• Product development Get a product-market fit
  • Custom software development Deliver a fully-featured application
  • Software re-engineering & support Improve your product performance
  • IT consulting Become a digital enterprise
  • Team augmentation Scale your team when needed
  • SaaS development
  • Web development
  • Mobile app development
  • UI/UX design
  • Test automation
  • All industries
  • HR & Recruitment
  • Mobile apps
  • Web applications
  • Guides on shaping great products
  • Software development best practices
  • How technology is changing business
  • Building high-performance teams

real estate crowdfunding business plan

How to Start a Real Estate Crowdfunding Platform Like Reality Mogul in 2024

Real estate crowdfunding is one of the fastest-growing markets in proptech. But to realize this $870 million opportunity, you’ll need both business acumen and robust tech. To help you succeed, we’ve prepared a detailed guide on how to start real estate crowdfunding in 2024.

As a custom real estate and fintech development company , MindK deals with many early-stage startups. This article features some of the best insights gained while working with clients from the real estate and proptech industries.

how to start real estate crowdfunding CTA

#1 Understand what real estate crowdfunding is

Crowdfunding is a great way to raise money and invest in real estate projects. Unlike traditional investment, it involves lots of small contributions from a large pool of investors. Real estate crowdfunding (REC) platforms act as online marketplaces that unite property owners and potential investors.

  • Equity-based platforms allow investors to get an equity stake when they contribute towards a real estate project. In return, they get a share of the rental revenue generated by the project or its capital profits.
  • Lending-based platforms allow users to invest in mortgage loans. These loans will get repaid on a monthly/quarterly basis with a small % going towards the investor.

Real Estate Crowfunding how it works

#2 Analyze the real estate crowdfunding market

According to Google Trends, the public interest in passive income has grown 4x times over the past five years.

passive income search volume

Historically, real estate outperforms pretty much any other kind of passive income. Now, there are almost 5,000 organizations in the real estate investment business. Among them, REC platforms are by far the most affordable way to invest in real estate for regular people.

real estate ROI

The US remains the world’s leader in the number of real estate crowdfunding sites. Recent changes to European legislation are also contributing to a decade-long expansion of the crowdfunding market, the UK leading the way with 37 REC platforms, followed by France (19) apps, and Spain (13).

rec platforms in Europe by year

The pandemic had a profound effect on the real estate market , although the trajectory is opposite of what is expected from a recession. The recovering economy and high demand from Millenials is fueling a housing boom in the US with more properties sold than any year since 2006.

According to Research and Markets , the real estate crowdfunding market is expected to grow at a stunning CAGR of 33.4%, reaching $868,982 million by 2027.

#3 Study the top players

Over the past 40 years, real estate yielded on average 9.72% ROI vs 5.43% for stocks. Yet, the market boasted a very high barrier of entry – you needed to be an accredited investor with a ton of money.

Everything changed in 2012 when the US adopted the Jumpstart Our Business Startups (JOBS) Act.

By removing the accreditation requirements, it allowed regular people to invest as low as $500 into property. Real estate developers could now advertise their projects to the public and raise funds from a large pool of investors. Investors flock to crowdfunding platforms as the underlying tech gives them 3 key benefits:

  • Lower fees.
  • Higher diversification.
  • Better risk-adjusted returns .

fundrise founder

Image source: thegaribaldigroup.com

Fundrise was the first platform to benefit from the new act. Founded by Dan and Ben Millers, the app was first intended as a way to raise investments for the properties they were building in Washington DC. Soon, other real estate companies started contacting the founders to fund their projects.

In just two years, the company helped raise $15 million from over a thousand contributors. The founders have also secured the biggest ever series A round for a crowdfunding platform at $38 million.

According to Forbes , the company is now worth $800 million and manages assets from over 140, 000 investors. Before the project is approved for fundraising, the platform runs a thorough due diligence process with almost 99% of projects being rejected. It also prefunds every project using the company’s money.

Monetization strategy : charge a 0.15% advisory fee + 0.85% annual management fee + a one-time origination fee of 1% – 2% + $5,000 due diligence/closing fee.

fundrise

RealtyMogul is another American ROC platform founded by Jilliene Helman. When working in wealth management, she noticed that her richest clients were all earning passive income from real estate. As the US passed the JOBS act in 2012, she left her cushy job to found a startup that would make real estate investing affordable for regular Americans.

As of 2015, RealtyMogul was valued at $150 million and had more than 200 thousand registered members.

Monetization strategy : charge a 1%-1,25% management fee + 0.5% – 0.6% REIT fees + one-time legal fees for some properties + fees for lenders and real estate developers.

realtymogul

The real estate crowdfunding market is also flourishing over the Atlantic. EstateGuru is one of the first European REC platforms founded in 2013 with a headquarters in Tallinn, Estonia. The website now has over 86 thousand members who collectively funded more than 2,400 loans.

Monetization strategy : charge a 0.5-1% administration fee + 2.5-4% success fees calculated from the funded volume + 2% secondary market fee.

estateguru

#4 Understand the crowdfunding regulations

Global crowdfunding is still an emerging field without a common legislative framework. It’s crucial to research regulations and limitations that exist in your target market.

The US , for example, has clear definitions regarding the rights and the status of unaccredited investors. According to the SEC , this encompasses persons with an annual income of fewer than 200,000 USD and a net worth of less than 1 million USD (excluding the main residence).

The regulator allows investors with an annual income of less than 100 thousand USD to contribute 2 thousand USD – 5% of annual income/net worth. Otherwise, investors can contribute to 10% of net worth/yearly income.

In the UK, the FCA crowdfunding regulator defines unaccredited backers (or restricted investors) as those whose investment portfolios fall short of 10% of their assets.

Crowdfunding investors can generally make deals that amount up to 10% of earlier invested funds. This averages to £5 thousand per investor.

In Australia , all backers must go through a registration process and own $2,5 million worth of assets.

In Canada , unaccredited investors must own less than 1 million USD of financial assets or have a net worth of under 5 million USD.

Many countries across Europe have now also introduced laws that protect crowdsourcing investors. In October 2020, the EU Parliament ratified the final edition of Regulation on European Crowdfunding Service Providers for Business . Among other things, it highlights:

  • Any crowdfunding business founder can request a license from the “European Enterprise Crowdfunding Service Provider” (ECSP)
  • Max amount for a crowdfunding deal is limited to €5 million over 12 months
  • A platform founder will have to apply for authorization to a national competent authority in a country of registration.
  • Each crowdsourcing offer now has to include a ‘knowledge test’ for ‘non-sophisticated investors’ and a sheet that lists the essential investment information.

Real estate analysts expect the legislation to simplify international crowdfunding and fuel the growth of the REC industry. If you want to learn more about crowdfunding legislation, you can check this guide to REC regulations .

#5 Define your niche

The next thing you should do as a real estate startup founder is to narrow down your target market. Here are a few steps you can take to stand out among competitors:

  • Define your target audience. What is their geographic location, age, median income, and other demographic data?
  • Check your competitors. What is their target market? What features do they offer? Think as an investor – what is lacking from their current offerings?
  • Consider which features could help you win over the potential investors. What can you offer that your competitors can’t?

Robust technology is a good start, especially in comparatively young markets like real estate crowdfunding. A simple and intuitive UX, high speed and cutting-edge stuff like AI-based risk assessment can all help you stand out from the crowd.

Your platform should also feature low fees, high annual returns, diverse offers portfolio, and tax opportunities.

Now that you’ve defined your competitive advantages, there are several types of real estate investment platforms you can choose to build:

  • Private, non-traded REITs (Regulation A+)
  • Equity investments
  • Loan securities & peer-to-peer lending

Early on, it’s a good idea to focus on one type of offering as equity and debt platforms require different workflows. Building all features upfront and paying for the appropriate licenses can be too costly for an early-stage startup. To stand out among your competitors, you’ll need to decide what type of properties to offer on your platform:

  • Commercial real estate (offices, hotels & hospitality, hospitals & medical buildings, multi-family commercial buildings, shopping malls, etc.)
  • Residential property (flats, luxury homes, condominiums, terraced houses, and so on).
  • Fix and Flip (renovating a property and selling for a profit).
  • Land, and so on.

To narrow down your niche even further, you can focus on specific industries like education (school buildings), industrial buildings (warehouses, equipment, building units), agriculture (farms and farming land), or traveling (hospitality, cabins, vacation homes).

Mindk has, for example, developed an online system for buying vacation homes in Norway. Due to local regulations, cabins can only be bought via a paid queue. The system allows Norwegian citizens to register for the queue, make payments via Stripe, and see their place in the queue (determined by complex rules like numbers of children in a family).

buy a leisure cabin

Norwegian system for buying vacation cabins, developed by MindK

#6 Find the right team to build your platform

Getting your technology up and running should be your next priority. Your options here range from hiring developers in-house to outsourcing your project to freelancers or partnering with a full-cycle software development studio. The latter will typically have all the resources you need to design, develop, and launch your platform.

When looking for a suitable developer, always check their experience, domain expertise, and client references. You can start your search with independent review aggregators like Clutch , Goodfirms , and DesignRush . Finding a reliable tech partner can be an art in of itself. So check our article on how to hire a team of all-star web and mobile developers .

how to start real estate crowdfunding CTA

 #7 Choose features for your Minimum Viable Product (MVP)

Big dreams are risky. One of the best ways to lower risks and uncertainties in software development is to select just a handful of key features for the first version of your product. This allows you to test all your assumptions about technology, market, and your target audience.

This approach is called a Minimum Viable Product and we recommend it to most of our clients. It is one of the best ways to launch your product , especially if you enter a highly dynamic market with incomplete requirements.

To help you choose the essential features for your MVP, we’ve analyzed dozens of real estate crowdfunding websites. Here’s what they have in common.

Reeal estate crowdfunding features

Registration and login

Most investment platforms allow registration for both investors and property owners. You can have detailed registration like in Fundrise + an easy investment process. Or you can have a fast registration like CrowdStreet + a very detailed investment form.

crowdstreet

Quick account creation in CrowdStreet

You can also allow users to log in to your platform via Google/Facebook and make the process much more secure with a two-factor authentication (for example, a secure password + a code sent via an SMS). Some platforms like Fundrise also notify users if they detect a log in from a new device for additional security.

Anti money laundering (AML)

Due diligence is essential in crowdfunding. Most platforms like RealtyMogul pay lots of attention to the backer’s identity and their sources of income. They typically request personal information like social security numbers, bank account details, net worth, yearly income, its sources, and so on.

As know-your-customer checks can discourage users from registering, it’s essential to explain why you need all of this information. Another variant is to allow a quick registration and run thorough AML checks when making a pledge.

anti-money laundering in RealtyMogul

Property listings

Once a user registers on your platform, they need to see the list of all available properties.

realtymogul property listings

This listing should include property photos and all the necessary information for a real estate investor:

  • Name of the real estate developer.
  • Investment type (equity, debdt).
  • Property location and description (keep it short and add lots of pictures).
  • Minimum investment & anticipated returns.
  • Distribution frequency & hold period.

Search and filtering

Real estate listings need to be searchable by name, location, and real estate developer. Different filtering options can help investors find exactly what they need among thousands of offerings:

  • Location (state, city, ZIP number).
  • Risk rating.
  • Date of posting.
  • Minimum investment amount.
  • Expected returns, and so on.

Property pages

property profile

Give investors enough information to make the key decision on your platform:

  • Property photo
  • Project chronology
  • Developer company
  • Expected returns, adjusted by risk
  • Property rating
  • Offering documentation
  • Frequently asked questions
  • Location on a map.

Investment page

If you don’t have a detailed due diligence process during registration, you’ll need to make a detailed, multi-stage crowdfunding real estate investment process. On RealtyMogul, it starts with filling in personal information – name, phone, country of residence, address, ZIP code and so on.

The next step is to set the type of investment account – individual, joint, and such. After that, you can choose the amount to invest and proceed to the payment options.

investment page

Payment processing

To support financial transactions, you’ll need to integrate your platform with a banking system or a payment gateway . The latter act as a secure intermediary between the investor’s credit card and your bank account.

They verify the client’s details, check if there’s enough money to make the transaction, and transfer sensitive information in a secure way.

As a real estate development company, MindK worked both with global gateways like PayPal/Stripe and local payment processors like Norwegian Vipps . So if you have trouble choosing a payment gateway for your crowdfunding app, you can check our detailed comparison between the world’s most popular payment systems.  

how payment gateway works

Source: formstack.com

Property submission page

A crowdfunding website is a two-way street between investors and property owners. Some simpler platforms limit submissions to phone calls. RealityModul, however, has a submission page for property owners. Such a page should include the following information:

1. Company profile – total property value, regions covered, type of equity required.

property submission

2. Transaction data – business plan of your equity financing request, amount of equity to collect, asset type for the transaction, anticipated returns, anticipated investor level IRR of the project, physical address of the real estate.

transaction data

A fundraiser’s dashboard should provide all the important information for property owners. It should display the total funds raised as well as min/max/average investment sums. The property owners should be able to schedule repayments for the backers, export the history of transactions, as well as manage offerings.

Admin panel

In addition to the user-focused features, a backoffice of some kind is essential for managing your real estate platform. In its simplest form, the admin panel should allow you to view all the available real estate offerings with the funding histories, backers information, payouts, and so on.

For simpler management, you could also organize your properties into different categories, add custom tags, and examine the history of all actions performed with the offering.

Accounting and financial reporting is another essential component of real estate business automation . A transaction management panel can help you view the transaction data, including the value, source, type, and destination of each transaction. Wallet management is essential for managing investor payouts. It can help you access transaction history and statuses, view investor contacts, export the data, or create new transactions.

Learn  how to build a real estate app with MindK.

Real estate crowdfunding has come a long way since Miller brothers founded Fundrise in 2012. Although there are hundreds of successful platforms, crowdfunding remains one of the fastest growing proptech markets.

Now that you know how to start a real estate crowdfunding platform, it’s time to seize the opportunity. Research your market, understand your customers, and learn about regulations.

Although now is the best time to start a crowdfunding business, your success will require both defining your advantages and developing a robust technology.

MindK has been helping real estate startups for over 10 years. In this time, we delivered more than 170 custom software development projects. So if you’ve got any questions about crowdfunding or need an experienced team to develop your platform, you can always rely on MindK. Just fill the contact form and we’ll organize a meeting with real estate development experts.

Frequently Asked Questions

To effectively manage risks on a real estate crowdfunding platform, founders can implement a rigorous vetting process for all listings, requiring comprehensive property assessments and financial health checks. Diversification strategies can be communicated to investors, advising them to spread investments across different types of properties and geographical locations. Regular updates on property performance and market trends also contribute to a transparent environment.

Incorporating AI and machine learning enhances user experience through personalized investment recommendations based on individual risk profiles and investment preferences. These technologies can streamline the property valuation process, using historical data and market trends to provide accurate estimates quickly.

Operating internationally requires adherence to a patchwork of regulations. A real estate crowdfunding platform must navigate through various jurisdictions by understanding and complying with local laws regarding crowdfunding, real estate transactions, and investor protections. This might involve working with legal experts in each country to ensure operations are not only compliant but also optimized for local investor expectations and protections

real estate crowdfunding business plan

Subscribe to MindK Blog

App Development Superheroes

How to Hire Mobile App Developers and Build the Right Team for 2024

Development of HRIS

Development of HRIS: How to Build a Human Resources Information System

team communication

Team communication: how to achieve your goals in the workplace

This website uses cookies to improve your user experience. Check our privacy policy here .

real estate crowdfunding business plan

  • Search Search Please fill out this field.

We independently evaluate all recommended products and services. If you click on links we provide, we may receive compensation. Learn more .

  • Alternative Investments
  • Real Estate Investing

Best Real Estate Crowdfunding Platforms for April 2024

real estate crowdfunding business plan

Fundrise is the best overall real estate crowdfunding platform due to its high level of transparency, low costs, excellent account services, and more. We researched 19 real estate crowdfunding platforms and evaluated them on 38 criteria, including fees, usability, account services, investment selection, and additional features.

  • Best Overall, Best for Beginners, and Best for Low Fees: Fundrise
  • Best for Accredited Investors and Best for Transparency: EquityMultiple
  • Best for Alternative Investment Selection: YieldStreet
  • Best for Expert Real Estate Investors: CrowdStreet
  • Best for Commercial Real Estate: RealtyMogul
  • Best for Rental Properties: Arrived
  • Best for Real Estate Investment Selection: DLP Capital
  • Our Top Picks
  • EquityMultiple
  • YieldStreet
  • CrowdStreet
  • RealtyMogul

DLP Capital

  • See More (4)

The Bottom Line

  • Compare Providers

How to Invest in Real Estate Online

Why you should trust us.

  • Frequently Asked Questions (FAQs)
  • Methodology

Guide to Real Estate Crowdfunding

Best overall , best for beginners , and best for low fees : fundrise.

  • Fees: 0.15% advisory fee for all Fundrise assets plus 0.85% for real estate funds, 1.85% for innovation fund, and $10 per month for Fundrise Pro
  • Minimum Investment: $10 (brokerage accounts), $1,000 (IRAs)
  • Accredited Investors Only: No

Best Overall

Fundrise delivers access to many real estate debt and equity investments online with a small initial investment. Those who stand behind Fundrise can also become owners through the initial public offering (IPO) . Unlike competitors with long required capital lock-up periods, Fundrise provides quarterly redemption windows.     

Best for Beginners

Beginning investors seeking real estate crowdfunding opportunities will appreciate the low $10 minimum for brokerage accounts and $1,000 for individual retirement accounts (IRAs). 

Best for Low Fees

Fundrise’s fees are transparent and reasonable when compared with competitor platforms. 

Low $10 investment minimum

Broad diversification among investment plans

Transparent platform

Quarterly redemption opportunities

Early liquidation is subject to penalties

Quarterly liquidity is not guaranteed

Complex investments require investor due diligence

Phone-based customer service requires email request for a call back

At Fundrise, beginning investors can invest in alternative assets for just $10, a rare low investment minimum. The platform structure presents vast diversification for small investment amounts. The quarterly investment option adds to Fundrise’s consideration for best real estate investment platform. The expansive portfolio of underlying investments is both positive and negative. There’s great diversification of assets and complex information regarding the underlying holdings.   

Fundrise investors choose an investment plan from four options: Supplemental Income, Balanced Investing, Long-Term Growth, and Venture Capital . Each plan has a goal, from income through startup or venture capital investing. The assets within the plan are allocated among income and growth-focused real estate and debt assets. The venture capital plan offers a path to invest in startup companies. Within each plan, there are scores of investments from across the U.S. The debt investments finance commercial real estate projects, or startup companies (in the venture capital plan).  

Those seeking greater control over their investments can sign up for Fundrise Pro for a reasonable fee of $10 a month. This plan provides greater customization, suitable for more experienced investors. 

Founded in 2010, Fundrise is headquartered in Washington, DC, and serves more than 385,000 investors.

Read the full 2024 Fundrise Review .

Best for Accredited Investors and Best for Transparency : EquityMultiple

  • Fees: Investment-dependent; approximate range is 0.5% to 1.5% plus an origination fee
  • Minimum Investment: $5,000, investments typically range from $10,000 to $30,000
  • Accredited Investors Only: Yes

Best for Accredited Investors

EquityMultiple incorporates a diverse range of real estate investments, from short-term to income and capital appreciation with a range of projected rates of returns. While minimum investment requirements typically range from $10,000 to $30,000, many of the offers have minimums near the low end of this range. Investors will find opportunities with a minimum investment of $5,000, enabling them to diversify their holdings within the platform. 

Best for Transparency

The real estate project offers are clearly explained with all relevant details easily accessible from a one-page description, including an analysis of tax and individual investment features. Links to additional documentation are easily accessible at the bottom of the comprehensive information page.  

Wide variety of investment offers

Comprehensive offer details

Easy access to assistance via chatbot, email, phone, and FAQ

Range of minimum investment amounts and diverse lock-up terms

Target rates of return are estimates and not guaranteed

Investments are not FDIC insured

Not available to non-accredited investors

EquityMultiple is a commercial real estate and technology firm that delivers various private real estate investments to accredited investors. The company accepts only 5% of the projects reviewed on the platform and has distributed $425 million to date. EquityMultiple’s investment offers are arranged into categories: Keep, Grow, and Earn, encompassing both debt and equity positions. The Keep investments have the shortest terms and might be compared with cash equivalent and short-term debt offers. The Grow investments focus on long-term growth with capital appreciation. Earn investments are higher yielding, with 10% or greater projected returns at present. 

Investors can access the investment type, target return, and investment minimum before investing. Lock-up periods vary, as do other features. The transparent offer description screen explains the investment goal, target return range, redemption opportunities, security type, tax implications, and minimum investment amount. The full-page copy delves into the details of the offer and how it might fit into your investment portfolio.

Founded in 2015, EquityMultiple is headquartered in New York, New York, and serves approximately 48,000 registered investors.

Read the full 2024 EquityMultiple Review .

Best for Alternative Investment Selection : YieldStreet

Yieldstreet

  • Fees: Investment-dependent; ranges from 0.00% for short-term note series to 2.0%.  
  • Minimum Investment: $10,000

Yieldstreet provides all investors access to a range of alternative investments , including debt and equity positions in real estate, legal cases, art, and more. Offers include diversified alternative investment funds and individual projects. 

Range of diversified alternative investment offers

Highly vetted investment managers

Reasonable fee structure, starting at 0.00% for notes

Multiple account types available

Not available in Nebraska or North Dakota

Onboarding requires proof of accreditation status

Number and types of investments varies 

If you’re seeking a supermarket of alternative investments, then Yieldstreet might be for you. Founded in 2015, YieldStreet partners with global alternative investment managers. The company claims over 450,000 members, who have invested $3.9 billion and earned an average 9.6% annualized return since 2015. The current and prior offerings span private credit, structured notes, real estate, art, legal finance, and transportation investments.  

The platform is open to both accredited and non-accredited investors with a $10,000 minimum investment requirement. However, some offers demand higher initial minimums. Non-accredited investors can invest in the Yieldstreet Alternative Income Fund (formerly known as the Yieldstreet Prism Fund). However, the $10,000 minimum might be a barrier for non-accredited investors. Accredited investors can access the full scope of the platform’s offers. 

The number of available investments will vary, but the Yieldstreet Alternative Income Fund is expected to be open to new investors continuously. Features such as highly vetted investments, live customer service, comprehensive educational content, and targeted private market recommendations justify the Best for Alternative Investment Selection award.

Founded in 2015, Yieldstreet is headquartered in New York, New York. According to Yieldstreet, they serve over 450,000 members.

Read the full 2024 Yieldstreet Review .

Best for Expert Real Estate Investors : CrowdStreet

Crowdstreet

  • Fees: Vary per deal, and are paid to the sponsor
  • Minimum Investment: Typically, $25,000; varies per investment

Sophisticated commercial real estate investors can invest in debt and equity deals provided by experienced property professionals. Expert real estate investors receive detailed commercial real estate investment documentation. 

Direct access to real estate project sponsors

Thorough project screening, which includes assessment of many factors, including economic environment

End-to-end commercial real estate investment platform with a range of experienced managers

Low inventory of commercial projects at present—which might be considered a positive sign of strict screening and oversight

CrowdStreet REIT I (C-REIT) closed to new investors as of Dec. 21, 2023

High investment minimum

CrowdStreet partners with real estate companies to co-run and market a range of crowdfunded real estate deals. CrowdStreet’s guiding investment tenets include principal protection, lending opportunities to capture high current market interest rates, conservative property valuations, and underpriced commercial real estate opportunities. Sophisticated real estate investors can unpack the offers through project videos and detailed documentation. 

CrowdStreet vets potential real estate projects and only those that pass the strict screening process are included on the platform. As of Feb. 07, 2024, investors have invested over $4.3 billion in over 787 projects.

According to a company representative, CrowdStreet is exercising extreme selectivity in this economic environment, which has led to fewer current available offers on the platform. Currently, only two opportunities are available for investors to choose for their portfolio. The company contact noted that a robust pipeline of investment opportunities is anticipated in 2024.

