchOfLand.com.