Like the stock market, the world of real estate is dynamic. For this reason, real estate crowdfunding platforms often adjust the number of investments they make available to investors in response to changes in demand, economic factors, or market trends. The decision to scale up or down their project offerings usually comes after a deep analysis of key industry factors, such as project costs, operating expenses, cap rates , movement in interest rates, and overall industry demand.

Founded in 2013, CrowdStreet is headquartered in Austin, Texas, and serves over 300,000 customers.

Read the full 2024 CrowdStreet Review .

In late July 2023, Tore Steen stepped down as CEO of CrowdStreet after $63 million went missing from deals involving a real-estate developer called Nightingale Properties, which raised money to buy office buildings in Atlanta and Miami. The Department of Justice is investigating Nightingale Properties after the company allegedly diverted nearly $40M of equity raised on CrowdStreet into accounts controlled by its CEO, Elie Schwartz. CrowdStreet has since tightened financial controls and replaced former Tore Steen with an Interim CEO, Jack Chandler.

Best for Commercial Real Estate : RealtyMogul

  • Fees: Investment-dependent; Income REIT has a maximum fee of 4.5% and Apartment Growth REIT has a maximum annual fee of 4.75%
  • Minimum Investment: Investment-dependent. The REITs require $5,000. Individual project minimums range from $25,000 to $35,000.

RealtyMogul is accessible for both non-accredited and accredited investors and offers REIT funds and individual commercial real estate investments. The current five individual projects and two REIT funds provide investors with access to a diverse range of commercial real estate investments.

REIT funds offer non-accredited investors a diversified investment portfolio of private real estate deals

Diverse selection of individual projects

Projected high rates of return

Might be difficult to invest through an IRA

Website is opaque and difficult to navigate

Fees are relatively high

RealtyMogul is a clearing house for commercial real estate investments offered by multiple real estate companies. The RealtyMogul website currently displays seven offers, with details for each project available after creating a login and password. The number of individual project offers will vary, while the REITs are always accessible. Accredited investors can invest in private placement offerings while both accredited and non-accredited investors can access two RealtyMogul real estate investment trusts (REITs).  

All project and REIT information is available online, although users need to dig down through several pages to get to the meat of each offer. The description pages of the individual offers are dense, which is suitable for those seeking the particulars of the project. Investors should take note of the lock-up period for REIT investments. The REITs are eligible for share repurchase after 12 months, the investor will only receive the full redemption value if the fund is held for a minimum of three years.

Founded in 2012, RealtyMogul is headquartered in Los Angeles, California, and serves over 280,000 members.

Read the full 2024 RealtyMogul Review .

Best for Rental Properties : Arrived

Arrived Homes

  • Fees:  Long Term Rentals: 3.5% Sourcing Fee, 0.15% AUM fee. Vacation rentals: 5% Sourcing fee, 5% Gross rents fee, property management fees (third party-pass-through fees): vary
  • Account Minimums : $100
  • Accredited Investor Only : No

Arrived offers small investors access to the rental home and vacation home markets through a fractional share ownership model. Arrived members can invest in single properties with as little as $100 per property, or select the Single Family Residential Fund, which includes many homes. 

Quarterly liquidation available for Single Family Fund (SFR)

LLC structure gives investors true proportional real estate investment ownership

Quarterly redemptions after a six-month holding period and full liquidation after a five-year holding period

Fees are difficult to estimate

Short track record

Cash flow projected returns are lower than current cash equivalents such as CDs or high-yield money market funds 

Investors in Arrived Homes purchase fractional shares of rental residential homes, vacation real estate, or funds that include multiple homes. Investors have direct ownership in a percentage of the LLC which owns the property. Investors profit with regular cash flow derived from rental payments, less expenses. Upon sale, the home might also deliver capital appreciation. 

The number of available homes on the platform varies. Currently, there are single-family homes, vacation rentals, and fund options for investment property. Management responsibilities are outsourced, making this a true passive real estate investment. However, given that the company was founded recently, in 2019, investors may want to consider the short track record of this real estate company before investing.  

Founded in 2019, Arrived is headquartered in Seattle, Washington, and serves over 467,000 investors.

Read the full 2024 Arrived Review .

Best for Real Estate Investment Selection : DLP Capital

  • Fees: 2% (fee rebates for investments greater than $1 million)
  • Minimum Investment: $200,000

DLP Capital offers professional investors a diverse range of opportunities through its five funds, which include diversified holdings within real estate preferred equity, real estate equity, preferred real estate credit, a senior secured mortgage pool, and a real estate credit fund.

Clear fund disclosure

Easy access to basic real estate debt and equity overviews

Legacy planning and additional services for high-net-worth clientele

Annual redemption opportunity for several funds

High minimum of $200,000

Difficult to find details about individual fund holdings

After the target return is achieved, a performance split is levied 

DLP is a private financial services and real estate investment company that serves an affluent clientele and real estate managers with real estate debt and equity funds, access to capital, real estate firm consulting, and legacy planning. DPL has 2,600 current investors and owns more than 18,000 housing units with $5 billion in assets under management. With 18 years in operation, DPL has been around for a while to prove itself.  

The real estate investment options include five real estate debt and equity funds. The Building Communities and DLP Housing (REIT) Funds include equity ownership in the development and construction of various types of rental communities and single- and multi-family homes. The three debt funds provide investors with various types of real estate fixed-income investing. The company targets impact-based investment strategies to combine profit and societal greater good projects. While the $200,000 minimum investment is steep, investors who can afford it will like the transparency surrounding the 2.0% management fee.

Founded in 2006, DLP Capital is headquartered in St. Augustine, Florida, and serves approximately 2,600 investors.

Read the full 2024 DLP Capital Review .

Fundrise offers the best all-around blend of good things to look for in a real estate crowdfunding platform, like low fees, quick funding timelines, and high customer satisfaction scores. YieldStreet, RealtyMogul, and Arrived Homes all offer real estate crowdfunding investment opportunities for non-accredited investors as well as those with greater assets. Accredited investors will find excellent transparency and reasonable fees at EquityMultiple, while wealthy investors have an elite range of investment funds to choose from at DPL Capital.

Compare the Best Real Estate Crowdfunding Sites

Investors can invest in real estate online in a couple of ways. The most common way is through publicly traded real estate investment trusts (REITs). REITs offer several options that investors can choose from, such as residential, commercial, and industrial real estate. The scope of your investment lies in your risk tolerance and goals; most investors who decide to invest in REITs do so to collect passive income through dividends. To invest in publicly traded REITs, Investors will need to open and fund a brokerage account and pick a REIT that meets their financial goals. 

Investors with a higher risk tolerance aiming for more profit potential will want to explore the real estate crowdfunding space. While real estate crowdfunding platforms also offer investors opportunities in residential, industrial, and commercial properties, these investments are often highly illiquid. In addition, investors must first determine their level of accreditation , since this will determine which platforms they qualify to use and which investments they can access. To start investing in real estate using a crowdfunding platform, investors must open an account, link their bank account, and start looking for worthy investments to fund. They will then need to follow their chosen platform's guidelines, as each platform has its process that investors are required to follow.

Investopedia analyzed 19 real estate crowdfunding companies and scored each based on eight major categories and 38 criteria that are crucial in evaluating the offerings and usability of these platforms. We used this data to review each company for their fees, investment selection, transparency, and other features to provide unbiased, comprehensive reviews to ensure our readers make the right decision for their needs. Investopedia launched in 1999 and has been helping readers find the best real estate crowdfunding platforms since 2020.

Real estate crowdfunding opportunities target investors who want to diversify their publicly traded investment holdings. The commonalities of these private market alternative investments include longer holding periods and less liquidity. In exchange for the added risk of this asset category, promised returns are higher than you might encounter in typical financial market investments.

Frequently Asked Questions

What is real estate crowdfunding.

Real estate crowdfunding is a path to invest in private market real estate deals. Crowdfunding platforms raise capital from investors to provide debt or mortgages as well as equity or ownership positions in a variety of commercial real estate. Along with greater risk, these investments frequently offer higher returns than those available in comparable REIT investments. Long-term capital lock-up periods and higher minimum required investment amounts are common characteristics of this alternative investment category. 

How Do I Invest in Real Estate?

There are several ways to invest in real estate . 

  • Buy a home or multifamily property, rent it out, and benefit from potential cash flow and capital appreciation.
  • Buy publicly traded real estate investment trusts (REITs) listed on the public financial markets
  • Invest in private market real estate crowdfunding platforms such as Fundrise and EquityMultiple. 

How Does Crowdfunding Work in Real Estate?

Similar to other online investment portals, you begin by creating an account. Provide demographic and financial information including a Social Security number. Link a bank funding account and transfer money to the crowdfunding website. From among the available offers, either funds or individual investment offers, select which ones you are interested in and follow the prompts for investing. 

Some crowdfunding offers are open to all U.S. investors, while others require a specific level of income and/or net worth .

How Can You Start With Real Estate Crowdfunding?

First, educate yourself about this asset class. This crowdfunding explainer is a good place to start. Next, read reviews of various crowdfunding websites, understand what the companies invest in, what their investment minimums are, and whether they require accreditation or are available to all investors. After selecting a crowdfunding platform, create an account, link a bank account, and select your investments. 

How Does the SEC Regulate Real Estate Crowdfunding?

The crowdfunding investment portal must be registered with the Securities and Exchange Commission (SEC) and be a member of the Financial Industry Regulatory Authority (FINRA). There are SEC rules that apply to real estate crowdfunding and vary based upon whether the investments are for accredited investors or all, and how much capital is raised. Crowdfunding laws include Regulation CF, Regulation D, Rule 506(C), and Rule 504. None of these regulations protect investors against investment losses.  

For more information about a crowdfunding company, visit FINRA’s BrokerCheck and the SEC’s EDGAR website.

What Is an Accredited Investor?

Investors who qualify as accredited investors have over $1 million in net worth (excluding the value of their primary residence), or have earned over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years and reasonably expect the same for the current year.

Financial professionals with Series 7, 65, or 82 licenses also qualify.

The accredited investor designation is meant to protect retail investors from losses that can come with unregulated investments.

How Are Earnings From Crowdfunding Sites Taxed?

Unless owned within an IRA, real estate dividends, interest, and realized capital gains are considered taxable income. The specific real estate crowdfunding platform typically lists the tax treatment of earnings in the Frequently Asked Questions portion of the platform. In general, investors receive a K-1, 1099-DIV, or 1099-INT form for tax reporting. Consult with your tax professional for additional information. 

How Much Money Do You Need To Invest in Real Estate Crowdfunding?

The amount needed to invest in real estate crowdfunding depends on several factors, such as accreditation status and the requirements set by the platform you decide to use. For instance, companies like Fundrise require both accredited and non-accredited investors to make a minimum investment of just $10. Companies like DLP Capital, which only serves accredited investors, require a significantly larger minimum investment of $200,000. Investors will need to conduct their research before deciding on which platform to use and consider important factors such as fees, required minimum investment, projected returns, and lock-up periods on the money they intend to invest.

How We Choose the Best Real Estate Crowdfunding Platforms

To evaluate and pick the best real estate crowdfunding platforms, Investopedia’s team of researchers, data collectors, and industry experts spent nearly two months conducting in-depth industry research, company survey data collection, and hands-on evaluations of 19 real estate crowdfunding platforms. We grouped the 38 criteria, including investment selection and minimums, holding periods, and curated portfolios, into eight categories. We then scored these criteria and weighted the categories to determine which real estate crowdfunding platforms are best for both accredited and non-accredited investors:

  • Account Services : 15%
  • Investment Selection : 15%
  • Liquidity : 12.5% 
  • Transparency : 12.5%
  • Sectors and Domains : 12.5%
  • Customer Support and Usability : 10%
  • Educational Offerings : 7.5%

Through this all-encompassing data collection and review process, Investopedia has provided you with an unbiased and thorough review of the top real estate crowdfunding companies. Read our full process for reviewing and selecting the best real estate crowdfunding platforms.

Learn more about real estate crowdfunding:

  • Real Estate and Crowdfunding: A New Path for Investors
  • Equity vs. Debt Investments for Real Estate Crowdfunding
  • Is Real Estate Investing Safe?
  • Are Fundrise's eREITs Right for You?
  • REITs vs. Real Estate Crowdfunding
  • Real Estate Crowdfunding: Meaning, Pros and Cons, Limitations
  • 5 Simple Ways to Invest in Real Estate
  • What Are Alternative Investments? Definition and Examples
  • Real Estate Crowdfunding Methodology

Investopedia/Julie Bang

Fundrise. " What Are Fundrise's Fees? " 

Fundrise. " What Is the Minimum Initial Investment? " 

Fundrise. " Why Fundrise ."

Fundrise. " Real Estate ." 

Fundrise. " Compare Investment Plans ." 

Fundrise. " Take Control of Your Portfolio ."

Fundrise. " About Us. "

Equity Multiple. " Frequently Asked Questions ." 

EquityMultple. " An Elevated Path to Building Wealth ."

EquityMultiple. " About Us ." 

EquityMultiple. " An Elevated Path to Building Wealth ."

Yieldstreet. " Investment Offerings ." 

Yieldstreet. " Yieldstreet ." 

Yieldstreet. " About Us ." 

Yieldstreet. " Who Can Invest in Yieldstreet Offerings? "  

Yieldstreet. " How It Works ." 

CrowdStreet. " Fees ." 

CrowdStreet. " Investment Minimum ." 

CrowdStreet. " What's the Process? " 

CrowdStreet. " Investment Thesis ."

CrowdStreet. " About ."

CrowdStreet. " CrowdStreet Announces the Next Phase in Its Evolution. "

The Wall Street Journal. " Missing Millions and a Rabbinical Arbitrator: Real-Estate Deal Gone Bad Hits Popular Crowd Funder. "

Bisnow. " DOJ, SEC Investigating Nightingale After $45m of Investor Cash Allegedly Diverted to CEO's Accounts. "

Crowdstreet.com. " CrowdStreet Announces the Next Phase in Its Evolution. "

RealtyMogul. " RealtyMogul Apartment Growth REIT ."

RealtyMogul. " RealtyMogul Income REIT ." 

RealtyMogul. " Frequently Asked Questions ." 

RealtyMogul. " Investments. "

Arrived. " How Does Arrived Make Money. "

Arrived. " What Is Arrived? " 

Arrived. " How Arrived Works: FAQ ."

Arrived. " Invest ." 

DLP Capital. " Investment Funds Comparison ." 

DLP Capital. " Solutions ." 

DLP Capital. " Setting a New Standard for Real Estate Investing ." 

DLP Capital. " Investment Funds ." 

DLP Capital. " Impact Series ." 

U.S. Securities and Exchange Commission. " Investor Alerts and Bulletins ."

Securities Lawyer 101. " The Securities Laws That Apply to Crowdfunding-Rules and Regulations ."

real estate crowdfunding business plan

  • Terms of Service
  • Editorial Policy
  • Privacy Policy
  • Your Privacy Choices

Financial Model, Business Plan and Dashboard Templates - FinModelsLab

How To Write a Business Plan for Real Estate Crowdfunding in 9 Steps: Checklist

By henry sheykin, resources on real estate crowdfunding.

  • Financial Model
  • Business Plan
  • Value Proposition
  • One-Page Business Plan
  • SWOT Analysis
  • Business Model
  • Marketing Plan

Welcome to our blog post on how to write a business plan for real estate crowdfunding in 9 steps! Real estate crowdfunding has quickly become one of the most popular investment models in the US, with a projected growth rate of 25.7% between 2021 and 2026. This innovative business model allows accredited investors to connect with real estate developers, providing them access to a wider pool of potential funding sources.

Conduct Market Research

Market research is a crucial step in the process of writing a business plan for real estate crowdfunding. It allows you to gather important information about the industry, the target market, and the competition, helping you make informed decisions and develop a solid strategy.

Start by identifying the current state of the real estate crowdfunding market and understanding its trends and dynamics. Look for data and reports that provide insights into the growth potential, regulatory environment, and investor behavior within the industry.

Next, focus on analyzing your target audience. Determine who your potential investors are, their preferences, investment goals, and risk tolerance. This will help you tailor your offering and marketing efforts to meet their needs and expectations.

Additionally, it's crucial to examine your competitors. Identify the key players in the real estate crowdfunding space, study their business models, offerings, and marketing strategies. This analysis will enable you to identify gaps in the market and differentiate your platform from others.

Tips for Conducting Market Research:

  • Utilize online resources such as industry reports, market research firms, and government databases to gather comprehensive data.
  • Engage with industry professionals, investors, and real estate developers to gain insights and perspectives.
  • Participate in industry conferences, seminars, and webinars to stay updated on the latest trends and network with key stakeholders.
  • Consider conducting surveys and interviews to gather primary data and validate your market assumptions.

By conducting thorough market research, you will gain a deeper understanding of the industry landscape, your target audience, and your competition. This knowledge will be invaluable in shaping your business plan and positioning your real estate crowdfunding platform for success.

Identify Target Audience

Identifying your target audience is a crucial step in creating a successful real estate crowdfunding business plan. Understanding the needs, preferences, and characteristics of your potential investors will help you tailor your platform and marketing efforts to attract the right audience.

Start by considering the type of real estate projects you plan to offer on your crowdfunding platform. Are you targeting residential properties, commercial buildings, or a specific niche such as vacation rentals or affordable housing? This will help you identify the specific group of investors who are most likely to be interested in your offerings.

Key points to consider when identifying your target audience:

Demographics:

Investment preferences:, experience and expertise:, interests and values:.

By identifying your target audience, you can tailor your marketing messages, develop investor-centric features on your platform, and provide a personalized experience that appeals to their specific needs and aspirations. Remember to regularly review and refine your target audience as your business evolves and new opportunities arise.

Analyze Competition

When entering the real estate crowdfunding industry, it is crucial to analyze the competition in order to identify opportunities for differentiation and gain a competitive advantage. Here are some important steps to consider when analyzing the competition:

  • Research Existing Platforms: Investigate the existing real estate crowdfunding platforms in the market. Take note of their features, target audience, success stories, and any unique selling points they may have.
  • Identify Strengths and Weaknesses: Assess the strengths and weaknesses of these platforms. Look at their user interface, investment opportunities, customer service, marketing strategies, and overall reputation.
  • Evaluate Pricing Models: Examine the fee structures employed by competitors. Compare their percentage fees, upfront costs, and any additional charges. By understanding their pricing models, you can determine how to position yourself competitively.
  • Study Customer Reviews and Feedback: Read customer reviews and feedback about the existing platforms. Look for recurring themes and identify pain points that users have experienced.
  • Identify Market Gaps: Determine if there are any underserved niches or gaps in the market. These may present opportunities for your platform to offer unique solutions or cater to specific customer needs.

Tips for Analyzing Competition:

  • Stay up to date: Continuously monitor the real estate crowdfunding industry for new players and developments. This will help you identify emerging trends and stay ahead of the competition.
  • Utilize online tools: Take advantage of online tools and resources that can provide insights into the competition's online presence and strategies. These tools can range from competitor analysis platforms to social media analytics.
  • Differentiate your offering: After analyzing the competition, identify ways to differentiate your platform. Consider offering unique features, better customer service, or innovative investment opportunities to attract investors.

By thoroughly analyzing the competition, you can gain valuable insights that will inform your strategic decisions and help position your real estate crowdfunding platform for success.

Define Unique Value Proposition

Defining your unique value proposition is crucial for standing out in the competitive real estate crowdfunding market. It is what sets you apart from other platforms and attracts investors to choose your platform over others. Your unique value proposition should clearly communicate the benefits and advantages that investors will gain by joining your platform.

When defining your unique value proposition, consider the following:

  • Identify your target audience: Understanding the needs, preferences, and goals of your target audience is essential for developing a value proposition that directly appeals to them.
  • Highlight key differentiators: Identify what sets your platform apart from competitors. It could be the quality of projects you offer, the level of due diligence and underwriting you provide, or the additional services and resources available to investors.
  • Showcase benefits: Clearly articulate the benefits investors will enjoy by participating in real estate crowdfunding through your platform. Whether it's the potential for higher returns, diversification of their investment portfolio, or access to exclusive real estate opportunities, highlight the advantages of choosing your platform.
  • Conduct surveys or gather feedback from potential investors to understand their preferences and expectations.
  • Research competitor platforms and identify areas where you can differentiate and excel.
  • Create compelling messaging and communicate your unique value proposition consistently across your marketing materials.

Defining your unique value proposition is the cornerstone of your business plan. It helps you effectively position your platform in the market and attract the right investors. Take the time to clearly articulate what makes your platform unique and valuable, and use it as a guiding principle for all your business decisions.

Develop A Financial Plan

Developing a financial plan is crucial for the success of your real estate crowdfunding business. It will help you determine your startup costs, forecast your revenue and expenses, and create a roadmap for your financial goals. Here are some important steps to consider:

  • Analyze your costs: Start by identifying all the costs associated with launching and running your crowdfunding platform. This includes technology infrastructure, marketing expenses, legal and regulatory compliance costs, and employee salaries. Understanding your costs will help you determine how much capital you need to raise.
  • Forecast your revenue: Project your revenue streams based on the fees you plan to charge investors and developers. Consider factors such as the number of projects you expect to facilitate, the average transaction value, and the anticipated growth rate of your platform. This will give you an idea of your potential income.
  • Estimate your expenses: Calculate your ongoing expenses, including overhead costs such as office space, website maintenance, and employee salaries. Consider factors such as technology upgrades, marketing campaigns, and legal compliance fees. This will help you allocate resources efficiently and ensure that you have enough funds to sustain your operations.

Tips for Developing a Financial Plan:

  • Consult with a financial advisor or an accountant who specializes in real estate crowdfunding to ensure accuracy and compliance with industry standards.
  • Consider the scalability of your business model. As your platform grows, your expenses and revenue streams are likely to change. Plan for future expansion accordingly.
  • Regularly review and update your financial plan as market conditions and regulations evolve. This will help you stay financially agile and adapt to any changes that may impact your business.

Gather Necessary Resources And Expertise

When embarking on a real estate crowdfunding venture, gathering the necessary resources and expertise is crucial for the success of your business plan. Without the right resources and expertise, you may encounter challenges and setbacks along the way. Here are some key steps to consider:

  • Financial Resources: One of the first steps in gathering necessary resources is to assess your financial situation. Determine how much capital you will need to start and operate your real estate crowdfunding platform. Consider factors such as website development, marketing expenses, legal fees, and staff salaries.
  • Technology: Building a reliable and user-friendly platform is essential for attracting investors and developers. Invest in appropriate technology infrastructure to ensure smooth operations and secure transactions. This may include hiring skilled developers or partnering with a reputable IT company.
  • Legal Framework: Real estate crowdfunding involves complex legal regulations and compliance requirements. Seek legal advice to ensure you understand the legal implications and obligations associated with operating a crowdfunding platform. This will help protect your business and gain the trust of investors.
  • Industry Expertise: To build a credible and reputable real estate crowdfunding platform, it is crucial to have a solid understanding of the industry. This includes knowledge of real estate markets, project evaluation, risk assessment, and underwriting practices. Hiring professionals with relevant experience in the real estate and finance sectors can greatly enhance your expertise.

Here are some tips to help you gather the necessary resources and expertise:

  • Consider partnering with industry experts or established real estate developers to leverage their experience and reputation.
  • Attend industry conferences, webinars, and networking events to stay updated on the latest trends and developments in real estate crowdfunding.
  • Establish relationships with legal and financial professionals who specialize in real estate crowdfunding to ensure compliance and mitigate legal risks.
  • Collaborate with reputable technology providers to build a secure and user-friendly platform.

Gathering the necessary resources and expertise will not only strengthen your business plan, but it will also instill confidence in potential investors and developers. By investing time and effort into this step, you are setting a solid foundation for a successful real estate crowdfunding venture.

Identify Potential Risks And Challenges

Identifying potential risks and challenges is a crucial step in creating a solid business plan for real estate crowdfunding. By anticipating and addressing these factors, you can mitigate their impact and increase the chances of success for your platform. Here are some important considerations to keep in mind:

  • Legal and Regulatory Compliance: Ensure that you fully understand and comply with all applicable laws and regulations related to real estate crowdfunding. This includes securities laws, investor accreditation requirements, and any specific regulations governing real estate investments in your target market. Consult legal experts to ensure your operations are fully compliant.
  • Platform Security: Protecting the sensitive data and financial transactions of your investors is paramount. Implement robust security measures, such as encryption protocols, secure servers, and regular data backups. Invest in cybersecurity tools and partner with reputable technology providers to safeguard against potential breaches or data leaks.
  • Market Volatility: Real estate markets can be subject to fluctuations and economic downturns. Stay informed about market trends, conduct thorough market research, and monitor key indicators to identify potential risks. Develop contingencies and strategies to mitigate the impact of market volatility on your platform and the projects you fund.
  • Operational Challenges: Running a real estate crowdfunding platform involves numerous operational tasks, such as due diligence, underwriting, project management, and investor relations. Ensure you have the necessary expertise and resources to handle these responsibilities effectively. Consider building a team with diverse skill sets to tackle different aspects of the business.
  • Competition: The real estate crowdfunding industry is becoming increasingly competitive. Analyze the landscape to understand who your main competitors are and what differentiates your platform. Develop strategies to highlight your unique value proposition and attract potential investors and real estate developers to your platform.

Tips for Identifying Risks and Challenges:

  • Conduct a comprehensive SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis to identify potential risks and challenges specific to your platform.
  • Engage with industry experts and seek their insights into the potential risks and challenges in the real estate crowdfunding space.
  • Establish strong relationships with regulatory authorities and stay up to date with any changes in regulations that may impact your operations.
  • Regularly review and update your risk management strategies to adapt to evolving market conditions and emerging risks.
  • Consider seeking insurance coverage specific to your platform to provide additional protection against unforeseen risks.

By diligently identifying and addressing potential risks and challenges, you can enhance the resilience and success of your real estate crowdfunding platform. Incorporating risk management strategies into your business plan demonstrates a proactive approach that inspires confidence in both investors and stakeholders.

Create A Marketing Strategy

Once you have developed your unique value proposition and analyzed the competition, it is crucial to create a comprehensive marketing strategy to effectively promote your real estate crowdfunding platform. A well-thought-out marketing strategy will help you attract and engage investors, build brand awareness, and differentiate your platform from others in the market.

Here are some important steps to consider when creating your marketing strategy:

  • Define your target audience: Identify the type of investors you are targeting, such as high-net-worth individuals or institutional investors. Understand their needs, preferences, and investment goals to tailor your marketing messages and campaigns accordingly.
  • Establish your brand identity: Develop a compelling brand identity that reflects your platform's values, mission, and unique selling proposition. This will help create differentiation and build trust among potential investors.
  • Utilize online marketing: Leverage digital marketing channels such as social media, email marketing, content marketing, and search engine optimization (SEO) to reach your target audience and drive traffic to your platform. Consider creating informative content like blog posts, case studies, and webinars to establish thought leadership and attract investors.
  • Engage with influencers: Connect with industry influencers, real estate experts, and reputable sources to endorse your platform and help increase your credibility. Collaborate with them through guest blogging, interviews, or partnerships to expand your reach and gain exposure to a wider audience.
  • Optimize user experience: Ensure that your website and platform provide a seamless user experience. Make it easy for investors to navigate, sign up, and access relevant information about the projects available. A user-friendly platform will enhance investors' confidence and encourage them to engage further.
  • Regularly track and analyze your marketing efforts to identify areas of improvement and adjust your strategy accordingly.
  • Consider leveraging paid advertising options such as pay-per-click (PPC) campaigns or sponsored content to increase visibility and reach a wider audience.
  • Attend relevant industry events, conferences, and networking opportunities to connect with potential investors and industry professionals.
  • Offer incentives or referral programs to encourage your existing investors to promote your platform to their network.
  • Create engaging and informative videos to showcase your platform's features and benefits, making it easier for potential investors to understand how your platform works.

Build A Network And Seek Partnerships

Building a strong network and seeking partnerships is crucial for the success of your real estate crowdfunding business. By connecting with industry professionals, investors, and other business owners, you can gain valuable insights, access a wider pool of potential investors, and increase your chances of finding lucrative partnerships.

Here are some key steps to consider when building your network and seeking partnerships:

  • Attend industry events and conferences: Attending real estate and crowdfunding industry events and conferences is a great way to meet like-minded individuals and establish meaningful connections. These events often provide opportunities for networking, knowledge sharing, and potential partnership discussions.
  • Join relevant professional associations: Consider joining professional associations that are focused on real estate, crowdfunding, and finance. These associations typically offer networking events, educational resources, and a platform to connect with industry leaders and potential partners.
  • Utilize online platforms: Take advantage of online platforms and communities that are specifically designed for real estate crowdfunding professionals. These platforms provide forums, discussion groups, and networking opportunities where you can connect with potential partners and stay updated on industry trends.
  • Engage in social media: Social media platforms like LinkedIn, Twitter, and Facebook can be powerful tools for building your network and finding potential partners. Join relevant groups, actively participate in discussions, and share valuable insights to establish yourself as a thought leader in the field.
  • Attend local networking events: Don't overlook the value of local networking events in your area. These events often attract a diverse group of professionals, including real estate developers, investors, and service providers. Building relationships with local players can open doors to potential partnership opportunities.
  • Be proactive in reaching out to individuals and businesses that align with your goals and values.
  • Seek partnerships with complementary businesses or services to create mutually beneficial opportunities.
  • Build a reputation as a reliable and trustworthy professional through consistent communication and transparency.
  • Consider collaborating with experienced industry experts who can provide guidance and mentorship.
  • Always follow up and maintain regular communication with potential partners to nurture relationships.

In conclusion, writing a business plan for real estate crowdfunding involves several key steps. These steps include conducting market research, identifying the target audience, analyzing competition, defining a unique value proposition, developing a financial plan, gathering necessary resources and expertise, identifying potential risks and challenges, creating a marketing strategy, and building a network and seeking partnerships.

By following this checklist, real estate crowdfunding platforms can position themselves for success in the market. They can attract accredited investors, provide access to real estate opportunities, and offer services that ensure informed decision-making for investors. With the potential for secondary market options, investors also have the flexibility to sell their holdings before a project's completion.

Overall, real estate crowdfunding has proven to be a lucrative business model in the US, benefitting both developers and investors. As this industry continues to grow, it is essential for entrepreneurs to create a robust business plan that incorporates these nine steps to stand out in the competitive market and achieve long-term success.

Excel financial model

$169.00 $99.00 Get Template

Related Blogs

  • Starting a Business
  • KPI Metrics
  • Running Expenses
  • Startup Costs
  • Pitch Deck Example
  • Increasing Profitability
  • Sales Strategy
  • Rising Capital
  • Valuing a Business
  • How Much Makes
  • Sell a Business
  • Business Idea
  • How To Avoid Mistakes

Leave a comment

Your email address will not be published. Required fields are marked *

Please note, comments must be approved before they are published

  • Coaching Team
  • Investor Tools
  • Student Success

Real Estate Investing Strategies

  • Real Estate Business
  • Real Estate Markets
  • Real Estate Financing
  • REITs & Stock Investing

A Beginner’s Guide To Real Estate Crowdfunding

real estate crowdfunding business plan

What is real estate crowdfunding?

Crowdfunding pros & cons

Types of real estate crowdfunding

Choosing a crowdfunding platform

10 best real estate crowdfunding sites

Expert crowdfunding tips

Crowdfunding is more than just a 21st-century buzzword; it’s a new, exciting way for real estate investors to raise capital. But how does real estate crowdfunding work? What are the benefits of crowdfunding real estate deals? What do you need to know about looking for real estate investment loans from the masses? And what returns could you get by investing in another investor’s crowdfunding project?

Though real estate crowdfunding is not a traditional means of raising capital, investors need to understand this powerful form of real estate financing.

What Is Real Estate Crowdfunding?

Crowdfunding is a way for business owners to raise money, not by asking one investor for a huge investment, but by reaching out to a large pool of investors who each contribute a small amount of money. A key difference between crowdfunding and more traditional methods of raising money is in the platform used, as crowdfunding is usually done online.

Along with crowdfunding websites, business owners turn to social media platforms such as Facebook or Twitter to market their ventures directly to wider audiences of interested investors.

Real estate investors have adopted crowdfunding as an alternative to more traditional means of financing investments. For example, large developers use crowdfunding platforms to solicit investments from groups of accredited investors, while small business owners have launched campaigns to raise funds for smaller investment deals. The section below illustrates why real estate crowdfunding has grown in popularity among investors in recent years.

How Is Crowdfunding Regulated?

Crowdfunding regulations changed in 2012 under the JOBS Act. Previously, investors’ ability to advertise their crowdfunding efforts was limited.

The JOBS Act now allows investors to directly advertise to a larger audience through social media and online. The change in regulation opened doors that allowed investors to gain access to more funding sources for their real estate deals.

real estate crowdfunding

Benefits Of Real Estate Crowdfunding

Whether you’re just beginning your real estate investing journey or you’re a seasoned pro, locking down the necessary financing to fund a deal can be a challenge. With its advent in the real estate sector, many investors have taken advantage of crowdfunding as an alternative way of funding their deals. Furthermore, crowdfunding has become associated with several other notable benefits, including:

Crowdfunding real estate increases your funding options while growing your investor network.

Direct marketing through crowdfunding also doubles as a tool to promote your business.

Successful projects will lead to positive word of mouth and client loyalty over time.

Save time and money by taking advantage of a user-friendly investment platform.

Gain access to valuable feedback from your online community so you may address any business flaws.

1. Easy Access To Capital

Crowdfunding offers easy access to credit and capital without all of the hassles of getting a loan and is used for virtually any type of fundraising effort you can think of: personal, familial, business, and real estate investing. Investors can benefit from real estate crowdfunding by keeping their personal credit free and available for other uses while keeping their credit scores intact. This allows small business owners to get their companies up and running more quickly and also helps secure funding for deals when more traditional options are limited.

2. Great Marketing Tool

Aside from the direct benefit of funding, crowdfunding lends itself as an excellent marketing tool for business owners who would like to promote their brand. By promoting fundraising campaigns through social media and directly on crowdfunding platforms, real estate investors have an opportunity to grow their investor network rapidly. A best practice is to provide a credibility package on your website, showing past projects and returns, along with your company’s mission and goals. This helps to demonstrate your credibility and professionality to interested investors.

3. Builds Investor Loyalty

A crowdfunding campaign is a smart way to prove the appeal and financial viability of an idea or project. By providing compelling information through the campaigning process, you can attract potential investors and garner support. Once you’ve secured your funding, your contributors will become invested in your success and will go the extra mile to help you succeed. By providing consistent results, your investors will develop a sense of loyalty, which can lead to positive word-of-mouth marketing , repeated business, and direct referrals.

4. User Friendly Platforms Available

Many real estate crowdfunding sites make it easy for investors to launch their fundraising campaigns, thus saving them time and money. These platforms are designed to showcase campaigns in a visually appealing manner while allowing fundraisers to reach a large audience without excessive effort. Be sure to keep reading to discover some of the best real estate crowdfunding platforms available today.

5. Way To Gain Valuable Feedback

Due to crowdfunding’s public nature, campaigns will be subject to reactions, with or without invitation. However, this is a great opportunity for business owners to monitor user comments and gain valuable feedback. For example, pay attention to input left by other experienced investors or even criticism as a way to identify and fix business flaws. Responding and thanking users for leaving the time to reach out can help you open up lines of communication and develop genuine connections with new contacts.

It is also important to recognize the learning curve for those who have not yet participated in crowdfunding. When launching your first campaign, some of this feedback can be a great way to learn how to improve your campaigns in the future. It can also be an opportunity to introduce the concept of crowdfunding to those who are not yet familiar.

Disadvantages Of Real Estate Crowdfunding

While crowdfunding may seem like an attractive strategy, it is important to know the disadvantages that investors face when funding your deal.

Investment limits

Uncertainty

Rate of return

Lack of control

1. Crowdfunding Investment Limits

The US Securities and Exchange Commission has put regulations in place for non-accredited lenders to account for the risk involved with crowdfunded deals. Depending on a lender’s income, there are limits to the amount of money you can contribute to these deals. If your annual income is less than $107,000, you can make a yearly investment of 5% of your income with $2200 as the maximum investment allowed. If your annual income is greater than $107,000, you can invest up to 10% of your income or a maximum investment no greater than $107,000.

2. Uncertainty

One of the biggest challenges that you will face when recruiting investors for your crowdfunded deal is that investors may be unfamiliar with you or your business. This can lead them to hesitate before trusting an investment in the hands of a borrower that they are not familiar with. There is a risk of losing their investment, and although you will be confident your deal will succeed, investors may need more convincing before agreeing to get in business with you.

3. Rate Of Return

It is common for crowdfunded real estate deals to have an investment period of up to 5 to 7 years, meaning that investors will not see an immediate return on their investment. While there is long-term potential for a large profit, some investors may see the holding period of a crowdfunded deal as a drawback.

4. Lack Of Control

Investors also do not have decision-making control of the property they are investing in. Some investors may be wary of contributing to your crowdfunding campaign if they are not completely confident in placing the future of their investment in your hands. You may find that a more detailed presentation of your project’s trajectory will help alleviate investors’ hesitations before they are convinced that the project will be worth their investment.

property crowdfunding

The Two Types Of Real Estate Crowdfunding

If you are a real estate investor who has built up some capital, you may now be looking for ways to grow your wealth a bit more passively. For this type of investor, real estate crowdfunding essentially has two options: equity investments and debt investing.

Equity Investments

This is the route most real estate crowdfunding investors take, mainly because it provides a higher return than debt investing. However, this also presents a risk. Equity investments give investors an equity stake in a residential or commercial property, effectively turning them into shareholders.

If you choose to invest this way, your return will be based on the rental income of the property, minus fees needed for the crowdsourcing platform. In the event the property is sold, you will also earn a share of its appreciation value. Payouts are typically sent every quarter.

Pros Of Equity Investments

The sky is the limit on returns:  You can see (at times) an 18 to 25 percent annual return, with the possibility for more, since equity investments do not have caps on them.

Lower fees:  You have the option to pay an annual fee to maintain your shares on the property, instead of upfront fees and monthly fees.

Tax benefits:  Since you own a share of the property, you can deduct expenses on it from your annual income tax (e.g. depreciation, repairs).

Cons Of Equity Investments

Riskier:  You will be second in line for payouts. If the property does not attain a profit, you will not get any return on your investment.

Longer hold period:  If you want more liquidity in your portfolio, equity investing is probably not for you. The holding period usually lasts for five to ten years.

Debt Investments

On the other hand, debt investing means the investor (you) are basically the lender to the property owner. You receive a fixed return based on the interest rate of the owner’s mortgage loan , as well as the amount you have invested.

Payments are usually given every month or every quarter. And since you are in debt investing, you will have priority during property payout.

Pros Of Debt Investments

Steady returns:  You are more likely to predict how much and when you will receive your payout, thanks to how the investment is structured. You may be looking at a potential of an 8 to 12 percent annual return.

Less risk:  You have less risk with debt investments, since the property owner will be the one to secure the mortgage loan. If the owner fails to pay the loan, you can recover your loss via a foreclosure action.

Shorter hold time:  Since debt investments are usually done with development projects, the holding period only stretches from six to 24 months.

Cons Of Debt Investments

Capped returns:  Debt investments are calculated based on the interest rate of the owner’s mortgage loan. As such, your yields will be limited.

How To Get Started With Real Estate Crowdfunding Platforms

With many crowdfunding platforms available, it’s easy to get lost in a sea of options and features. It is recommended that you pick a platform based on site functionality, credibility, documentation, and customer service quality. For starters, you want to stay away from sites that function as nothing more than listing services. Go for platforms that act as a broker-dealer. Additionally, aim to pick a platform with previous experience handling the kind of investments you’re looking for.

Next, you’ll want to look for a site with solid venture capital backing. Since your investment could be locked up for a certain amount of time, make sure you are using a credible platform that will be up and running for a long time. Also, inspect how the platform conducts its due diligence. Be sure to ask the important questions: What kind of documentation does the platform collect for potential deals? Do they ask companies to provide liabilities or indemnities to investors should something go wrong?

Finally, verify that the platform provides quality customer service. As you’re researching different platforms and asking them your set of questions, you should be able to get a sense of their customer service quality by their willingness to provide the information and assurance you need.

10 Best Real Estate Crowdfunding Sites Of 2024

Now that you’ve got a primer on crowdfunding for real estate deals, you might be wondering which real estate crowdfunding platform you should go with. Here are a few to consider:

1031 Crowdfunding : Specializing in 1031 exchanges, this platform offers vetted DST investments for tax-deferred real estate transitions, catering to accredited investors with various minimum investment options. Ideal for those looking to defer capital gains taxes, the platform provides a streamlined process for reinvesting in like-kind, pre-vetted real estate opportunities.

CrowdStreet : You may enjoy CrowdStreet if you’re an accredited investor. Although the minimum investment varies, most offerings on this platform is $25,000 or more. This is a great marketplace for commercial, institutional-like investment opportunities.

DiversyFund : DiversyFund acquires, develops, and maintains a portfolio of properties. It also collects cash flow and divides earnings among its investors, rather than acting as a broker that links investors with projects. It does not charge any administration or broker fees, unlike some other crowdfunding sites. You can currently invest a minimum of $500 in the DiversyFund Growth REIT.

RealtyShares: With a minimum requirement of only $5,000, RealtyShares is a tech-enabled platform that allows borrowers to present their projects to accredited investors. For investors, on the other hand, you can look into a market of pre-screened residential, commercial, retail, and mix-use properties.

RealtyMogul: Catering to both debt and equity investors, RealtyMogul also features a $5,000 minimum investment. They put investor protection at the top of their priorities, making sure all investment opportunities are vetted.

iFunding: If you’re looking to invest in commercial retail and single family residential projects, you may want to check out iFunding. For borrowers, the website has professionals who can lend a hand in raising capital for a project. Minimum investment is also $5,000.

Patch of Land: This is a peer-to-real-estate lending marketplace that acts as bridge between investors looking for high-yield, short-term investments and borrowers looking for rehabbing funding.

Fundrise: Fundrise acts as an online marketplace with some investments available for as low as $5,000. Since its creation in 2012, Fundrise has connected countless property owners with real estate investors.

Prodigy Network: For those hoping to get involved in commerical real estate, Prodigy Network is a great option. The minimum investment is $10,000 however their extensive six part vetting process helps provide piece of mind for those ready to get started.

PeerStreet : PeerStreet is another platform for accredited investors interested in building a real estate portfolio, without directly buying real estate. The website offers numerous investment options and even automated portfolios for those looking for hands-off opportunities.

EquityMultiple : This platform is great for investors ready to break into commercial real estate. Investors can get started with as little as $5,000 and choose from a number of high-yield investments.

how to crowdfund real estate

Expert Tips For Your Crowdfunding Campaign

Crowdfunding for real estate will require a lot of hard work on your part. However, in an attempt to give you a leg up on the competition, our partners at CT Homes have compiled a list of things entrepreneurs need to know before they even think about crowdfunding their next great idea.

Brand Recognition & Marketing Ability

Crowdfunding, not unlike marketing, is at its best when it coincides with a recognizable brand. Startups must have the appropriate marketing capabilities and fundamental brand elements in place to be able to leverage a crowdfunding campaign. To that end, you shouldn’t even consider crowdfunding unless you have already allocated resources to increasing your brand awareness.

Do people know who you are in your community? Does the crowdfunding platform you are looking at attract investors interested in your niche? Do you have a dedicated social media following to leverage? If you answered yes to these questions, you may be a candidate for crowdfunding. However, consider the following advice before you make the jump.

Hire A Lawyer

It may come as a surprise to many new startup companies, but the prospect of crowdfunding is best approached with a legal representative. I recommend hiring a lawyer to represent you in your fundraising endeavor, as you will undoubtedly have questions along the way. For starters, each state is accompanied by its own unique rules.

At the time of this writing, the SEC wants to keep contributions confined to each state. In other words, to fund a campaign you must live in the same state as the company. If that wasn’t enough, anyone interested in raising money online must be familiar with the aspects of incorporation, protection of intellectual property, regulatory compliance, document preparation, and valuing shares. If you aren’t comfortable doing these things yourself, I highly encourage you to enlist the services of a lawyer.

Choose The Platform Carefully

By now, people are more than aware of the untapped potential lying dormant in crowdfunding portals. It shouldn’t surprise anyone that new ones are being introduced to the public every day. Having said that, the available options to choose from can be overwhelming to anyone who doesn’t know what they are doing.

While each shares the same prerogative, there are small differences that set them apart. It is the minutia, however, that will play the biggest role in helping you decide which portal to pick. Some will have hidden fees, while others may cater specifically to your business. The key is to pick the portal that best suits your needs, and what you hope to accomplish. Start with a portal that will attract investors who are more inclined to be interested in your business, and work from there.

Understanding Investor & Owner Dynamics

Above all else, you must understand what it is you are getting into when it comes to real estate crowdfunding. By no means should you consider investors to be anything less than owners. Unlike online fundraising platforms such as Kickstarter or GoFundMe, which allow individuals to contribute to a project in exchange for a “reward” or good will, investors that contribute to a crowdfunding campaign are buying in as a partner. The extent of ownership will vary, but it is important to remember that you are in a partnership once the campaign goes live.

Real estate crowdfunding is a rising trend in the investing space, and for good reason. Utilized correctly, it can benefit both those looking to fund investments, and receive funding, alike. As this is a newer trend, be sure to research real estate crowdfunding platforms and mind due diligence when making investments. If you want to try a non-traditional form of real estate investing, it’s possible that crowdfunding could be the key to a new form of investing success.

Click the banner below to take a 90-minute online training class and get started learning how to invest in today’s real estate market!

real estate crowdfunding business plan

The information presented is not intended to be used as the sole basis of any investment decisions, nor should it be construed as advice designed to meet the investment needs of any particular investor. Nothing provided shall constitute financial, tax, legal, or accounting advice or individually tailored investment advice. This information is for educational purposes only.

What is an STR in Real Estate?

Wholetailing: a guide for real estate investors, what is chain of title in real estate investing, what is a real estate fund of funds (fof), reits vs real estate: which is the better investment, multi-family vs. single-family property investments: a comprehensive guide.

  • Alternative Asset Managers
  • Private Equity Funds
  • Investment Fund Management
  • Hedge Funds
  • DealFlow Core
  • DealFlow Institutional
  • DealFlow Accounts
  • DealFlow Marketing
  • Investor Relations
  • Capital Markets Insights
  • Book a Demo

The Complete Guide to Real Estate Crowdfunding

How creating your own crowdfunding platform can fast-track your company's growth

A combination of the global economy, the ever-accelerating pace of technological advances, and a desire to invest in tangible assets has created a burgeoning interest in real estate crowdfunding. This interest has led to a need for commercial real estate fintech sophisticated enough to serve this growing market and to support the needs of investors in markets throughout North America, Europe, and the Pacific Rim, making international real estate crowdfunding is more available than ever before.

What is real estate crowdfunding?

Real estate developers have traditionally drawn on small syndicates of private investors to facilitate the acquisition, construction, and carrying costs of their projects. Often, opportunities were scarce, even for investors of sufficient means to participate in the financial side of these projects.

In addition, for those private investors wishing to participate in funding a project, extensive knowledge of the market and the developer was necessary in order to sufficiently evaluate the investment opportunity. The due diligence necessary for ensuring that the opportunity was a good one, then evaluating its progress throughout the construction process, was a time-consuming and labor-intensive undertaking.

Perspectives on real estate crowdfunding

For the individual investor, crowdfunding provides the opportunity to take part in institutional quality investment opportunities with a much lower buy-in. It offers the security of rigorous due diligence and vetting and in many cases offers investors the flexibility of on-demand exit strategies without the need for exit upon project completion.

For the real estate companies or investment funds, crowdfunding provides a variety of different strategies for connecting financiers and developers. These include:

Equity Crowdfunding

Investors buy shares in individual assets or broader investment funds , retaining those shares until the investment is monetized. This is a great option for both open or closed ended funds or commercial real estate developers

Debt Crowdfunding

Debt crowdfunding allows lenders to finance an asset or fund , then earn interest along with their principal repayment upon exit. This can be a great option for companies that are looking for diversifying away from traditional financing options.

Benefits of crowdfunding for commercial real estate

Real estate crowdfunding offers a solution to a variety of the difficulties associated with traditional financing options for commercial real estate developers’ large-scale new construction, renovation, and development projects. Crowdfunding allows large numbers of smaller investors to participate in funding an investment, pooling their resources to fund a wide variety of projects. This obviates the need for specialty and market-based expertise by the individual investors as due diligence and oversight is undertaken by the platform’s facilitators.

Why would a commercial real estate fund want to use this method for raising capital?

  • Crowdfunding offers access to broader capital opportunities than traditional funding sources. Rather than being dependent on the extensive requirements of bank partners or the relatively small pool of institutional investors for a given market or project, crowdfunding expands the base of possible investors, many of whom will choose to invest in multiple projects over time.
  • Real estate crowdfunding allows fund managers to leverage new regulations to raise capital efficiently. For example, Regulation A+ is popular with real estate firms in the US and Canada because of the access it provides to retail investors and the size of the capital raises, up to $50 million in a 12 month period. In the UK, property Investment Savings Accounts (ISA) enjoy widespread popularity that has continued to grow throughout their nearly 20 years of existence.
  • For those seeking to future proof their business model, real estate crowdfunding offers the opportunity to industry trends diversify their base of investors by making investment easier and reducing the necessary time commitment. In addition, technology solutions are now available such as white label real estate crowdfunding software for firms to remain relevant without the technology headaches.

How and Why to start your own crowdfunding platform

If you are interested in starting your own crowdfunding platform, there has never been a better time. Advances in technology -- like Katipult’s fintech platform solution -- make this an exceptional time to streamline the entire capital raising and investor management process. What do you need to know to get started and what are the benefits for your company?

  • Plan ahead for the rollout of your platform. Understand your existing and ideal investors, define your brand identity, and design a marketing campaign to reach the people who can help you reach your investment goals. Be sure to spend time building a team who can implement your plans effectively as well.
  • Choose the right technology for the design, setup and management of your crowdfunding platform. Don’t feel limited by the restrictions of a cookie-cutter product and don’t feel the need to create a custom solution out of whole cloth. A highly customizable product like Katipult’s white label fintech product can provide the custom options you crave and get you launched faster.
  • Build in compliance and operational advantages when you choose a syndication software that provides comprehensive solutions to the challenges presented throughout the investment life cycle. Leveraging this type of technology solution saves you time and money throughout the investment process and optimizes research and oversight capabilities as well.

Real Estate Crowdfunding vs. Real Estate Investment Trusts (REITs)

Real Estate Investment Trusts or REITs have been a vehicle leveraged by real estate companies to pool assets; in many cases REITS are publicly traded entities. By going public they have access to more funding sources including individual investors (both accredited and retail investors) via the stock exchange.

Before the passage of the US JOBs Act in 2012 which laid out regulations for crowdfunding, real estate businesses and developers wishing to finance their projects through REITs had to go through the full process of a public listing in order to take advantage of increased access to funding. Now, however, with real estate crowdfunding companies can create funds for a specific deal or a portfolio of projects and solicit investments from all types of investors (retail to accredited) without jumping through the hoops required for a publicly traded entity.

Market data

To fully understand the impact of real estate crowdfunding, consider the following statistics compiled by CFX Investing :

  • Between 2012 and 2015, real estate crowdfunding portals grew 12 times, to $34.4 billion. The crowdfunding industry is projected to grow to more than $300 billion by 2025.
  • Title III and Regulation A+ is projected to take the pool of possible investors in the US from 8.5 million accredited investors to more than 230 million potential investors.
  • The US commercial real estate market encompasses $7 trillion in value. Of that, only $2.5 billion currently comes from crowdfunding, indicating tremendous growth potential.
  • Alternative assets like commercial real estate currently account for more than 26% of total institutional portfolios.

Numbers like these indicate not only the current impact of crowdfunding, but the huge growth potential it holds.

Regulatory issues and international real estate crowdfunding

Real estate crowdfunding both domestically and internationally is governed by the regulator of the specific country where the deal is being issued. In many cases there are rules defined for the handling of international investors as well as local investors . Fortunately, the adaptability and customization capabilities of crowdfunding platform software allows real estate companies to market their funds to investors in North America, Europe, and Asia-Pacific markets.

Regulation A+ in the US and the UK’s investment savings accounts (ISAs) provide opportunities for a wide variety of investors to participate in crowdfunding real estate projects simply and seamlessly. This provides benefits both by providing access to institutional quality investment opportunities.

White label real estate software

Rather than building custom software solutions, white label real estate software solutions provide firms the option to brand and customize an existing platform for use in capitalizing their projects and working with their investor network. Katipult’s real estate software provides added capabilities for providing liquidity for real estate companies and opportunity for investors.

Get in touch with Katipult and find out how to put their proprietary technological innovations to work for your real estate company or investment firm. Find out how to leverage exceptional tech to create extraordinary opportunities for your business.

Map showing Katipult locations

GET IN TOUCH

900-903 8th Ave SW Calgary, AB T2P 0P7

  • Press Releases

SOCIAL MEDIA

Real Estate Crowdfunding: 7 Platforms for Passive Investing

Learn how real estate crowdfunding offers investors the opportunity to get in on real estate projects with lower barriers to entry, diversify their investment portfolios, and potentially earn returns through rental income or property appreciation.

real estate crowdfunding business plan

Have you ever wanted to invest in real estate but didn't have the capital or experience to buy and manage properties on your own? Real estate crowdfunding platforms allow investors to pool their money with others to invest in real estate and earn returns. With an expected industry growth rate of 16% CAGR from 2023 to 2030, this form of investing is gaining momentum.

In real estate crowdfunding, a group of investors each contributes money to finance a real estate project, like flipping houses, building apartments, or investing in commercial properties. Compared to traditional real estate investing, real estate crowdfunding opens up opportunities to invest small amounts of money into projects you couldn't access.

This investment approach allows you to diversify into different markets and property types while leaving the day-to-day work to professionals. With lower barriers to entry than physical real estate, crowdfunding makes real estate investing attainable for more people.

Let's look at how real estate crowdfunding works, its benefits and risks, and how to start investing in real estate. If you're new to real estate investing or want to add to your investments, crowdfunding real estate could be a good option to consider.

What is real estate crowdfunding?

Real estate crowdfunding is a way of raising capital for real estate investments through small contributions from a large number of individual investors.

In real estate crowdfunding, developers, operators, or sponsors list investment opportunities online. Investors can browse the available deals and invest directly in the ones that fit their criteria.

The real estate sponsors get access to capital for their projects, while the individual investors get exposure to the real estate market. Each investor owns a small piece of the overall property or project.

How does crowdfunding work?

While each real estate crowdfunding platform may have slightly different processes, the general workflow typically follows this basic structure:

  • Sponsor creates a listing: The sponsor is usually a real estate company, developer, or experienced investor who identifies a promising property deal. They provide all the key details about the property, financial projections, and business plans. The sponsor has extensive knowledge of real estate to find profitable opportunities.
  • Investors review the deal: On the platform, investors browse through current property deal listings to find ones that fit their investment objectives. They can filter deals by property type, location, risk level, and target returns. Investors conduct due diligence by digging into the sponsor's background, financials, and market conditions, assessing risks before deciding which deals to commit to.
  • Investors commit funds: Interested investors commit capital toward deals they want to participate in. This lets investors diversify into real estate. They set up an account on the platform to easily manage their investments and track deal updates.
  • Deal gets funded: If enough investor commitments come in to fund the deal amount fully, then it moves forward. Real estate crowdfunding platforms set minimum funding goals to make sure that there's enough capital to purchase and operate the property. If not fully funded, the project doesn't move forward, and investors get a refund of their investment.
  • Sponsor executes the plan: Once funded, the sponsor takes ownership and implements the business plan. This involves purchasing, renovations, property management , leasing, and maintenance. The sponsor handles all real estate work while providing regular progress reports to investors.
  • Investors get paid: As milestones are hit, like generating income and eventually selling the property, the investors receive distribution checks. These distributions represent their share of the returns on the project, typically ranging from 6-12% annually.

Who can invest in real estate crowdfunding opportunities?

If you want to invest through a crowdfunding platform, be aware that there are eligibility criteria due to SEC regulations. These platforms follow specific rules that determine investor qualifications, and there are two main types of investors:

1. Accredited investors : Individuals with high income or net worth, allowing them to access a broader range of investment opportunities.

2. Non-accredited investors : Those with lower income or net worth face more restrictions but are still able to participate in some real estate crowdfunding platforms.

Each platform selects its guidelines within these regulatory frameworks to verify compliance and investor suitability.

Investment structures in crowdfunding

Crowdfunding platforms offer access to different types of asset classes, and they can offer different investment structures, including:

  • Equity investments : Investors own a share in the property and earn returns from rental income and property appreciation.
  • Debt investments : Investors lend money to owners or developers and earn returns through interest payments on real estate debt.
  • Hybrid investments : Includes both equity and debt features, offering a mix of fixed income and potential for appreciation.

Benefits of real estate crowdfunding

Real estate crowdfunding comes with risks like any investment, but it offers several compelling advantages:

  • Diversification: Since the minimums to invest are low, investors can diversify across multiple properties, deals, and markets. This spreads out the risk instead of having substantial capital in just one or two big investments. Diversification improves the stability and consistency of returns over time. Investors can build a portfolio of small stakes in deals rather than saving up 6 figures to buy an investment property.
  • Accessibility: Real estate crowdfunding is more welcoming to those who don't have access to private real estate investments or the capital for physical properties. With traditional real estate investing, you often need hundreds of thousands in capital to buy an investment property directly. Crowdfunding offers exposure to the asset class for as little as $500, making it easier to fund real estate investments for more people.
  • Geographic flexibility: Crowdfunding platforms provide access to deals across the U.S. and even globally. This geographic flexibility allows investors to capitalize on strong real estate markets anywhere, not just in their immediate area. They can invest in cities and property types they believe will perform well but where they can't physically own and manage buildings.
  • Passive income potential: Most real estate crowdfunding investments generate returns in the form of quarterly or monthly cash distributions. This creates a relatively steady stream of passive income for investors without taking out a mortgage or dealing with tenants.
  • Low investment amounts: The minimum investment amount can be as low as $500. But for high net-worth investors, the platforms also offer the option to invest more substantial amounts in the hundreds of thousands on a single deal. The low minimums allow everyday investors to get started while accommodating larger investors, too.

Drawbacks to consider

While real estate crowdfunding provides some significant advantages, there are a few drawbacks to consider:

  • Lower returns than direct ownership: The annual returns from real estate crowdfunding can have lower returns than owning a rental property or doing fix-and-flip deals. These active real estate investments have larger financial rewards because they're more work. The hands-off nature and diversity of investments provide valuable trade-offs for passive investors. For those who don't have the time or experience, or those who simply don't want the hassle of managing properties, crowdfunded real estate investments provide a great way to invest.
  • Illiquidity: There is no active secondary market for crowdfunded real estate investments. So, exiting an investment early can be difficult compared to liquid stocks or bonds that you can sell at any time. Investors need to plan to hold crowdfunding investments for the entire duration of the project, often 5-10 years, depending on the project length.
  • Lack of control: Investors have no decision-making power or direct control over the property. The sponsor maintains full authority over day-to-day management, renovations , leasing, and major decisions. Investors must trust the sponsor's capabilities and track record.

Best real estate crowdfunding platforms

Now that we’ve covered the basics of real estate crowdfunding, let’s take a look at some of the top platforms available today:

Arrived is a real estate crowdfunding platform that allows individuals to invest in rental and vacation homes easily, aiming to provide passive income through rental income and property appreciation . It's designed for U.S. citizens or residents above 18, including non-accredited investors, offering a straightforward process to buy shares in properties.

Arrived manages the properties, making real estate investment accessible and hassle-free. The platform showcases a selection of pre-vetted properties across various markets, with a rigorous diligence process to ensure investment potential.

2. CrowdStreet

CrowdStreet is one of the largest real estate crowdfunding platforms, offering accredited investors access to institutional-quality commercial real estate investments. Their highly selective sponsor vetting provides access to deals brought by experienced real estate companies like Tishman Speyer, Prologis, JLL, and Blackstone.

CrowdStreet deals include major property types like Class A office towers, luxury hotels, high-end retail centers, self-storage facilities, and more. Investors can pick from different risk and return options for each deal. Some deals offer lower risk but stable returns, while others have higher risks but more potential for growth.

CrowdStreet also provides materials for investors to conduct due diligence on sponsors, markets, and financials. Their technology allows seamless investing online into some of the same commercial real estate assets that pension funds and endowments target.

3. DiversyFund

DiversyFund enables non-accredited investors to invest in multifamily properties, making it simple and accessible for everyone. It allows people to invest in a portfolio of multifamily properties with a minimum investment starting at $500.

The platform focuses on creating passive income for investors by targeting undervalued apartment buildings for value creation in strong markets. DiversyFund manages every aspect of the investment process, including property selection, tenant management, and rent collection , providing a hands-off approach to real estate investing.

4. EquityMultiple

EquityMultiple is a leading real estate crowdfunding platform focused on larger commercial real estate projects sponsored by experienced operators with proven track records. The platform screens each sponsor for their expertise across property types like multi family homes , offices, retail, hospitality, and industrial assets.

EquityMultiple offers three main types of investments for accredited investors. You can lend money for interest, get a mix of lending and owning, or fully own a piece of commercial real estate. The first two options are safer and pay you first while owning offers a chance for bigger profits if the property's value goes up.

5. Fundrise

Fundrise pioneered the eREIT model for real estate crowdfunding, allowing investors to build customized portfolios aligned with their goals. Investors choose their own allocation across Fundrise's diversified offerings, including residential, commercial, retail, and industrial.

The eREITs make regular quarterly distributions, providing a steady income. Fundrise carefully vets deals, focusing on major metro markets with strong job and population growth. The platform features an easy-to-use investing experience and low minimums.

Fundrise's proprietary technology and direct structure aim to maximize returns while cutting out middlemen fees. They add new investment offerings on a regular basis, enabling investors to add new projects and keep portfolios balanced.

6. RealtyMogul

RealtyMogul provides accredited investors diversified access to commercial real estate asset classes. Their offerings include private REITs focused on property types like multifamily, retail, industrial, and office.

For hands-off investing, RealtyMogul can auto-invest across multiple deals. RealtyMogul focuses on major metro markets with strong job growth and demographic trends that support real estate fundamentals.

They thoroughly evaluate sponsors and properties for experience, track record, and potential value-creation opportunities. Investors earn monthly or quarterly distributions on cash-flowing properties plus appreciation when sold. RealtyMogul aims to provide an easy online real estate investment experience.

7. YieldStreet

YieldStreet differentiates itself by offering access to alternative real estate-backed investments like marine financing, aviation leasing, legal finance, and art collateralized loans. These unique assets can diversify an investment portfolio and enhance risk-adjusted returns for accredited investors.

However, alternative investments also involve more complexity and higher risks than traditional property deals. YieldStreet carefully screens its niche asset sponsors and collateral while providing transparency into each deal's structure.

Getting started with real estate crowdfunding

Ready to get your feet wet with real estate crowdfunding? Here are some tips:

1. Determine investor status

To get started in real estate crowdfunding, start by figuring out your eligibility. Look over your financials to see if you're an accredited or non-accredited investor. Accredited investors need to go through a verification process on the platform. Knowing this detail is key to deciding which platforms are accessible to you.

2. Research platforms

Start by visiting top real estate crowdfunding websites. Look into:

  • Deal types : See what investments they offer.
  • Sponsor vetting : Check how they assess the people behind the deals.
  • Sponsor experience : Find out what experience the platform requires from deal sponsors.
  • Fees : Note any charges that might affect your returns.
  • Performance history : Review past results to gauge potential success.
  • Investment fit : Verify that their offerings align with your strategy and risk comfort.

3. Compare offerings and returns

Once signed up and approved on your chosen platforms, look into the details of current investment offerings. Consider factors like location, property type, risks involved, business improvement plan, tenant details, projected returns, exit strategy, and more. Then, build a shortlist of 3-5 deals for deeper analysis before you commit funds.

4. Invest wisely

Consider starting small with your first few deals before allocating large amounts. And don't invest money you may need access to in the short-term since crowdfunded deals tie up your cash for a set time period.

Real estate crowdfunding vs. REITs

So, wondering how picking real estate crowdfunding sites stacks up against just going with public REITs? Both let you dive into real estate, but the similarities stop there.

Public REITs are like buying stocks; anyone can do it through the stock market, giving you a piece of various real estate types, from malls to offices.

Crowdfunding platforms, on the other hand, are where you get into the nitty-gritty, investing directly in specific projects. It involves more risk and potentially bigger payoffs, since you're getting in on private deals that don't trade on the open market.

Real estate crowdfunding vs. individual real estate investing

For investors interested in hands-on real estate investing, how does crowdfunding stack up against owning your properties? Here are some key points of comparison:

  • Capital required: Buying properties yourself requires a lot of money upfront for the down payment and renovations. Crowdfunding needs much less money to start, which makes it easier for small or beginning investors.
  • Hands-on work: Owning properties yourself involves a lot of hands-on work, like managing tenants, repairs , and paperwork. Crowdfunding is completely passive — the sponsor handles all the day-to-day work for you. So, you'll have less work but also less control.
  • Leverage: When you buy individual properties, you can take out loans or mortgages to help pay for them, which can increase your potential return but also add more risk. Crowdfunding means you pool money directly into properties with other investors. It's focused more on owning a share of the property and its income rather than borrowing money to invest.
  • Control: Direct owners make all the decisions and have full control over their properties and responsibilities. Crowdfunding investors rely on the sponsor's expertise and have less control.
  • Exit strategy: Selling individual properties has high costs stemming from brokers, taxes , and repairs. Crowdfunded deals have a clear exit strategy from the start, usually selling or refinancing in 5 years or so.

Crowdfunding for real estate investing

Real estate crowdfunding represents an exciting way to invest in real estate. These platforms make commercial real estate more accessible by bringing down capital requirements and opening deals globally.

As with any investment, investors must understand the risks. Performing due diligence on sponsors, understanding illiquidity constraints, and diversifying are key to investing wisely.

Crowdfunding provides a more affordable on-ramp for investors interested in expanding into real estate than traditional real estate investing. When combined with strong portfolio management, crowdfunding can be a valuable addition to generating passive income and diversifying beyond stocks and bonds.

Crowdfunding real estate FAQs

What is the 2% rule in real estate.

The 2% rule in real estate is a guideline that states you should charge at least 2% of a property's purchase price in monthly rent to cover expenses like taxes, insurance, and maintenance.

What is the average return on crowdfunding for real estate?

Returns can differ based on the specific investments and platforms used, but crowdfunding generally aims to provide stable cash flow and moderate appreciation.

Is 1031 crowdfunding legit?

Yes, 1031 crowdfunding is a legitimate way to delay capital gains taxes when selling an investment property. It allows proceeds to be reinvested in a crowdfunded real estate syndication within 180 days while avoiding capital gains taxes.

Important note: This post is for informational and educational purposes only. This post should not be taken as legal advice or used as a substitute for such. You should always speak to your own legal counsel before taking action.

Author Photo

Nichole co-founded Gateway Private Equity Group, with a history of investments in single-family and multi-family properties, and now a specialization in hotel real estate investments. She is also the creator of NicsGuide.com, a blog dedicated to real estate investing.

Rental rundown background image

Whether you’re a property owner, renter, property manager, or real estate agent, gain valuable insights, advice, and updates by joining our blog.

Latest posts

Can you write off hoa fees on rental property.

As a real estate investor, you're constantly looking for ways to reduce your expenses and increase your bottom line. One significant cost that you may have are homeowner's association (HOA) fees. This guide will give you answers on deducting these fees and information on how to maximize your overall tax deductions.

Can My Landlord Ask for Additional Security Deposit?

Here, we take a look into the circumstances under which a landlord can legally request an additional security deposit, highlighting the role of state-specific laws and tenant rights in such scenarios. We provide an insightful overview of how changes in rental conditions, property modifications, or adjustments in lease terms can prompt landlords to seek extra security deposits, ensuring that tenants are equipped with the knowledge to handle these requests appropriately.

Multifamily Operating Expenses: A Comprehensive Guide

What are all the operating expenses you can expect as a multifamily investor? Learn the typical operating expense categories, how to track your performance against other properties, and strategies to reduce costs.

Seamless Rent Collection

  • Fast Payouts
  • Auto-Reminders

real estate crowdfunding business plan

Effortless rent collection

Collecting rent has never been easier.

Enjoy free, online rent collection services that adopt to you and your tenants' needs

real estate crowdfunding business plan

2024 Calls for Effortless Rent Collection

Are you ready to streamline your rent collection process?

With Azibo's free online rent collection, managing properties becomes a breeze.

real estate crowdfunding business plan

How to Start a Real Estate Crowdfunding Platform

phil v

Real estate crowdfunding is a way of financing property development projects through debt or equity instruments. Crowdfunding is most commonly used to finance buy-to-rent and buy-to-sell projects including:

  • Property development
  • Unit renovation 
  • Land acquisition
  • Facilities provision for real estate projects, etc.

The capital for various projects can be raised from everyday investors and sophisticated or high-net-worth individual and corporate investors who will expect to get the returns on their investment in terms of dividends or in full after successful deal closure. 

What you will learn in this post:

How much is the average deal size in real estate crowdfunding?

An average deal size of the real estate crowdfunding projects is a good indicator of the market capacity which you can analyse and measure before looking to start a real estate crowdfunding business. 

The average amount raised for real estate projects, usually, is somewhere between $500,000 – $4M or higher. 

Often, crowdfunding for real estate is necessary for a particular purpose. In other words, crowdfunding is used as an instrument to finance a certain part of the whole project while the overall deal size may vary from $1M to $10M, $15M to $50M or higher. However, crowdfunding represents only some part of that deal; often, a seed investment.  

What real estate crowdfunding niches you can enter as a platform owner

To brainstorm real estate crowdfunding platform niche ideas effectively, you can look into commercial and residential real estate and industries.

Commercial real estate:

  • Office buildings
  • Shopping centres
  • Medical buildings
  • Multi-family commercial

Residential real estate:

  • Luxury houses
  • Terraced houses
  • Multi-family residential

If you’d like to position your business in a particular niche you may look into more specific industries like:

  • Agriculture (warehouses, farms, lands)
  • Industrial real estate (building units, equipment)
  • Education and fitness (schools, gyms)
  • Travelling (vacation homes, cottages, hotels)

You can combine the offerings, invest only in the income-producing properties and not risk investing in ground-up construction or land, and do whatever else you have experience working with.

Overall, your choice of the niche of a real estate crowdfunding website will depend on your expected deal size, liquidity, risk tolerance, and other factors. 

Does a property crowdfunding niche impact the platform on the technology level?

The choice of an industry does not affect the core functionality of a real estate crowdfunding platform. However, other things such as debt or equity investing will affect your platform’s core workflows at the development stage. 

These investment flows are fundamentally different and are calculated in a different way. As a business owner, you may want to entitle different investors to different dividends and schedule repayments. In other words, the functionality of your platform will depend on the preferred money flows including:

  • Payment processing
  • Escrow, pledge 
  • Lock-up period 
  • Capital structure
  • Fees structure, etc. 

Peculiar to your niche, the design of your marketing website and a web portal has to be developed while the additional features in the admin panel may be added as per your request. 

As a real estate crowdfunding software developers, our LenderKit team provides a feature-rich admin back office, web portal for investors and borrowers, and marketing site tailored for real estate crowdfunding. 

How to build a crowdfunding platform for real estate

Examples of real estate crowdfunding platforms

The best way to get started with a real estate crowdfunding platform is by learning from your competitors. In 2020, you’ll probably be a pioneer with your property crowdfunding software in some markets, so you have higher chances of hitting your business objectives. 

Here are 3 examples of real estate crowdfunding websites that are steadily growing. 

EquityMultiple

EquityMultiple is a commercial real estate crowdfunding platform with $131 million assets under management and over $1 billion total deal value, according to the InvestorJunkie .

EquityMultiple is focused on individual, accredited, investors since the very beginning. With a minimum deal target of $500,000 and a minimum investment of $10,000, the platform has experienced rapid growth at a steady pace of 100% year-over-year.

equity-multiple-crowdfunding-platform-1100x484 How to Start a Real Estate Crowdfunding Platform

Investment Advisors Near Me: The Ultimate How-to-Find Guide

crowdfunding for real estate development

Crowdfunding for Real Estate Development: How Does it Work?

Investment calculators

Top 5 Investment Calculators and Why You Need Them

Schedule a live demo, thanks for your interest in our solution.

We'll get back to you shortly and answer any questions you may have.

PropertyMetrics

The Definitive Guide to Real Estate Crowdfunding

January 3, 2023

Real estate crowdfunding

You’ve seen the news headlines about real estate crowdfunding and how it is changing the commercial real estate industry . In this article we’ll cover real estate crowdfunding in depth and give you a solid overview of what is possible with crowdfunding real estate investments and also where you need to be cautious. Note that this article has been updated as of December 2015 to reflect the latest Title III regulations, which allow non-accredited investors to fully participate in investment crowdfunding.

The JOBS Act Gives Birth to Real Estate Crowdfunding

It’s hard to be on the web without coming across an article about some new crowdfunding startup. The power of using a group of strangers to raise money for everything from funding a children’s TV program about the power of reading to finding investors for a promising new commercial real estate venture seem to be the fulfillment of all the promises of what the Internet could be. But, not all crowdfunding is the same. When the JOBS Act was signed in 2012, it was, in part, targeting a very specific type of crowdfunding.

Consumer Crowdfunding and Investor Crowdfunding

Kickstarter is the most famous crowdfunding platform in the world. But, Kickstarter is a consumer facing platform. It does not allow people to invest in companies and products in the strict legal and financial sense. Instead entities post a project on Kickstarter and ask for donations. Often, the companies promise that sponsors will be given rewards at certain levels. But, one thing they cannot promise is shares or any type of financial return on an investment. Instead sites like Kickstarter are really offering the chance for companies to get people emotionally invested and to pre-purchase products, but not to raise investment capital.

While Kickstarter has funded some impressive products, allowing a handful of entities to raise money in the seven figures, it and other consumer facing platforms pail in comparison to what investment crowdfunding can do.

Companies who are seeking infusions of capital used to be strictly limited on who they could approach because of SEC rules about solicitations and accredited investors. But, with the JOBS Act, investment crowdfunding is possible. If the proper procedures are followed, a company that needs accredited investors doesn’t have to be limited to the people in their network. Instead they can recruit investors from anywhere, so long as they meet the SEC requirements for being an accredited investor. The investors in these types of ventures get equity, subjecting them to the risks of losing their investment and giving them access to the rewards of a successful business.

Even more exciting is that investment crowdfunding is not limited to accredited investors. Under certain conditions, regular consumers can receive the benefits of investment crowdfunding. They can place their money in real estate projects all over the world, and grow their nest egg from their home computer.

Crowdfunding is Changing Real Estate Syndication

Prior to the JOBS Act, one of the major ways real estate projects pooled financial resources was through syndication. Syndication has been used for generations in real estate investments. In a real estate syndicate a sponsor would find the property and manage the transaction and put up some small percentage of the capital for the project. Investors would then fund the majority of the project and the profits from the project would be split according to the equity invested.

The problem with syndication is that under the rules that govern investments it was difficult to find investors. Rules limited who you could market to. You almost always needed some pre-existing relationship outside of the investment with a potential investor before you could solicit him or her. Sponsors sometimes would spend months or years making connections and going to networking events with the sole purpose of creating pre-existing relationships to later leverage into syndication possibilities. The investors themselves often had to meet specific requirements before you could legally allow them to invest money in your project.

Real estate crowdfunding uses the same principles of pooling capital as syndication, but leverages the changes in the rules brought by the JOBS Act to make it easier to find investors. Crowdfunding is like syndication, only with more latitude in the solicitation rules and without the need for preexisting relationships between the sponsor and the investors. In some cases you can also seek out investors who traditionally would not have been eligible to invest in a real estate syndicate because they lacked sufficient income or assets to qualify as an accredited investor.

Brief History of the JOBS Act

President Obama signed the bipartisan Jumpstart Our Business Startups Act (JOBS Act) on April 5, 2012. The bill made several sweeping changes to securities law and modernized many aspects of the way startups were treated by the law. One of the biggest changes was the legalization of investment crowdfunding.

The JOBS Act is made up of seven different titles:

Title I: Reopening American Capital Markets to Emerging Growth Companies

Title II: Access to Capital for Job Creators

Title III: Crowdfunding

Title IV: Small Company Capital Formation

Title V: Private Company Flexibility and Growth

Title VI: Capital Expansion

Title VII: Outreach on Changes to the Law

The biggest changes for real estate investing purposes are mostly in Title I through Title IV. These sections of the law also required the most action from the SEC.

Although the law was passed in 2012, various elements only took effect later. The SEC was required to implement several new rule changes before the law could fully take effect. The SEC enacted the last major piece of the legislation with the approval of a set of regulations for Title III in October of 2015.

Regulation D: What Can You Advertise?

The big advantage to crowdfunding over traditional real estate syndication is the ease of finding investors for a given project. But, the SEC has traditionally only allowed advertising and marketing, also known as solicitation, under very narrow circumstances for investment projects. But, crowdfunding will not work without the ability to advertise offerings to investors.

The Regulation D Limits

Regulation D allows smaller companies to raise capital without going through the onerous and expensive process of registering securities with the SEC. However, the trade off for taking advantage of Regulation D has traditionally been Rule 506 of Regulation D. Rule 506 forbids “general solicitation” of investors. This means, among other things, that companies couldn’t use mass market advertising to raise attention about the offer. Under the language of Rule 506 and the narrow interpretations, it also meant that some type of pre-existing relationship be present before a project sponsor could approach an investor with an opportunity.

The trade-off for this general solicitation ban was that non-accredited investors could be approached, so long as they were sophisticated and were given the type of information that would be required in a public offering that was to be registered with the SEC.

The purpose of the ban against general solicitation in private offerings was to prevent fraud and protect investors, especially the non-accredited investors that had access to Regulation D private offerings.

When the JOBS Act was passed, Rule 506 of Regulation D meant that real estate crowdfunding companies couldn’t exist because being on the web in any way that attracted investors would be general solicitation.

2013 Changes to Regulation D

The SEC finally made significant changes to Regulation D in 2013 to begin making investment crowdfunding possible. The biggest change was the formulation of rule 506 (c), which among many other things, allowed for private offerings to begin general solicitation.

However, the SEC remained concerned about possible fraud on the parts of startups and the ability of bad actors to gain control of weak or unsuspecting companies and use them to commit fraud or other kinds of bad acts. As a result, when the SEC created an exemption from the general solicitation ban, it also increased other fraud safeguards, which make it more challenging to recruit investors to a private offering.

The Changes and the Rise of Crowdfunding Portals

While many investors were unhappy that the SEC didn’t make it even easier for private offerings to attract investors, the investment crowdfunding sector began setting up shop. Platforms, including many real estate investment crowdfunding startups, began to raise capital and plan to begin operations now that they could qualify for the exemption to the general solicitation ban.

The 2013 changes redirected the concern of investment projects from the solicitation ban, to the new strict requirements for verifying investors were accredited. The regulations for Title III of the JOBS Act opened up some opportunities for non-accredited investors. This leaves portals the choice of two different groups of investors to target. They can work under the constraints of Regulation D and Rules 506 and 506(c) and pursue accredited investors, or they can work under they even stricter constraints for Title III that allow for the targeting of non-accredited investors.

Accredited Investors and Rule 506 and 506(c)

Most real estate projects are undertaken by relatively small companies or syndicates that use the private offering provisions of Regulation D to avoid the burdensome registration requirements that they would otherwise have to fulfill. Under Rule 506 before the 2013 changes, unaccredited investors could invest in these types of projects, but the company had to obey the solicitation ban. But, as required by the JOBS Act, the SEC amended rule 506 by adding Rule 506(c).

The Burden of Certifying Investors

Rule 506(c) eliminates the general solicitation ban, but only allows accredited investors access to the project. It also requires the company to undertake the responsibility of verifying that every investor is an accredited investor. The verification process can be time and labor intensive. Most companies lack the internal resources to verify investors, and instead increasingly outsource this task to third parties. However, the company itself remains responsible for the adequacy of the verification.

The SEC defines an accredited investor as someone who meets one of two requirements. They must either have a net worth of at least $1 million, not counting their primary residence, or have an income of $200,000 for single investors and $300,000 combined for a married couple, a year, for the past two years.

Verifying that someone is an accredited investor is often more complicated than just looking at a tax return, and can be as involved as a general financial audit. While any number of firms offer to verify investors, there is some concern about firms too anxious to provide positive results for their customers and introducing fraud into the system.

Does Solicitation Increase Fraud?

The stated purpose of the general solicitation ban was to lessen instances of fraud in private offerings. Many at the SEC and in private watchdog groups worried that allowing any exemption to the ban would increase fraud. To counterbalance this new threat of corruption, additional safeguards, including the requirement to independently verify investors, were added. But, it remains unclear if there is any link between solicitation and fraud in the first place.

SEC enforcement actions since the enactment of Rule 506(c) have not shown any increase in fraud, but instead have shown the SEC’s desire to crack down on so called broker-dealers, even in cases completely absent of fraud.

The SEC requires brokers register with the SEC, but the agency seems to be widening whom it considers to be a broker. Anyone who receives compensation, even a company employee, for helping to find investors might need to register as a broker to avoid negative SEC consequences. The SEC seems to be sending the message there is not any exemption to this registration requirement.

Does Rule 506(c) Apply to Crowdfunding?

When the SEC made the changes to Rule 506 it was enacting Title II of the JOBS Act, which does not specifically cover crowdfunding. Instead, Title III of the JOBS Act is the investment crowdfunding part of the legislation. Because the SEC took so long to enact Title III, many crowdfunding portals initially focused only on accredited investors.

506(c) is intended to only cover private offerings to accredited investors. However, many real estate crowdfunding and investment crowdfunding platforms made their offerings fit not under the actual crowdfunding part of the Jobs Act, but instead under the Title II rules.

The official position is that Rule 506(c) does not apply to crowdfunding, as that will require further rulemaking at the SEC. But, so long as companies follow all of the rules and regulations, including those that require investor verification, they may be able to create an offering that looks like investment crowdfunding, but is legally just a private offering.

Regulation A+: What Needs to be Registered?

The SEC issued changes to Regulation A+ as part of its duties under Title IV of the JOBS Act in March of 2015. Like the earlier Rule 506 and 506(c) changes, these regulations do not deal directly with the investment crowdfunding portions of the JOBS Act. Many of the provisions of Regulation A+ opened up real estate investment opportunities to non-accredited investors.

The New Regulation A+ Changes

Regulation A lays out the requirements for registering securities with the SEC. The problem with the original Regulation A is that in addition to the federal registration rules, companies have to also comply with different state registration rules in every single state where the securities are sold.

Regulation A+ has two different tiers. Tier I offerings are any offering under the regulation where $20 million or less in capital is raised within twelve months. These offerings will still require companies to register securities with both the SEC and state regulators. Tier II offerings are those there the company raises more than $20 million and less than $50 million within twelve months. Companies raising more than $50 million are not eligible for Regulation A+ treatment.

Under the March 2015 changes SEC rules will preempt state registration rules for any Tier II offerings. Additionally, anyone can invest in Regulation A+ offerings, no matter what tier. Even non-accredited investors can participate in Regulation A+ offerings.

There is a catch with the new regulations. There are strict limits to the amounts non-accredited investors can invest in these offerings. The amounts vary depending on net worth. However, unlike the burdensome requirements under Regulation D Rule 506(c), investors under Regulation A+ can self certify. This saves companies from what could have been a verification process even more cumbersome than the Rule 506(c) one.

Other changes include the requiring audited financial statements for companies seeking Tier II offerings and requiring investor circulars be pre-approved by the SEC.

How Does Regulation A+ Impact Crowdfunding?

Because Regulation A+ does not have a general solicitation ban and non-accredited investors can participate in these offerings, it seems possible for a real estate project to get capital from a large dispersed group of people in a similar way to crowdfunding.

Any real estate crowdfunding targeted at non-accredited investors will have to meet the requirements the SEC announced in October 2015 as part of its regulations for Title III investment crowdfunding.

What is legal under Regulation A+ is “accredited crowdfunding”. Offers that conform to the rules of Regulation D Rule 506 (c), where only verified accredited investors participate is the type of “accredited crowdfunding” that is legal. But, likely few real estate crowdfunding projects will be pursued on this basis now that the SEC has finally opened the way for investment crowdfunding as long anticipated when the JOBS Act was passed in 2012.

Some platforms were already working on helping to attract non-accredited investor money to real estate projects in compliance with Regulation A+ prior to the most recent regulations. This included providing detailed disclosures and having a system for investors to self-certify. However, the SEC will likely not allow this type of runaround of its crowdfunding regulations now that they have been approved.

What Are the Advantages and Disadvantages of a Regulation A+ Offering?

The biggest advantages of a Regulation A+ offering include being able to use advertising to access more capital from a bigger pool of investors and, in many cases streamlined registration requirements. However, there are several significant downsides to one of these offerings as well.

Regulation A+ only allows for streamlined registration in projects between $20 million and $50 million. If a project is smaller, it will still have to abide by both state and federal registration requirements. If the project is smaller than $5 million, it’s not clear that a Regulation A+ offering can even be made.

The new changes also require a lot of expensive audited reports and regulatory paperwork. Regulation A+ may be a great vehicle for fast growth companies and real estate projects that are large in scope, but the reporting requirements will most likely be too expensive for smaller operations.

Title III Crowdfunding Regulations

After more than three years of waiting, the SEC finally released the proposed regulations for Title III of the JOBS Act. This step will finally allow non-accredited investors to fully participate in investment crowdfunding. The rules will not be in full effect until June 2016, but the process for online crowdfunding portals to register with the SEC will begin the end of January 2016.

The Rules for Investors

While non-accredited investors will be able to participate in crowdfunding, individuals will be limited in the amounts they are able to invest. Investors with a net worth of less than $100,000 can only invest either $2,000 or 5% of their annual income or net worth, whichever is greater, a year. This means that most investors in this category are limited to investing less in equity crowdfunding than they can put into an IRA each year.

Investors with a net worth of $100,000 or more can only invest up to 10% of the lesser of their net worth or annual income a year in equity crowdfunding securities. No investor is allowed to purchase more than $100,000 in crowdfunding securities in any 12-month period.

Investors will not be allowed to sell their crowdfunding securities for at least one year in most circumstances. Investors will not be required to register their crowdfunding securities so long as the issuer is in full compliance with SEC reporting obligations is has less than $25 million in assets.

The Rules for Companies and Sponsors of Crowdfunding Projects

Companies that wish to raise money through equity crowdfunding, whether for real estate investment or any other reason, can only raise $1 million in a 12-month period. Companies will also be required to use a portal or broker-dealer that has already registered with the SEC to handle the offerings.

Companies will also face extensive reporting and disclosure requirements under the new regulations. Companies will need to disclose information about the officers, directors, and owners of more than 20% of the company. The company must describe its core business and how the money raised through crowdfunding will be used. Pricing information such as the method for determining price of the securities, the fundraising goal, and the deadline for the fundraising must also be disclosed to investors.

The SEC also requires companies seeking to make a Title III equity crowdfunding offer to disclose details about the ownership and capital structure. Any select-party transactions must also be disclosed. Companies will need to describe all of the material terms of any indebtedness along with a statement about the company’s financial condition.

In most cases, first time crowdfunding efforts will not require an audited financial statement. However, a reviewed financial statement, at a minimum, will always be required. Under certain conditions after the first round of crowdfunding, an audited financial statement will be required.

The Rules for Crowdfunding Platforms

The proposed SEC regulations require that all equity crowdfunding take place through a SEC registered broker dealer or portal and that the funding takes place exclusively online.

The funding portal is a new type of SEC registered entity. Registration for funding portals will open the end of January 2016. The platforms that will manage the equity crowdfunding process for companies will be required to provide investors with the mandatory educational materials, act to reduce the risk of fraud in the system, disseminate or make available all the information about the offering and the issuer, and provide communications channels to allow for discussions about the offering on the platform. These requirements are on top of the main job of the portal to actually facilitate the offering and sale of crowdfunding securities.

The portals are prohibited from making any investment advice or recommendations. The portals are also banned from soliciting the offers to buy securities offered on the portal website. This includes a prohibition on soliciting purchases or sales of the securities available on the portal website.

Portals are also not allowed to hold, possess, or handle investor funds or securities. Many restrictions also limit the ability of a funding portal to compensate people for solicitations.

Possible Drawbacks to the New Regulations

While no one is accusing the SEC of acting rashly with its latest regulations on investment crowdfunding, many have expressed concerns about the regulations being too limiting.

The two biggest concerns are the $1 million annual limit and the exhaustive reporting and disclosure requirements. For real estate investors the $1 million annual limit immediately takes many types of lucrative commercial and residential real estate projects off of the table. Non-accredited investors may be left with only investing in smaller projects that often have lower rates of return.

The reporting and disclosure requirements will be expensive to implement, monitor, and maintain. There is some concern that when combined with the $1 million annual limit on securities sold through crowdfunding, the cost of the disclosure requirements will be too onerous for most real estate projects.

What Can Legally be Done Now?

The SEC has created two different investment crowdfunding tracts. Non-accredited investors will be limited to opportunities governed by the new Title III regulations. Accredited investors will be able to invest in the kinds of crowdfunding deals governed under the revised Regulation D and Regulation A+.

The Title III regulations will not be in full effect until the middle of 2016. Non-accredited investors will have to wait until then to take advantage of investment crowdfunding.

Even though a full-fledged real estate crowdfunding platform is not yet legal, accredited investors can continue to take advantage of investment opportunities under Regulation D Rule 506 and 506(c) and Regulation A+. Many of these opportunities provide many, if not all, of the advantages of investment crowdfunding to both the investor and the company issuing the securities.

guest

Don't miss our new content.

Proforma Publisher Courses

Blog Resources Solutions Commercial Real Estate Courses

Contact Terms Privacy

real estate crowdfunding business plan

FinanceBuzz

Trending Stories

real estate crowdfunding business plan

15 Legit Ways to Make Extra Cash

real estate crowdfunding business plan

6 Smart Strategies to Save Money on Car Insurance

Real estate crowdfunding: how it works and 7 platforms to consider.

Lance Cothern

This article was subjected to a comprehensive fact-checking process. Our professional fact-checkers verify article information against primary sources, reputable publishers, and experts in the field.

Real estate crowdfunding

We receive compensation from the products and services mentioned in this story, but the opinions are the author's own. Compensation may impact where offers appear. We have not included all available products or offers. Learn more about how we make money and our editorial policies .

Real estate crowdfunding platforms are a popular option for investing in real estate without buying individual properties. But until recently, real estate crowdfunding​​ wasn’t something you could easily do. Companies couldn’t publicly solicit investors to invest in private real estate projects. Instead, they had to rely on their personal connections to gather investors.

This changed when Congress passed the Jumpstart Our Business Startups Act (JOBS Act) in 2012. After this law passed, companies could now advertise these investment opportunities publicly. Although the law didn’t likely intend to enable real estate crowdfunding sites to begin operating, the result allowed this to happen.

Several sites exist that provide different opportunities for potential investors. Here’s what you need to know.

What is real estate crowdfunding?

7 real estate crowdfunding sites, pros and cons of real estate crowdfunding, bottom line.

Real estate crowdfunding involves pooling the money of several investors to purchase properties.

Generally, crowdfunding companies that facilitate this type of investing complete due diligence on properties to make sure they meet the company’s investment goals. Then, they manage the properties in accordance with the goal of the investment. Usually, this involves renting out the property to tenants, improving the property, or holding on to the property for appreciation.

Although the company holds the real estate, it pays out profits to shareholders in the form of dividends. Eventually, the proceeds from the sale of the property will likely be distributed to shareholders, as well.

Just as you can invest with one of several traditional brokerage firms, several real estate crowdfunding sites exist. Each offers its unique twist on real estate crowdfunding.

Some cater to accredited investors who meet certain net worth or income requirements, whereas others offer options for nonaccredited investors. Similarly, they may focus on different portions of the real estate market or different geographic areas.

1. Crowdstreet

Crowdstreet provides a few ways accredited investors can invest in commercial real estate deals. Investors who prefer to invest in a fund can invest in one of several options in its marketplace. Alternatively, you can choose individual commercial properties you believe will perform best based on the information provided. Another option is investing in a customized portfolio of unique properties based on your investment goals and profile.

Investments start at $25,000, but may require up to $100,000 to begin investing.

Requirements:

  • Accredited investor status: Required
  • Minimum investment: $25,000 or more

Read our full Crowdstreet review ...Or visit Crowdstreet

2. DiversyFund

DiversyFund allows investors to start investing in a single portfolio of multifamily real estate buildings with just $500. The company structures its investment as a real estate investment trust (REIT), called the Growth REIT.

The Growth REIT is a non-traded public investment qualified by the U.S. Securities and Exchange Commission. This means it’s not publicly traded on the stock market, but it’s subject to strict reporting requirements, similar to a publicly traded company. It only invests in apartments and does not invest in any single-family homes.

DiversyFund handles picking the buildings to invest in within the REIT and professionally manages the properties. The company renovates the properties as necessary and eventually sells them once it believes it is time to move on to a new property.

  • Accredited investor status: Not required
  • Minimum investment: $500

Read our full DiversyFund review

3. Fundrise

Fundrise allows everyday investors to start investing in the real estate sector with as little as $10. The company focuses on providing investments that contain high-quality assets, including debt and equity investments in commercial, residential, and other types of real estate.

The types of investments you can make depend on how much money you have set aside. Simple investments in registered products, or products offered on markets, start at the $10 mark. If you want to access private funds, such as eREITs, you need at least $5,000 to get started. Fundrise does offer some accredited offerings, but you need an initial minimum investment of $100,000 to access these opportunities.

  • Minimum investment: $10

Read our full Fundrise review

4. EquityMultiple

EquityMultiple lets accredited investors invest in professionally managed commercial real estate. EquityMultiple evaluates potential investment opportunities, selecting only 5% of the opportunities they consider.

The platform offers three different investment options:

  • Short-term diversified notes
  • Individual properties

The minimum investment starts at $5,000 for their short-term diversified notes investment option. Direct investing in individual properties using debt, preferred, or common equity starts at $10,000. Finally, you can invest in funds that provide diversification using debt, equity, opportunity fund, and commercial real estate securities starting at $20,000.

  • Minimum investment: $5,000

Read our full EquityMultiple review ...Or visit EquityMultiple

5. GROUNDFLOOR

GROUNDFLOOR has one of the lowest initial minimum investments of the real estate crowdfunding sites at just $10. This platform offers short-term, high-yield real estate debt investments originated by GROUNDFLOOR. As an investor, you get to choose which real estate projects you want to invest in, which allows you to diversify if you wish.

Essentially, these debt investments are secured by single-family homes, multifamily homes, townhouses, condos, planned unit developments, or even new construction. This provides some protection in case loans default because the properties can be foreclosed on. Thankfully, GROUNDFLOOR tries to work with borrowers before moving straight to foreclosure to try to resolve the situation.

Requirements :

Read our full Groundfloor review ...Or visit Groundfloor

6. RealtyMogul

RealtyMogul offers two classes of investments for investors to consider. The company offers two REITs: Mogul REIT I and Mogul REIT II. Each has a $5,000 minimum investment and different objectives to provide options to potential investors.

Private placement investments may include multifamily, office, industrial, self-storage, retail, and medical office buildings. These have higher minimums, such as $25,000 or more. Accredited investors can invest in both, whereas nonaccredited investors can invest only in RealtyMogul REITs.

  • Accredited investor status: Not required for REITs / Required for private placement investments

Read our full RealtyMogul review ...Or visit RealtyMogul

7. PeerStreet

PeerStreet allows accredited investors to invest in real estate debt backing specific properties. You can invest in several types of loans with different terms, loan strategies, and other factors. In total, this investment platform provides hundreds of data points for you to analyze.

To start investing in real estate debt on the platform, you’ll need a minimum investment of $1,000. The low $1,000 minimum could allow you to diversify your investments across several loans and help to minimize the impacts of underperforming assets.

  • Minimum investment: $1,000

8. CollabHome

CollabHome is a crowdfunded student housing real estate platform. Through CollabHome, you can co-own an income-generating student housing property for as little as $500.

Investors own shares of student housing real estate, then they get potential dividends paid monthly. Each year, CollabHome collects millions of dollars in rent, all while making student housing better.

Visit CollabHome

  • Lower investment than purchasing a property: Traditional real estate investing required you to pay cash or take out a mortgage on a property, which is typically a costly endeavor. Real estate crowdfunding could allow you to begin investing with as little as $10.
  • Avoid managing properties: Crowdfunding takes property management out of your hands. Although you may be able to select which properties you invest in, you don’t have to pick tenants or deal with late-night phone calls if the air conditioner stops working.
  • Diversify your investment portfolio: Crowdfunding could let you invest in several properties with lower minimums to diversify your portfolio, rather than investing all of your money in a single rental property. REITs and managed portfolios are also options to diversify across real estate asset classes or multiple properties.
  • Earn dividends: REITs are structured in a way that requires them to pay out a large portion of their net income in dividends, which could provide income to investors.
  • Can be an illiquid investment: Many real estate crowdfunding sites offer investments that are not publicly traded. If you need to liquidate your portfolio, these investments may not be able to be sold quickly. Even if you can sell them, you might have to pay fees to cash out early.
  • May have to be an accredited investor: Several real estate crowdfunding sites require you to be an accredited investor to invest in specific opportunities. If you do not meet the income or net worth requirements, you cannot invest with these platforms.
  • Risks related to the real estate market: Real estate has risks just as with any other asset class. The real estate market crash of the early 2000s showed real estate prices could drop significantly in a short period. The COVID-19 pandemic showed that even the most reliable renters might not be able to make their rent payments due to job loss.
  • Potentially high minimum investment: Some crowdfunding websites have investment minimums as low as $10. However, other investment options require $100,000 or more to start.

Can you make money with real estate crowdfunding?

It is possible to make money by investing money in real estate crowdfunding investments. Your investments might pay dividends or increase in value in the future. As an investment, real estate crowdfunding also comes with a risk of loss. It’s impossible to perfectly predict returns, as with any other investment.

What is the best real estate crowdfunding site?

The best real estate crowdfunding site for you will depend on your particular situation. For instance, accredited investors might prefer sites that present investment options for their accredited investor status, whereas nonaccredited investors will likely gravitate toward other sites offering options for them. To find the best site for you, evaluate the type of investment, expenses, and risks each opportunity offers. Then, pick the site that fits your needs best.

Is real estate crowdfunding worth it?

Crowdfunded real estate might be an option for you if it helps you meet your investment goals. These sites could help you diversify your portfolio and potentially earn passive income and future returns. That said, they might come with risks beyond what your investment plan calls for. If that’s the case, real estate crowdfunding might not be the best option for you.

Becoming a real estate investor doesn’t have to involve purchasing a property on your own. Instead, you can take part in crowdfunded real estate investments. Investing in this way is often less expensive than buying individual properties, and it could be an excellent way to build a diversified portfolio.

However, crowdfunded real estate may not be the best investment option for everyone. If you’re interested in exploring alternatives, check out our guide on how to invest in real estate .

FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.

Invest Like a Real Estate Mogul

Crowdstreet

Crowdstreet Benefits

  • Get access to unparalleled institutional commercial real estate
  • CrowdStreet has launched 560 deals
  • $360M in investor distributions and new deals listed with high frequency
  • Limited to accredited investors

Author Details

Lance Cothern

  • Credit Cards
  • Best Credit Cards
  • Side Hustles
  • Savings Accounts
  • Pay Off Debt
  • Travel Credit Cards

Want to learn how to make an extra $200?

Get proven ways to earn extra cash from your phone, computer, & more with Extra.

You will receive emails from FinanceBuzz.com. Unsubscribe at any time. Privacy Policy

  • Vetted side hustles
  • Exclusive offers to save money daily
  • Expert tips to help manage and escape debt

Hurry, check your email!

The Extra newsletter by FinanceBuzz helps you build your net worth.

Don't see the email? Let us know.

We use cookies to ensure that we give you the best experience on our website. If you continue without changing settings, we'll assume that you are happy to receive all cookies.

How to Start a Real Estate Crowdfunding Platform

Real estate crowdfunding reached an all-time high during the Corona crisis. Property crowdfunding deals increased considerably, accounting for 17% of all investments for the post-pandemic period. As lenders slowed down their activities during the pandemic , more sponsors turned to real estate crowdfunding sites as a source of capital needed to carry out their projects. 

Given a stable growth in the demand, building a real estate crowdfunding platform presents an alluring business opportunity in 2023. Based on our six-year experience in real estate development , the JatApp team has prepared this article to clear up any uncertainties that you might have when planning to create your own real estate crowdfunding platform . 

What is real estate crowdfunding ? Definition and examples  

Real estate crowdfunding is the practice of financing a property project with relatively small contributions from a large number of investors. Crowdfunding allows businesses to quickly raise money for property projects while enabling investors to become shareholders in real estate or a company. Real estate crowdfunding platforms serve as a marketplace connecting investors and sponsors or, in other words, businesses running the deal. 

We’ve analyzed the real estate crowdfunding market in search of key players and new successful startups. Here are three good examples to look up to. 

Concreit is an online platform that lets users invest in real estate for as little as $1.The company empowers people, regardless of their income, to benefit from real estate investment opportunities that were once possible for wealthy individuals only. 

The platform makes profits by charging a 1% fee for investment portfolio management. Apart from that, the startup receives part of the profit when all fees are paid out to investors. Concreit also charges the commission from users who withdraw their investment earlier than by the end of the term.    

Concreit app functionality

Concreit app functionality

Fundrise is one of the largest real estate crowdfunding platforms for non-accredited investors . The company acquires an asset for less than its estimated value and makes renovations over time. Before any real estate project gets accepted, the platform performs a comprehensive due diligence process to evaluate whether the property is worth fundraising. Once Fundrise approves and renovates the asset, investors can receive passive income from having shares in the property.  

The company charges a fee from users for giving advice on their investments. Apart from that, real estate investors are expected to pay a fee for asset management on an annual basis.

Fundrise dashboard

Fundrise dashboard

  • Crowdstreet

Crowdstreet is an online platform that offers commercial real estate investment opportunities to accredited investors . The company’s advisory services allow investors to compare deals and find real estate that matches their unique needs. 

Crowdstreet has a pretty straightforward real estate crowdfunding business model . Sponsors pay the company for raising money on its platform and for using software that manages multiple deals.  

Crowdstreet app functionality

Crowdstreet app functionality

Types of crowdfunding investments 

Crowdfunding investments types, otherwise known as crowdfunding deals, define investment opportunities . You may find two kinds of deals on real estate crowdfunding platforms: debt and equity deals.

Investors that opt for debt deals act as a bank. They lend their capital to property owners and receive payments at a set rate of interest. The original amount of capital is paid back to investors at the end of the term. Debt investing is a good choice for investors who are searching for a relatively low-risk offer and fixed rate. 

Equity deals

Equity deals make investors part owners of real estate. Equity investments usually have higher investment risks, but promise greater returns than debt investments. There are three types of equity investments, namely, single syndication , funds , and real estate investment trusts (REIT). 

  • Single syndication 

Single syndication deals allow investing in a single real estate and include apartment and syndication deals. 

If it’s an apartment deal , the sponsor takes investors’ money to buy an apartment building and make renovations to increase its rental income. Investors are paid a set fee before sponsors receive any income. Once sponsors get their returns from investment, they pay back investors a percentage from profits. 

Syndication deals typically refer to financing new constructions. Unlike apartment deals, investors get the percentage from the profits once the property is sold or rented, plus their original capital investment at the end of the term. 

Funds enable investors to purchase shares of multiple properties. The main advantage of this investment type is that investors can lower their risk by diversifying the returns from multiple types of real estate. Funds-based platforms usually charge higher fees from investors, since access to several properties presupposes more administration and management work.

  • Real estate investment trusts (REIT)

REIT is a business that invests and owns a certain property to eventually gain profit. Investors can purchase shares of the REIT and when the REIT gets income from real estate, investors get their percentage.

Now that you know the difference between equity-based and debt-based platforms, it’s time to shed some light on what niche you can choose to enter with your crowdfunding platform .

What crowdfunding niche to enter?

When planning a crowdfunding platform , it’s important to decide on the types of real estate you’ll concentrate on. Focusing on a single niche will mean that you’ll face less direct competition, which enables you to become a big fish in a small pond. You can also excel more easily with special knowledge or skill set in a specific industry, making the platform the best it can be for target users. 

There are two major niches in the real estate crowdfunding market : commercial and residential real estate. The Covid pandemic has brought many long-lasting trends to both niches. Let’s discuss what has changed in commercial and residential real estate after Covid-19 to help you make a more informed decision.

Commercial residential real estate

  • Commercial real estate 

Commercial properties refer to real estate used for business purposes only. They include but are not limited to hotels, office buildings, shopping centers, medical buildings, and similar .

Investing in commercial real estate can bring expected returns, but only if investors have a clear understanding of today’s market demand. In the past, commercial properties tended to generate larger incomes compared to residential real estate, as renters were usually always available. With the spread of coronavirus, the commercial real estate market has been hit hard, as many businesses were forced to adopt the work from home policy. 

To make investments in commercial properties more promising, yet less risky, it’s recommended to focus more on assets that remain in high demand now, like healthcare facilities, pharmacies, data and logistics centers, and such.

  • Residential real estate 

Residential properties refer to living spaces rather than workplaces. Condos, apartments, and houses make a good example of residential real estate.

Today, many investors consider residential real estate less risky. The current pandemic has made more people interested in buying a home, thereby making the residential real estate market boom in the last couple of years. Bigger houses are now in a particularly strong demand. People need more space in their homes to be able to work without being distracted by other family members. Another good investment opportunity in 2023 is to finance properties located in the suburbs. The Square Yards report suggests that 56% of homebuyers want to move out of cities to support their health and wellness during the pandemic. 

Tips for dominating in your niche market

Once you define the niche, you may start thinking about ways to beat your competition. Let’s wrap up the key strategies that will help you gain a competitive advantage:

Get to know your target audience  

Think about your users’ income level, place of living, age, occupation, common problems, and similar. Understanding who your potential investors are and their pain points will help you come up with a solution to satisfy their needs.

As an example, Concreit has managed to build a platform that resonates with ‘‘regular’’ people who want to become more financially stable. Instead of trying to appeal to everyone, the platform focuses on small investors who want to have passive income without the burden of managing one’s own rental properties. Concreit’s target audience is interested in single-family rental homes, but have neither enough cash to buy their own real estate nor the time to make repairs at 1 a.m. on Sunday. 

Concreit investment

Concreit investment platform 

Analyze competition  

The next thing you need to do is to define the major players in the sector. According to Investopedia , the crowdfunding giants in today’s market are Fundrise, Crowdstreet, DiversyFund, EquityMultiple, PeerStreet, and RealtyMogul. 

Pay close attention to competitors’ offerings that have become attractive in the eyes of investors. As an example, market leaders mentioned above allow users to benefit from easy-to-find investment information, a large selection of property listings, institutional quality offerings, and so on. Learning what features investors have and like will help you build a product that meets current market standards. 

  • Think about offerings that investors lack

To stand out from your competitors, you need to make offerings that investors would like to have, but have a hard time finding on the market. For instance, few platforms to date have mobile applications and early withdrawal options for investors. 

Coming back to Concreit, this crowdfunding startup has managed to capitalize on closing the gap in the offerings. The company focuses mainly on mobile app users, allowing them to easily finance a project with the swipe of a finger on their smartphones. On top of that, investors can withdraw their capital through the mobile app any time convenient for them. It’s no wonder that the startup received $6M in funding last year.

Unique features to add to a crowdfunding platform

After choosing the niche and learning how to compete in the market, it’s time to build the product that will be relevant in a dynamic crowdfunding sector. We’ve picked out three advanced features that your platform should have to ensure a superior user experience and give you a competitive edge.

  • Fully automated investments

Auto-investment is the crowdfunding platform feature that allows users to automatically take part in deals that meet their own pre-selected criteria. Investors are no longer requested to log into their investment accounts and manually make their contributions. As long as users have money available in their bank account, they won’t need to compete for newly opened real estate projects — the tool will automatically make investments for them. This functionality assists users in building a diversified portfolio, while taking advantage of new investment opportunities.

real estate crowdfunding business plan

Crowd Estate automated investments feature

  • Payment gateway supporting different currencies

Accepting payments in different currencies will increase the number of investors willing to make their contributions. In the last year, global real estate investments have exceeded pre-pandemic levels by 77% , while Europe has witnessed an 80% increase in property investments. Given this tendency, building a crowdfunding software that supports multiple currencies will give you a significant competitive advantage over other well-established platforms that do not have such a feature. Some common currencies to include are euros, yuan, rupees, yen, Canadian dollars, Australian dollars, and Singapore dollars. 

Crowdfunding platform payment gateway

Payment gateway that supports Bulgarian currency

  • Chatbot feature

A chatbot refers to the virtual assistant driven by artificial intelligence that investors can interact with on a crowdfunding platform through a chat interface. Not all users are seasoned investors and may not know where to go and find answers to their questions. Moreover, some may not even know what investments they’re interested in.

As you can see in the picture below, the future of the chatbot market seems optimistic with the projected increase up to an overwhelming $1.25B in 2025. Few real estate crowdfunding platforms currently offer chatbots to assist users to make more informed investment decisions. Adding this feature will help your platform stay up-to-date in the years to come.

Global chatbot market

The expected increase in the size of the global chatbot market in 2025

  • Why build a crowdfunding platform with JatApp?

Almost a decade ago, it would have been hard to believe that someone could raise millions of dollars from many unfamiliar investors in a few minutes. In 2023, however, it happens daily through real estate crowdfunding platforms . The future of this sector seems very bright, as it continues to evolve in the face of Covid-related challenges. 

If you want to develop real estate crowdfunding software , you’ll need a trustworthy vendor to build a competitive product that appeals to investors. JatApp can become your trusted partner in developing your crowdfunding platform. Our company is included in the world’s top 1,000 B2B software vendors according to Clutch with more than 200 completed projects and a 99% satisfaction rate. With us, you can save up to 60% on development costs compared to other vendors in Western markets. Don’t hesitate to contact us and we’ll contact you shortly to discuss project details.

real estate crowdfunding business plan

  • Get to know your target audience 
  • Analyze competition 

What is a real estate crowdfunding platform?

A web-based real estate crowdfunding platform enables investors to pool their funds and invest in real estate projects. Compared to traditional real estate investments, these platforms offer higher accessibility and lower entry costs.

What is the cost of starting a crowdfunding platform?

The cost of launching a crowdfunding platform can fluctuate significantly depending on various factors, such as the platform's type, size, scope, and required technology and features. Generally, creating a crowdfunding website can cost between $60,000 to $230,000, which depends on development factors like the complexity of the business model and features and the expertise of the development team.

What are the tech requirements for developing a real estate crowdfunding platform?

Developing a real estate crowdfunding platform necessitates designing and constructing a website with features like payment processing, user registration and verification, and investor management tools. Other crucial technical considerations involve ensuring the platform's scalability, security, and compliance with data privacy regulations.

Related Posts

Unexpected Costs in Software Development Outsourcing

Have you ever found yourself spending more than you planned only because you tried to save money? Indeed,…

What Is Technical Documentation in Software Development

Let’s imagine that an experienced developer joins a new company. The developer feels enthusiastic about a new job…

non-functional requirements

Anyone who’s ever experienced the fun of passing the military training knows how to properly make a bed.…

We will get in touch with you shortly

Gower-Crowd-Logo-Colour 1

FREE TRAINING

What is Real Estate Crowdfunding?

Learn how to build wealth and earn passive income in real estate while someone else does all the work.

Guide to Real Estate Syndication and Best Platforms

June, 2021, Note:   In my new book, UNLEASHED , which updates the research in this article, we reveal that CrowdStreet is the largest private equity real estate platform in the industry.  Check out these stats:

  • Total equity raised: $2 billion +
  • Total Project Capitalization: $20 billion +
  • Investor Distributions: $200 million +

Our research shows that while the real estate syndication industry is growing at a tremendous clip, increasing from $7 billion to $15 billion in size during 2020 alone spurred by the accelerated move to online commerce by the pandemic, CrowdStreet appears to be growing faster than the industry overall, leading the growth trend.

This article is being updated and a revised version will be published shortly, but to learn more about our latest research please see a detailed analysis in UNLEASHED, here.

Investing in commercial real estate has become a popular way for investors to diversify their portfolios , particularly given the low correlation between commercial real estate performance and the broader stock and bond markets. While commercial real estate investing is far from foolproof, it does provide some insulation against the ebbs and flows of the general market. It takes much longer for commercial real estate pricing to adjust than it does other securities, such as stocks and bonds.

Yet investing in commercial real estate isn’t so easy, particularly for those who are not well-capitalized or who lack industry connections.

This is the inherent appeal of commercial real estate crowdfunding : those with limited resources can now invest nominal sums to co-invest in institutional-quality commercial real estate alongside many other investors. Read on to learn more about real estate crowdfunding , including the best platforms serving the marketplace today.

Stakeholders in Crowdfunding

How real estate crowdfunding works, why crowdfunding for real estate investing, factors for choosing a real estate crowdfunding opportunity.

  • Review of Reviews: Best Platforms for Crowdfunding

Requirements for Investors

How crowdfunding can affect taxes, is crowdfunding right for you.

Related: Podcasts on learning about real estate investing

One popular misconception is that real estate crowdfunding is a 'new' industry niche. while the term may be new, the practice first emerged over 150 years ago.

Crowdfunding is a concept that most people have become familiar with in recent years. In short, it is when someone solicits monetary contributions to fund a cause. You’ve probably seen innovative businesses pitch their ideas or business plans through KickStarter, or community members seeking donations for a charitable cause on GoFundMe. This is the basis of crowdfunding, which really sprung up as a result of the 2012 JOBS Act, which established ground rules for online crowdfunding.

Real estate crowdfunding is similar, except that the sponsor is not seeking donations. Instead, the sponsor is looking for investors to contribute capital toward debt , equity or some combination of both. These deals are usually featured on platforms like CrowdStreet, RealtyMogul, RealCrowd, Fundrise and others which we’ll discuss in more detail below.

One popular misconception is that real estate crowdfunding is a “new” industry niche. While the term may be new, the practice is as old as time. The nature of commercial real estate financing , which often requires millions of dollars in debt and equity, has always required the aggregation of capital from multiple sources to finance deals. Most sponsors would line up traditional debt financing for 60-80% of their total project costs, and then seek equity investments from a host of limited partners.

The only thing that is “new” about pooling capital for commercial real estate deals is that the 2012 JOBS Act allowed sponsors to market to prospective investors in new ways. Prior to 2012, real estate sponsors were barred from general solicitation which meant, effectively, that they could not advertise or use social media to promote their companies or deals. Today, real estate deals can be crowdfunded with almost no restrictions of any kind. That means real estate developers can market their deals to people all over the world, using any form of media, without having a pre-existing relationship with those who choose to invest – another restriction of the pre-2012 JOBS Act era. This has democratized the commercial real estate industry , allowing both accredited and non-accredited investors to invest in deals they would never have had access to before.

Check out the ultimate guide to crowdfunding real estate and learn from the experts.

A FREE FOUR-DAY COURSE

The 8 Financial Keys to Real Estate Investing

There are generally three stakeholder buckets involved in real estate crowdfunding: sponsors, the crowdfunding platform itself, and individual investors .

Real estate crowdfunding would not be possible without sponsors being willing to raise capital in this manner. The project sponsor is the person, or team of people, behind the real estate deal . The sponsor is responsible for all day-to-day activities relating to the deal, from acquisition to financing , from redevelopment, lease up, stabilization and eventually refinance or disposition. The sponsor will provide all offering materials for prospective investors to consider, including the initial underwriting and deal terms.

When evaluating an investment opportunity , investors will want to carefully vet the sponsor’s qualifications. Consider the sponsor’s experience, particularly with the product type and in the geography of the proposed deal. Look at how the sponsor has executed deals in both bear and bull markets. Challenge the underwriting assumptions and be sure the sponsor has accounted for all costs and potential liabilities. An otherwise exciting deal can quickly unravel with an unqualified sponsor at the helm.

Related : 3 Risks to Watch for in a Real Estate Recap

Crowdfunding Platform

Even though crowdfunding has only been available online for less than a decade, we’ve already seen platforms begin to evolve . The initial wave of real estate crowdfunding platforms served as middlemen. They were essentially a technological solution for connecting sponsors and prospective investors, nothing more.

Today, crowdfunding platforms have become more nuanced in many ways. Some only feature certain types of deals (e.g., debt vs. equity). Others offer opportunities to invest via different vehicles (e.g., in eREITs or funds vs. direct investment into a specific deal).

Increasingly, there are platforms that are hosted by the sponsor directly – not a third party. The sponsor will establish their own platform for real estate crowdfunding. This takes out the middleman and allows the sponsor to connect directly with their investors, providing the resources and technology to allow people to invest with them directly.

Investors are the third and equally important group of crowdfunding stakeholders . The 2012 JOBS Act allowed accredited and non-accredited investors to participate in real estate crowdfunding. It took some time for the regulations under the Act to be promulgated and it was not until 2015 that the SEC finally opened real estate crowdfunding to non-accredited investors through both Regulation CF (which stands for Crowd Funding) and Regulation A+ (known colloquially as a ‘mini-IPO’) to come into use. Today, nearly anyone can invest in real estate crowdfunding , sometimes with as little as $10. At the opposite end of the spectrum, we’re starting to see institutional investors invest in crowdfunded deals as well.

Each platform can set its own requirements re: whether they want to accept accredited vs. non-accredited investors, so individuals will want to consider these requirements before spending too much time evaluating deals that they may ultimately not be eligible to invest in.

Related : A Primer on How to Utilize Opportunity Zones

Adam: Where do you think this is headed? In 10 years' time or ultimately, what do you think this industry is going to look like?

Mark: Well, I analogize it to all these other industries that the internet has penetrated and disrupted. It will continue to expand, as more and more investors become aware of it; as more and more sponsors become aware of it. In my $14 million deal, there were something like 280 investors, which is great. I believe that the sites, like CrowdStreet, RealCrowd - the big successful sites - I think they might have a couple hundred thousand accredited investors signed up. There's like 8 million accredited investors-

Adam: Exactly, though, right?

Mark: -in this country. We are talking about they are scratching the surface. As sponsors become aware of raising $14 million, more and more people are going to come into the industry, which will be great. I think, within a short period of time, just as ... When we're going to make a travel plan, now, if I'm going to go out to visit my sister in California, I'm going online. I mean, it doesn't occur twice.

I think, in the real-estate field, particularly, it's not going to be long before a sponsor thinks first about going online to raise capital just as a natural move. I'm hopeful that it moves from the accredited-investor-only world into the Reg-A non-accredited-investor world.

As you've noted, the Reg-A world, so far, has been much less successful than I think many of us thought that it would. The Reg-D world, accredited investors only, is so much more successful, so, I think that's going to happen.

Now, with that said, what the internet does is drives out inefficiencies in markets. I said that it displaces middlemen. That's a different way of saying the same thing. It drives out inefficiencies. At some deal size - I don't know what it is; exactly what it is ... The world of $100,000 deals is extremely inefficient. The world of $14 million deals is still inefficient. Crowdfunding can grow beyond there.

The world of, let's say, a billion-dollar real-estate deal, that is an efficient world. It's already efficient. Everyone knows who all the players are. Everyone has access to information. There are experts out there. That's an efficient market already.

Crowdfunding, I think, doesn't have a role to play in that market. I don't know where the line is. We haven't reached it yet, and given that we've only penetrated less than 10 percent, even of the accredited-investor market, we have a long way to go. There does become some point where crowdfunding is not adding any efficiencies to the markets, which is fine. All all of us want is efficient markets. If it's crowdfunding, great; and if it's not, great.

Adam: It'll reach its maximum potential, basically.

Mark: It will, yeah.

At a most basic level , real estate crowdfunding works by aggregating capital from multiple investors and then deploying that capital into a specific real estate project or fund. In practice, each real estate crowdfunding platform and sponsor operates a bit different.

For example, some platforms function like marketplaces (e.g., CrowdStreet or RealtyMogul) that connect sponsors and investors. Think of what the MLS (multiple listing service) is for residential real estate, or what Costar is for commercial real estate and you can think of the crowdfunding platforms as being their marketplace cousins. The primary difference is that unlike the MLS or Costar that function to allow the listing and sale of whole buildings, the real estate crowdfunding marketplaces allow for the listing and sale of small shares in whole buildings.

This is why crowdfunding marketplaces are governed by securities laws under the Securities and Exchange Commission (the SEC) – they are not selling whole building they are selling shares in companies that own buildings i.e. they are marketplaces where ‘securities’ are traded (technically) and not buildings.

Some platforms actually co-invest in the deals featured on their websites, even as a third-party facilitator. Increasingly, some sponsors host and manage their own online marketing efforts, presenting only their own deals independently to prospective investors, and in contrast with marketplaces that offer multiple deals at the same time from multiple sponsors.

Most platforms are designed to raise capital for one of three purposes: to raise debt, to raise equity , or to raise some combination of both.

Debt Platforms: Several websites have emerged that help raise debt for real estate projects. Patch of Land is one such example.

Investors contribute to an offering, and once funds are raised, the money is used to make loans on commercial real estate deals. The structure of these deals can vary, but they tend to be short-term construction or mezzanine loans that promise yields as high as 10% to 18%. Returns are high given the inherent risk associated with some of these deals, along with the fact that these loans are not always secured by the asset itself.

Equity Platforms: Equity platforms are perhaps the most successful segment to date of real estate crowdfunding , with companies offering investors a slice of real estate in many different forms. Here you find the crowdfunding marketplaces like Crowdstreet, RealtyMogul, RealCrowd and others listing and allowing the sale of shares in the individual deals of many sponsors.

There are some sponsors, like ArborCrowd, Origin Investments, KBSDirect, JamestownInvest, Feldman Equities, Trion Properties etc., who raise equity directly from investors for their own deals and who, in some cases also list on the marketplaces to further expand their reach to the investor community.

Some equity platforms, like Fundrise for example, raise money for a fund, and then the fund invests in a specific asset or portfolio of assets. Depending on how they are structured, these offerings are sometimes referred to as “eREITs”.

Debt and Equity Platforms: A third type of crowdfunding platform is one like CrowdStreet, which offers opportunities to invest in debt or equity, through a fund or by investing in a specific deal.

Are you interested in learning from a successful expert? Then check out Adam Gower , and allow him to teach you.

Larry: Well, one of the things we specialize in, and our main focus, is in high-rise buildings in downtown environments. I'm sitting, right now, in the Wells Fargo Center building in downtown Tampa. This is a building that we are currently in joint-venture ownership with New York Life Insurance.

When people see a big high-rise building like this, including some very sophisticated people in our business, they automatically assume that I'm in ownership with somebody like New York Life Insurance. Historically, insurance companies were some of the most prevalent owners. In fact, if you went into virtually any downtown 20 years ago, you could just walk down a street, and it would be likely that you would run across a building that was owned, at least in part, if not wholly, by an insurance company.

The reason that they like high-rise buildings in downtowns is that they're steady-Eddie - what we call - coupon-clippers; meaning the cash flow is very steady and very safe. So, when they sell life-insurance premiums to a 30-year-old recently married couple with maybe 1.2 kids, they are hoping that that person lives to 104, so they don't have to pay the insurance premium.

All during that period, they own these office buildings, and they keep throwing off dividends. So, by the time that person dies, they have not only enough money to pay the premium, but they've also got a lot of money left over, which they call profit. That's the history and the reason why you see these big giant institutions owning these high-rise buildings.

The average investor, or even somebody that has a half a million, or $100,000 to invest would just walk by one of these office buildings and just say, "Oh, well that's just way out of my league. I wouldn't even look at something like that." Now, all of a sudden, we have democratized the business through crowdfunding, and it really opens up a whole new world.

Although online crowdfunding for real estate investing is still a relatively new concept, it is growing in popularity (among all stakeholders – sponsors and investors alike) for good reason. Below are some of the benefits to investing in real estate crowdfunding .

One of the primary benefits to real estate crowdfunding is that it allows a sponsor to reach a broader audience. Rather than pitching to one or two prospective investors at a time, often in person through boardroom-like presentations or over lunch, a sponsor can now pitch their deal to investors from all over the world. Similarly, investors benefit from having greater access to commercial real estate opportunities that would historically have been reserved for only those “in the know.”

Short Time Frame

When a lucrative opportunity arises, a sponsor often needs to move quickly. Real estate crowdfunding is one way to do that. By creating a fund, the sponsor can aggregate capital based on certain investment criteria. With that cash on hand, the sponsor can act quickly and decisively.  (Keep in mind, however, that as attractive as it may be to have a fund into which you can dip as a developer to purchase assets at a moment’s notice, raising money for a fund is a lot harder than raising money for individual deals).

Sponsors who have a deal in mind already – let’s say, they have a letter of intent signed for a land development deal – can use online crowdfunding to reach more investors and line up capital in less time than they’d be able to if pitching to individual investors in person. The most famous capital raise to date has been Origin Investment’s successful raise of $110 million in just 17 hours in late 2018.

From an investor’s perspective , crowdfunding also offers the benefit of investing in deals that have a relatively short (1-3 year) time horizon. For example, while many commercial real estate syndications require a long time to complete – 5 years or more – some offer much shorter time frames. For example, where sponsors are looking for investors for a construction loan, these may be repaid in 12-18 months at a double-digit interest rate. This is a much shorter time horizon than an investor would expect if buying a commercial real estate deal independently.

Potential for Higher Returns

In order to appeal to the masses, sponsors generally have to project at least double-digit returns for prospective investors. It is not uncommon for crowdfunded deals to forecast annualized returns of 15% or more. (Keep in mind, however, that the higher the returns the higher the risk). The structure of the deal will influence actual returns. For example, mezzanine debt may be a few basis points lower than the returns expected when investing in common equity shares given the structure of a real estate waterfall. Of course, investors will always want to do their own due diligence on a deal, fact-checking the sponsor’s underwriting assumptions. It is important to keep in mind that any projected returns are forward-looking statements that can never be guaranteed.

Portfolio Diversification

There’s certainly something exciting about owning a piece of commercial real estate, but direct ownership is a lot of work. Real estate crowdfunding allows someone to passively invest in a single property without taking on the day-to-day management—duties which are instead left to the sponsor. This is a great option for those who want to learn the ins and outs of a specific market and singular property as a foray into commercial real estate investing. Learn  more about crowdfunding and if you are wondering if it is legal .

Focusing on a Single Property Without Having to be a Landlord

Individual investors can use real estate crowdfunding to diversify their portfolios . Those who have already invested in real estate, perhaps in smaller deals as an active investor, may look to crowdfunding to diversify their holdings into larger projects of different product types or in different geographies. Those who have never invested in real estate (except maybe their own personal residence) may look to real estate crowdfunding as a way to passively invest in commercial property as a means of diversifying their portfolio of otherwise traditional holdings like stocks and bonds. Learn more about portfolio diversification .

Related : Learn from leaders of the real estate world

most crowdfunding platforms are designed to raise capital for one of three purposes, debt, equity, or both.

With so many real estate crowdfunding platforms and sponsors to choose from, most of which are structured slightly differently, it can be daunting for an investor to hone in on their first crowdfunded investment. Here are several factors to consider when choosing a real estate crowdfunding opportunity.

Investors will always want to consider their own risk profile. Those who are risk-adverse may look to invest in an eREIT or other fund that deploys capital across several investment opportunities , thereby not putting all their eggs in one basket. Similarly, they will want to consider the product type they’re investing in. Multifamily and office, for example, tend to be less risky than retail or hotels. Some geographical markets are “safer” than others, too. An investor will want to align their risk profile with the nature of the deals they are considering.

Related : Sponsor Fees and the Motivating Factor in Real Estate Investing

Investment Type

As noted above, there are many investment types to consider. Not all platforms, sponsors, or funds invest in the same types of deals. A particular fund, for example, may only invest in value-add apartment buildings in the Southeast. If you are looking to invest in a particular product type, using a particular investment vehicle, you’ll want to identify a platform or sponsor that specializes in those deals.

To present this in a slightly different perspective, it's the same as saying that somebody is looking in the market to earn 5% on their money, and the sponsor is offering $1.4 million. This means that they are going to be prepared to pay $28 million in order to buy that income stream of $1.4 million. So the sponsor’s cost, in this case, is $20 million. The buyer is willing to buy the net operating income stream for $28 million, so the deals are good. This is a quick way for sponsors to screen deals.

Sponsor Experience

The sponsor’s experience is perhaps the most critical factor to consider when choosing a real estate crowdfunding opportunity. Do not allow sleek marketing materials to persuade you to invest; this just means the sponsor has a good marketing team . Peel back the layers to dig into the sponsor’s experience. What experience do they have with this product type? What were their projected vs. actual returns on previous projects? Who else is on their team, and how experienced are those people? Has the sponsor weathered multiple real estate cycles? How have their deals performed during downturns? What does the sponsor perceive as the biggest project risks? The answer to these questions should guide your decision-making when evaluating various opportunities.

Different platforms, and different deals on each of those platforms, usually have a different fee structure. Consider doing a side-by-side evaluation of individual deals to learn more about the fee structures. Steer clear of any deal that has an exorbitantly high fee structure, as this will quickly eat into investors’ returns and suggests that the sponsor is motivated by fees and not by results – a misalignment of interests with their investors. At a minimum, you should account for all fees and understand how those fees are being used and be sure that they are market rate and do not serve as a motivator for the sponsor.

Target Return

A deal’s target return will depend on many factors, including the type of deal (e.g., debt vs. equity), holding period, property type, and more. An individual will want to consider a deal’s target returns relative to other investment opportunities —including other real estate crowdfunding opportunities, but also other investment types, such as stocks, bonds or private equity for non-commercial real estate transactions. Crowdfunded deals , on average, tend to be relatively high-risk, high-reward investments, so it is important that an investor is getting a return that aligns with the corresponding risk profile.

Target Holding Period

Investors will want to consider a deal’s target holding period, as this will determine when the investor can expect to be repaid, plus any interest or dividends. Most crowdfunding deals seeking equity will have a target holding period of between three and ten years, though it can certainly be more or less. The holding period for debt is often shorter, ranging from one to five years, give or take. The holding period will depend on the sponsor’s exit strategy, which is why it is important to understand the sponsor’s business plan. An investor with a short-time horizon will want to identify opportunities with shorter holding periods vs. vice versa. Note: most deals have an estimated holding period, but that period may vary depending on market conditions. In an overheated market, for example, the sponsor may see an opportunity to sell sooner than they anticipated as a means of generating higher returns for investors.

Income or No Income

When investing in crowdfunded real estate , investors can expect to be repaid their initial investment plus interest, dividends, share appreciation or some combination thereof. Most deals seek to produce some level of ongoing income stream for their investors, though it may take years before paying out that income via cash flow distributions. It depends on the sponsor’s business plan, amount of construction needed, how long it takes to stabilize the property, and so on.

Another way to earn money through real estate crowdfunding is via a profitable exit. This is when the sponsor refinances or sells a property and returns a share of the proceeds to the investors. Some deals have both interest and/or dividends as well as payouts as a result of a profitable exit.

The benefits and profitable gains of crowdfunding are numerous and what a great way to enhance and diversify your financial portfolio .

Related : Should You Invest in a Class C Property?

Best Platforms for Crowdfunding

Real Estate Crowdfunding Review of Reviews:

Several crowdfunding platforms have emerged as industry leaders to fill demand among sponsors looking to raise both debt and equity for their projects

To identify the best of the best platforms, we have conducted exhaustive analysis, not directly of the sites themselves, but of the all the reviews we could find online - a Review of the Reviews.

This is the most comprehensive overview of the top platforms in the real estate crowdfunding world because it consolidates all the available information online and so offers the only crowdsourced overview available of the top real estate crowdfunding platforms.

Below is a list of the top ten sites based on our analysis, as well the results of our research.  Please note that this research was conducted prior to Covid and so we expect to update the results in due course.

Gower-Overall

RealtyMogul

RealtyMogul was one of the first real estate crowdfunding platforms to emerge and has developed a well-established track record. Today, the platform has more than 185,000 registered members and it has raised more than $400 million for commercial real estate deals . RealtyMogul offers opportunities to invest in equity for both private real estate deals as well as real estate investment trusts (REITs) . The minimum investment is $5,000 .

Fundrise allows people to invest in either eREITs or eFunds, both of which are proprietary (private) investment opportunities unique to Fundrise. The platform allows individuals to invest in commercial real estate deals with as little as $500 initially, with $100 follow-on investments thereafter. Investors select their investment objective, such as long-term growth or balanced diversification, and then are given different options (or funds) to invest in. Funds are then invested in different product types, such as apartments, hotels, shopping centers and office buildings across the country.

One drawback to the Fundrise model, though, is that investors rarely know more than the fund’s investment parameters (e.g., investment strategy, geography and product type); they do not necessarily know how capital will be deployed into specific assets.

CrowdStreet

Crowdstreet is a peer-to-peer marketplace that brings together real estate sponsors and investors interested in buying and selling shares in real estate projects. The platform tends to appeal to more established and sophisticated investors, and as such, has a minimum investment threshold of $10,000 – one of the steepest minimum investments of the crowdfunding platforms featured here today. CrowdStreet provides opportunities to invest in debt , equity and preferred equity alike. CrowdStreet also touts its rigorous selection process, resulting in only 2% of submitted deals making it onto the platform.

STOP PRESS: Latest research shows CrowdStreet to be by far the largest real estate crowdfunding platform.

EquityMultiple

EquityMultiple is a crowdfunding platform that targets professionally-managed commercial real estate . Investments can be made in common equity, preferred equity , and syndicated debt investments. The platform is increasingly featuring qualified opportunity zone investments, as well. Of note, however, is that EquityMultiple is only open to accredited investors. Projects have a minimum $5,000 initial investment, though specific projects require an initial investment of $10,000 or more. The platform allows for investments to be made via a self-directed IRA, but for those investing in this manner, they must be willing to invest $20,000 minimum.

PeerStreet is an online marketplace that allows individuals to invest in real estate debt. It is one of the nation’s first, and perhaps largest, “two-sided” platforms. In other words, PeerStreet acts as a facilitator between borrowers and lenders. When you invest, you are not investing in deals that PeerStreet is sponsoring, but rather, with third party lenders who a re utilizing the PeerStreet platform to sell the loans that they have extended to borrowers. PeerStreet vets all deals before they’re eligible to be featured on its site. Therefore, investors will have transparent information about loan terms, projected returns, yields, LTV ratios and more.

PeerStreet allows investors to participate in loans with flexible terms that provide fixed-income returns. Loans are generally short-term, ranging from 1 to 36 months. The deals are structured so that the loans are in the first-lien position, ensuring investors are first to be repaid with interest payments transferred into the investor's account each month.

At this time, the platform only features residential and multifamily properties. The minimum investment amount is only $1,000 and the platform is only open to accredited investors. One particularly unique feature is that investors can set their preferred investment criteria, and then PeerStreet will automatically allocate uninvested capital into loans that match those preferences, with the ability to “opt-out” of those deals within 24 hours of the investment going live.

PeerStreet first launched in 2014 and has since helped fund more than 8,800 loans totaling more than $4 billion in value.

Real estate crowdfunded platforms most recognized in the USA

GROUNDFLOOR

GROUNDFLOOR is an online marketplace that sources real estate debt for short-term (generally 12-18 month) loans. It is one of the first companies to be qualified by the SEC to offer real estate debt investments via Regulation A+ for non-accredited investors. What’s more, people can invest with as little as $10 and can now invest directly through their IRA accounts.

Unlike PeerStreet, GROUNDFLOOR acts as the direct lender. Borrowers can come to GROUNDFLOOR in search of capital for 1-4 unit properties located in one of 10 states (AL, AZ, FL, GA, NC, NV, SC, TX, UT and VA). Most projects are fix-and-flip in nature. The platform touts its lucrative returns, averaging 10% or more for investors, with most investors repaid within 6 to 9 months. The platform has more than 75,000 registered users who have collectively invested more than $250 million in 600+ GROUNDFLOOR-listed investments.

Patch of Land

Patch of Land is a debt crowdfunding platform. Investors contribute to an offering, and once funds are raised, the money is used to make loans on commercial real estate deals. The structure of these deals can vary, but they tend to be short-term construction and mezzanine loans that promise yields as high as 10% to 18%. Returns are high given the inherent risk associated with some of these deals, as “safer” projects would typically just utilize lower-cost bank financing.

RealCrowd is a crowdfunding platform for accredited investors seeking to invest in commercial real estate assets and funds. RealCrowd acts as the middleman between sponsors and investors. It earns its revenue based on the fees charged to the sponsors (investors pay no fees).

The number of deals on RealCrowd tends to be less than some of the other platforms, but the deals featured on RealCrowd tend to be very high caliber. The company does a rigorous vetting of sponsors in advance, requiring a minimum 10 years of principal operating experience and $50 million of verified transaction experience. In turn, investors are expected to invest a minimum of $25,000 in any deal. People invest directly with the deal sponsor, not with RealCrowd, which instead serves as the facilitator of the transaction.

Rich Uncles

Rich Uncles is one of the more unique crowdfunding platforms. It allows people to buy shares in one of two public, non-traded REITs: its Rich Uncles National REIT, a single-tenant commercial property REIT (which tend to be office, industrial and occasionally retail properties), or its Rich Uncles Student Housing REIT. Rich Uncles purchases the properties with at least a 50% cash down payment. Those who own shares of the REIT will then earn dividends as the company collects and distributes the properties’ rent payments.

Investing with Rich Uncles is particularly attractive to those looking to preserve liquidity. The company offers a share redemption program that gives investors the option of selling their shares back to Rich Uncles. Otherwise, the investment into a Rich Uncles REIT fund is generally a 4- to 7-year commitment, at which time a fund liquidation event takes place and investment proceeds are distributed. Investors should know, however, that Rich Uncles is an open-ended fund, with no pre-set liquidation date. Therefore, Rich Uncles has the sole discretion of when to liquidate its portfolio.  

The Rich Uncles BRIX REIT, one focused on student-housing properties, a 24 Hour Fitness, and properties leased by Starbucks, was hit particularly hard by the COVID-19 crisis and as of May 2020 , was facing insolvency. If this were to happen, investors in this fund could be entirely wiped out.

RoofStock is an online marketplace for buyers and sellers of single-family rental properties. The platform provides deals of all kinds, ranging from whole or fractional ownership shares of single properties or fully managed single-family rental portfolios. The diversity of offerings allows investors to build and scale their SFR portfolios. One key feature of RoofStock-listed properties is that they’re all in turn-key condition and either already leased or ready to be rented upon close, within 30 days according to RoofStock’s unique industry guarantee.

Buying SFR investment property on RoofStock is easy. Investors start by getting pre-approved by their own lender. Then, they can browse RoofStock offerings that fall within their budget. Investors will then make an offer to purchase a property, with the sellers having 48 hours to accept, decline or counter-offer. Investors can also “buy it now” if looking to purchase a property for its advertised asking price. RoofStock helps facilitate the deal from end-to-end, including property inspections and all deal paperwork through to closing.

RoofStock is a wildly popular platform, in part because it is open to accredited and non-accredited investors alike. In less than four years, the platform has facilitated more than $2 billion transactions.

The most recognized real estate crowdfunded platforms in the industry

Related : The Unintended Consequences of Rent Control

As noted above, the 2012 JOBS Act allowed online real estate crowdfunding to occur among accredited, non-accredited , and institutional investors, although it wasn’t until 2016 that the SEC promulgated the regulations that allowed non-accredited investors to participate in real estate crowdfunding, as well. Some marketplaces are open to the general public whereas others are still only open to accredited investors and similarly with sponsors who are marketing their own projects, some include non-accredited investors though the vast majority focus on the accredited investor community.

This is an important distinction to make before analyzing opportunities only to learn that you are not an eligible investor. In order to qualify as an accredited investor, a person must have an annual income of more than $200,000 (or $300,000 in combination with a spouse) over the past two years and a reasonable chance of the same in the current year or a net worth of more than $1 million, excluding the value of their primary residence.

One reason why people opt to invest in commercial real estate is for the substantial tax benefits . Those who cannot own commercial property outright can still take advantage of these benefits via online crowdfunding. Real estate crowdfunding allows investors to benefit from certain tax breaks , such as depreciation, that normally only apply to owning property directly. Investing in deals located in qualified opportunity zones may offer additional tax incentives.

Keep in mind that the tax implications will ultimately depend on the nature and structure of the deal, primarily whether it is a debt or equity transaction and the holding period, as properties held for less than a year may be subject to short-term capital gains tax.

And, as with everything on this website, remember the golden rule when it comes to anything to do with tax or law or investment advice – AAA which stands for Ask An Accountant or Ask An Attorney or Ask An Advisor.

There is no right or wrong answer to this question. Determining whether crowdfunding is right for you depends largely on your individual investment goals, your existing portfolio, your risk profile, and how much capital you have on hand to invest . Those looking to gain exposure to commercial real estate, but who have limited capital to invest, may find that real estate crowdfunding is an excellent way to diversify their portfolios. Individuals are advised to discuss with their financial advisor before making any substantial investment – in real estate crowdfunding or otherwise.

If you do decide that you do want to invest in real estate by crowdfunding, then check out this book Leaders of the Crowd and gain more knowledge about crowdfunding. Also, you can sign up for a newsletter and keep yourself updated. We wish you well in your journey of crowdfunding.

Related: 6 Keys to Crowdfunding Real Estate

FOR REAL ESTATE DEVELOPERS

THE WHITE BOARD WORKSHOP

Learn the exact system best of class sponsors use to raise money online.

RELATED ARTICLES

real estate crowdfunding business plan

Real Estate Investing Explained – Introduction

Last Updated on May 24, 2022 by Dr. Adam Gower FREE TRAINING What is Real Estate Crowdfunding? Learn how to build wealth and earn passive income in real estate while someone else does all the work. Learn More With Support from SmallChange A few years ago Congress passed some laws that allow almost everybody in…

Tall building under construction invoking the idea that distressed real estate can occur anywhere.

How to Buy Distressed Real Estate

Last Updated on December 16, 2023 by Dr. Adam Gower WHITE BOARD WORKSHOP Need More Money to Finance Your Real Estate Projects? Learn how to find more investors, raise more money, and finance your real estate projects online. Sign Up For The Workshop How to Buy Distressed Real Estate Whether you’re a first-time or seasoned…

real estate crowdfunding business plan

Understanding Opportunities for Distressed Real Estate Buys in 2020

Last Updated on June 4, 2023 by Dr. Adam Gower NEW BOOK BY ADAM GOWER PH.D. Real Estate Crowdfunding UNLEASHED How a brand-new way to finance real estate has become mainstream, and what you can do to benefit. Learn More Understanding Opportunities for Distressed Real Estate in 2020 This article is based on my podcast…

Copyright 2018 - ADAM GOWER PH.D. - All Rights Reserved

  • Credit cards
  • View all credit cards
  • Banking guide
  • Loans guide
  • Insurance guide
  • Personal finance
  • View all personal finance
  • Small business
  • Small business guide
  • View all taxes

You’re our first priority. Every time.

NerdWallet, Inc. is an independent publisher and comparison service, not an investment advisor. Its articles, interactive tools and other content are provided to you for free, as self-help tools and for informational purposes only. They are not intended to provide investment advice. NerdWallet does not and cannot guarantee the accuracy or applicability of any information in regard to your individual circumstances. Examples are hypothetical, and we encourage you to seek personalized advice from qualified professionals regarding specific investment issues. Our estimates are based on past market performance, and past performance is not a guarantee of future performance.

We believe everyone should be able to make financial decisions with confidence. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward — and free.

So how do we make money? Our partners compensate us. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. Our partners cannot pay us to guarantee favorable reviews of their products or services. Here is a list of our partners .

4 Best Real Estate Crowdfunding Investment Platforms of April 2024

Chris Davis

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money .

The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

Real estate crowdfunding has transformed the real estate investing landscape. Once reserved for only the most affluent investors, many crowdfunding platforms have significantly lowered the barrier to entry for this type of alternative investment.

Low account minimums, simple fee structures and clean user interfaces make it easier than ever to include real estate in a well-diversified portfolio. It’s important to note that some real estate crowdfunding platforms, including some of our picks below, are open only to accredited investors .

What's the difference between these platforms and REITs?

Real estate investments trusts are companies that own real estate, such as hotels, malls, shopping centers or rental properties. Publicly traded REITs can be purchased through a brokerage just like individual stocks or mutual funds.

Real estate crowdfunding platforms , on the other hand, pool funds together to let average investors participate in the real estate market through private REITs — which aren’t available through traditional brokerages — as well as private market real estate investments, like individual properties. These could potentially provide higher returns than the REITs available through traditional brokerages, but they may also carry higher risk.

Ready to get started? Below are our top picks for the best real estate crowdfunding platforms based on several factors, including account minimums, customer support, redemption options, fees and more.

Best Real Estate Crowdfunding Investment Platforms

Our pick for

Nonaccredited Investors

Yieldstreet

Yieldstreet

on Yieldstreet's website

management fees; other fees apply.

no promotion available at this time

Access to real estate, commercial, legal and art investments.

Ability for individuals to invest in private structured credit deals.

Investments backed by assets, which may provide some protection in event of default.

Highly illiquid investments.

Most investments open only to accredited investors.

Limited offerings available.

Why We Like It

Yieldstreet allows investors to participate in crowdfunding for a wide array of alternative investments, including real estate, commercial, legal and art. The platform is open only to accredited investors.

Accredited Investors

EquityMultiple

EquityMultiple

on EquityMultiple's website

0.5% - 1.5%

other fees apply

Earn a Special 1% Return Boost

on Your First Investment

Access to commercial real estate investments.

Easy-to-use website.

Possible high rates of return.

Liquidity options for certain investments.

Only open to accredited investors.

Complex fee structure that varies by investment.

EquityMultiple blends crowdfunding with a more traditional real estate investing approach that can lead to high returns. Unfortunately, it’s only available to accredited investors.

Want to compare more options? Here are our other top picks:

  • RealtyMogul

Last updated on April 1, 2024

Methodology

How do we review real estate platforms? NerdWallet’s comprehensive review process evaluates and ranks companies that allow U.S. customers to invest in real estate, primarily through non-traded REITs or private equity. Our aim is to provide an independent assessment of providers to help arm you with information to make sound, informed judgements on which ones will best meet your needs. We adhere to strict guidelines for editorial integrity.

We collect data directly from providers through detailed questionnaires, and conduct first-hand testing and observation through provider demonstrations. The questionnaire answers, combined with demonstrations, interviews of personnel at the providers and our specialists’ hands-on research, fuel our proprietary assessment process that scores each provider’s performance across eight factors. The final output produces star ratings from poor (one star) to excellent (five stars).

For more details about the categories considered when rating brokers and our process, read our full methodology .

To recap our selections...

NerdWallet's Best Real Estate Crowdfunding Investment Platforms of April 2024

  • Yieldstreet : Best for Nonaccredited Investors
  • EquityMultiple : Best for Accredited Investors
  • RealtyMogul : Best for Nonaccredited Investors
  • Fundrise : Best for Nonaccredited Investors

Frequently asked questions

Real estate crowdfunding involves pooling investors' money to fund a real estate project or investment. Often this is done by investing in a private REIT, but some of these platforms also give investors access to private real estate development projects. Some crowdfunding platforms let investors gain exposure to real estate for as little as $500.

While buy-in can be relatively low and the risks are in some cases similar to investing in individual stocks, it's important to note that real estate crowdfunding platforms are new to the investment sphere. How these nascent companies hold up during and after severe market downturns is yet to be seen. Keep in mind that no investment is without risk, and investments that aim for higher returns often carry more risk.

Many of the real estate investments offered in these crowdfunding platforms can be illiquid, or take longer to convert into cash, and are likely better suited to investors who can afford to be patient. If you're looking for an investment that you can sell out of in a pinch to generate cash, traditional investment accounts invested in mutual funds, ETFs, stocks and bonds may be a better fit for you.

Through some online real estate investment platforms, investors can start for as little as $500. However, some of these platforms require higher minimums or that investors be accredited.

Accredited investors are allowed to participate in investments not registered with the U.S. Securities and Exchange Commission. The designation is meant to ensure only those investors with the appropriate experience, funds and understanding of risk can take part in certain investments. Accredited investors must have income of more than $200,000 in each of the last two years (or $300,000 together with a spouse), or have a net worth of more than $1 million, excluding a primary residence.

Some of the biggest advantages of REITs include consistently high dividends (making them a popular choice among investors looking for fixed income), historically high returns and often less volatility than other asset classes. However, publicly traded REITs that can be purchased through a traditional brokerage account are generally considered safer than private REITs offered by real estate crowdfunding platforms.

Public REITs are traded on an exchange just like stocks and exchange-traded funds, and are available through most brokerage accounts. Private REITs aren’t listed on public exchanges, nor are they typically registered with the SEC.

With fewer disclosure requirements, it can be very difficult to evaluate the performance of private REITs. Public non-traded REITs — a third category — are registered with the SEC, but aren’t available on an exchange. Learn more about the risks associated with private and public non-traded REITs .

real estate crowdfunding marketing plan

How to Build a Solid Real Estate Crowdfunding Marketing Plan

A real estate crowdfunding marketing plan is the best way to build a larger clientele and grow your business. While word of mouth works for some, it’s not the only way you should market your real estate crowdfunding platform.

Today’s potential investors are online, whether reading emails, surfing social media, or conducting searches in major search engines. If you aren’t marketing to your audience online, you leave your prospective clients to your competitors.

The key is to create a marketing plan for crowdfunding platforms that cater to your audience and showcase you as an industry leader with the best real estate projects.

Why Marketing for Real Estate Crowdfunding Is Important

Digital marketing is the key to reaching your target audience in any industry, including a crowdfunding business. With the onslaught of advanced technology, investors have many opportunities to find the best in the real estate crowdfunding market besides those in their immediate area.

A proper marketing strategy is critical to reaching your target audience, letting them know what you offer, and that you’re a leader in the industry.

The right marketing strategy includes tactics meant to meet your clients where they are, no matter the platform, making raising capital easy.

For example, ranking high on Google is crucial, but you shouldn’t stop there. It’s excellent when investors can find you on Google’s first page, but they usually need more. So, while ranking on Google’s first page will help attract investors, it takes more marketing strategies to convert them to clients and get them interested in the real estate project you offer.

Methods for Crowdfunding Platforms to Market Their Business

Real estate crowdfunding sites have many marketing strategies at their disposal today. Maximizing your real estate development marketing strategies to include as many of these methods as possible may help increase your chances of reaching your target client.

You may include some or all of these marketing activities to increase interest in your crowdfunding business and brand recognition.

Local SEO 

Search engine optimization is one of the first digital marketing strategies for any existing or new business. SEO makes your real estate platform visible to your target market. When done right, you should rank on the first page of Google because you’ve used the proper techniques to help your firm rank higher than competitors in the commercial real estate industry.

But local SEO takes it to another level. It aims your keywords at your local target audience. So, for example, if you’re a crowdfunding business in San Francisco, your marketing strategies would include keywords with the words San Francisco in them.

This method takes your marketing efforts up a notch. It lets you hyperfocus your content on the people most likely to need it. So, for example, if potential clients search ‘real estate crowdfunding platforms in San Francisco,’ you’d want to be one of the top results.

Content Marketing

Consistent content is the key to keeping your target audience engaged. Once you have their attention by getting them to notice you in the search engines, you must show you are the leader in the industry.

Use the opportunity to set yourself apart and give yourself a competitive edge.

Content marketing allows you to market without being aggressive. The right content marketing strategy provides valuable content for your audience. In addition, it offers the chance to prove yourself as a leader in the industry by providing industry insights, helpful tutorials, and information potential clients can use to consider you a viable choice as their crowdfunding platform.

Content marketing can include blog posts, newsletters, emails, social media, and videos. Providing various marketing materials helps increase your reach to your target audience.

Email Marketing

Email marketing helps keep your audience engaged. It doesn’t require them to visit your website or social media page. Instead, you push out emails in strategic intervals, allowing you to provide updates, promotions, or breaking industry news.

The key to email marketing is to have a call-to-action to sign up for the newsletter. This allows your target real estate investor to accept emails from you that may include sales tactics for your products and services.

Email marketing isn’t just about sales, though. It’s another way to show your audience you are an authoritative real estate investment industry figure. When your audience learns they can trust you, choosing to use you for their real estate investing needs becomes natural.

Social Media Marketing

Your business strategy as a crowdfunding business should include social media. It may not seem practical or necessary, but it’s vital to building brand recognition and earning your target audience’s trust.

The key is finding your niche market and determining the social media platforms they use. Next, you should create a social media strategy focusing on this market. There are many platforms to consider, including LinkedIn, Instagram, Facebook, and TikTok.

Typically, audiences on Facebook aren’t on the more modern platforms, like TikTok, and vice versa. So it pays to know where your audience spends time so your marketing for real estate crowdfunding has the most significant return on your investment.

You can interact with your audience much more easily on social platforms, responding to comments, posting relevant content, and answering DMs.

Giving your audience the feeling that you’re a ‘real person’ and care about their needs is key to any real estate crowdfunding marketing plan. Because they’re trusting you with their most prized possession – money, they must be able to trust you first.

Relationship Marketing

Relationship marketing is a critical factor in any crowdfunding platform’s marketing strategy. Developing relationships with key players in the field can help you build brand recognition.

Think about the professionals in your area or online that you should get to know and who you want to trust, such as real estate agents, attorneys, CPAs, and even small business owners.

The more professionals that share your name, the easier it is for clients to trust you. Never stop networking to keep your audience engaged.

PPC Marketing

PPC or pay-per-click marketing (paid advertising) isn’t an organic marketing strategy but can provide a good ROI. PPC marketing is a modern method of cold calling. Interested people will click on the advertisement and follow your call to action. Likewise, your niche market may respond positively if you ask for an email address in exchange for an e-book, newsletter, or other value-added content.

PPC marketing doesn’t have to be intrusive or offensive. When planned right, it targets the right audience, so the people who see the ad are grateful for what’s put in front of them.

real estate crowdfunding marketing plan

Creating a Digital Marketing Plan For Real Estate Crowdfunding

Creating the best digital marketing strategy starts with a plan. Your goal should be to stand out as a leader in the industry, and here are the steps to do it.

Create Your Marketing Goal

You can’t create marketing strategies without goals. So start with one, and work your way up as you see progress.

Your goals should be both short and long-term. Focus on what you want to see of your business today, a year from now, and even five years later, and determine how your marketing efforts fit into the picture.

Make sure each goal is SMART or:

When you set SMART goals, you can see your progress and alter any marketing efforts if they aren’t providing the desired results.

Common examples of marketing goals include:

  • Increase brand awareness
  • Generate interest and leads
  • Narrowing your market
  • Provide personalized digital experiences for your audience
  • Upsell current clients
  • Find new clients

Identify the Target Audience (Niche)

You may have already started discovering your target audience when creating your marketing goals, but getting as specific as possible is the key to creating a successful marketing plan.

To identify your audience, list your potential investors’ financial goals and objectives, which will help narrow your audience. For example:

  • Do you offer an equity stake in your real estate investments?
  • Are you offering investments in early-stage startups?
  • How do you go about raising funds?
  • What income bracket do you cater to with your minimum investment requirement?
  • Can an investor be non-accredited, or must they be an accredited investor?

As you create your audience, you can segment them into groups. This will help when you build content and services tailored to your clients.

Your content marketing should then focus on these goals so it’s of interest to your audience. Whether you’re sending your audience emails, creating blog posts, advertisements, or social media posts, they should focus on the messages your target market wants.

Today’s investor listens to more than just real estate developers’ advice. Instead, they use digital technology to learn as much as they can to be informed investors. If you provide that knowledge and guidance, you’ll be a natural decision for them.

Describe What Makes You Unique

When individual investors search ‘crowdfunding platforms near me,’ they come up with hundreds of options. Unfortunately, they may all look the same, so you need to brand yourself and stand apart from the competition.

Think about the values you provide your clients and use that in your marketing efforts. For example, include client testimonials to further your point and show new investors what you offer.

Consider including your credentials and experience in your marketing, but ensure that your marketing efforts are consistent throughout all platforms. No matter where a client finds you, they should immediately recognize your brand.

While you should look at competitors and see what they do, don’t copy them. Instead, think, ‘What can I do differently to make me stand out?’ That’s what will get the attention. Unfortunately, many platforms copy one another, making each website look identical and not giving their audience any differentiating factors.

You want to be different. Be the one that stands out and shows your audience why you are the crowdfunding platform they need, not anyone else.

Determine Your Budget and Timeline

Any business decision must consider what you can afford. Every dollar you spend on marketing should have a decent return on your investment. In other words, don’t jump head-first into PPC because it sounds like it will make the most money.

Instead, create a marketing plan that fits your budget and allows enough time for you to see results. You won’t see overnight returns, and anyone who promises that isn’t telling the truth. Marketing strategies for crowdfunding platforms take time to show progress.

The best overall marketing strategy includes short and long-term strategies that allow for some ‘quick wins’ and other longer-term efforts to help you today and in the future.

Wisely Choose Content Platforms

Today, crowdfunding platforms have many options for a digital marketing strategy. Don’t assume one is automatically better than the other. Instead, determine where your target market spends their time and focus your time, money, and effort there.

Some common platforms to consider include the following:

  • Social Media Marketing Platforms  – Social media is an option for most crowdfunding platforms. It provides a way to continue connecting with existing clients while targeting prospective ones. The key is to determine which demographic data you’re targeting so you choose the right social media platform to use.
  • Email Marketing Platforms  – Email marketing is a great way to entice cold leads and build relationships with existing clients. When people opt-in to your email list, they want to hear from you. This works for most demographics as long as you provide valuable and informative content, not just to push sales.
  • Send Engaging Newsletters  – Newsletters help keep your audience informed about the latest industry news, changes, hot tips, or new products. It’s a way to provide a broad range of information in one email and to show yourself as an influential leader.
  • Master the Art of Blogging  – Blogging is a crucial content creation strategy. It allows you to continually rank in the search engines by targeting new keywords and focusing your posts on the needs of your target audience. All blog marketing ideas should be published consistently, whether monthly, weekly, twice a week, or some other timeframe.

Execution and Tracking

The final step is to execute your plan! The best-laid plans are those that you put into motion. This is how you’ll determine if your plan works. You’ll grow your client base if the search engines agree and rank your content on the first page.

The key is to have analytics to review so you can tell how your efforts pay off. You won’t know if you’re gaining traction if you don’t have a baseline and then new results to compare.

The key is to constantly check your progress, see how you’re efforts pay off, and make any necessary changes.

Additional Marketing Objectives for Crowdfunding Platforms

Digital crowdfunding marketing is paramount to growing your business, but here are some additional marketing ideas to grow your business even further.

  • Build Relationships with Leads and the Community  – The key to any marketing strategy for crowdfunding investors is to build relationships with your leads and the community. Find unique ways to get involved in your community so your brand becomes a household name. You want your name known even in the mouths of people outside your target niche. The more people who know and talk about you, the more business you’ll get.
  • Become a Local Sponsor for an Event  – By sponsoring Little League players, schools, or other public events, you get your name out there while helping the community. When you support something, you aren’t pushing sales. Instead, you show you’re invested in the community and care about them. Again, this naturally gets your name out there and in the eyes of your target clients.
  • Write a Book  – If you want to create the image that you’re a leader, write a book, and you’ll jump leaps and bounds ahead of your competition. There’s something authoritative about having your name on a book.
  • Your audience will look to you as the expert because of the large amount of information you share with them. They’ll think of you when they need investment platforms.
  • Become a Podcast Guest  – Podcasts are becoming more popular today, and hosts always look for guests. Find a podcast that speaks to your audience and be the ‘expert guest’ sharing bits of knowledge that make your audience think of you when they need investment opportunities. In the podcast, you can provide educational content as well as humor or fun to shake things up and show the ‘human side’ of yourself.

Keys to Successful Crowdfunding Platform Digital Marketing

Market volatility, competition, and the sheer stress of providing a unique value proposition to your audience can seem overwhelming, but here are some simple ways to ensure your marketing for real estate crowdfunding works.

  • Invest in a Quality CRM Application for your Leads  – The back-end work required for any marketing efforts can feel overwhelming and take a lot of time. However, using a quality CRM application can streamline the process, allowing you to automate many processes making the most of your time.
  • Establish Effective Processes and Organization  – Don’t try to reinvent the wheel. Find effective methods, get support from a marketing professional, and organize your time. This ensures you don’t burn the candle at both ends without seeing results.
  • It may require some trial and error to see what marketing efforts work and which don’t. Some may be too time-consuming or not sit well with your audience; others might blow the numbers out of the water.
  • Build Your Sales Funnel  – It’s essential to have a strategy to move your prospective clients through the sales funnel. They’ll start as cold leads, but once they show interest, they are warm leads, and then your job is to turn those leads into clients. It’s a process of relationship building, educating, and selling.
  • Use Google Advertisements  – Google ads may help you get more leads, but it costs money. Make sure you’ve created a workable marketing budget that includes the leads. While most of the strategies discussed here are organic (free), this method requires you to pay for more visibility, but it may help you earn more clients.
  • Make it Easy for People to Book a Call with You  – Prospective clients don’t want to hunt for a way to book a call with you. If it’s not readily apparent how they get in touch with you, ask questions, or book an appointment, they’ll move on to your competition.
  • Make Your Website User-Friendly and Compliant  – Be sure your website is as simple and user-friendly as possible. Also, your website must comply with all crowdfunding regulations. If you’re unsure what this is, working with a marketing consultant is best.

How Do I Track the Performance of My Crowdfunding Marketing Campaigns?

There are many ways to track the performance of your real estate crowdfunding marketing campaigns. At SJ Digital Solutions, we use a variety of analytics to determine how your campaigns perform and share the information with you so you understand the next steps.

How Much Should I Budget for My Real Estate Crowdfunding Marketing Plan?

Every real estate crowdfunding company has a different marketing budget. Since there are many organic ways to get leads, you shouldn’t have to break the bank for your marketing plan. However, you want to budget enough that you’re able to see the results you desire.

How Long Do Real Estate Crowdfunding Sites Need to Market Themselves Before Seeing Results?

No one sees results from marketing overnight. We also can’t say exactly how long it will take. For some, results are apparent within a few months; for others, it takes six months or longer to see a difference.

How Often Should A Crowdfunding Platform Send Emails?

How often you should send emails depends on your audience. Typically, once or twice a month is good, but if you target the younger generations, you may get by with more frequent communication to engage your audience.

Do Crowdfunding Platforms Need to Be on All Social Media Platforms?

Crowdfunding platforms should be on the social media platforms their target audience likes. For example, if you target older generations, Facebook will likely give you the best return on your investment, but if you target younger generations, you may want to look into Instagram and TikTok.

Get Professional Help With Your Real Estate Crowdfunding Marketing Plan

If you’re scratching your head wondering how you’ll start or implement a real estate crowdfunding marketing plan, it’s time to get professional help. The experts at SJ Digital Solutions provide extensive experience and knowledge in both real estate investments and marketing to help you create a marketing plan that works.

If you’re ready to work with an agency that will help you see a real difference in your client base with new marketing strategies, contact us today!

About The Author

Samantha hawrylack, follow along on instagram.

@SJDIGITALSOLUTIONS

real estate crowdfunding business plan

Latest on the Blog

Top 10 fintech marketing strategies, 10 types of financial speaker marketing strategies you need to try, the best financial planner marketing strategies, certifications & awards:.

Google Analytics Certification

  • Content Marketing for Accountants
  • Content Marketing for Alternative Lenders
  • Content Marketing for Asset Managers
  • Content Marketing for B2B Lenders
  • Content Marketing for Banks
  • Content Marketing for Bookkeepers
  • Content Marketing for Brokerage Firms
  • Content Marketing for CFAs
  • Content Marketing for Credit Card Companies
  • Content Marketing for Credit Repair Companies
  • Content Marketing for Credit Unions
  • Content Marketing for Finance Authors
  • Content Marketing for Financial Advisors
  • Content Marketing for Financial Coaches
  • Content Marketing for Financial Media
  • Content Marketing for Financial Planners (CFPs)
  • Content Marketing for Financial Services
  • Content Marketing for Financial Speakers
  • Content Marketing for Fintech
  • Content Marketing for Insurance Companies
  • Content Marketing for Investing Apps and Platforms
  • Content Marketing for Money Experts
  • Content Marketing for Mortgage Companies
  • Content Marketing for Payday Lenders
  • Content Marketing for Subprime Lenders
  • Content Marketing for Virtual CFOs

Branding by Studio Lyn . Web Design by Bethany Works® Design Studio .

Copyright © 2019-2024 SJ Digital Solutions™ LLC

  • Personal Finance Accounts Best Credit Cards Best Financial Advisors Best Savings Accounts Apps Best Banking Apps Best Stock Trading Software Robinhood Alternatives TurboTax Alternatives Brokers Brokerage Account Taxes Brokers for Bonds Brokers for Index Funds Brokers for Options Trading Brokers for Short Selling Compare Online Brokers Forex Brokers Futures Brokers High-Leverage Forex Brokers MetaTrader 5 Brokers Stock Brokers Stock Brokers For Beginners
  • Insurance Car Best Car Insurance Rental Car Insurance Motorcycle Best Motorcycle Insurance Seasonal Insurance Vision Best Vision Insurance Types of Vision Insurance Vision Insurance For Kids Vision Insurance For Seniors Health Affordable Health Insurance Best Health Insurance Companies Individual Health Insurance Self-employed Health Insurance House Earthquake Insurance Flood Insurance Homeowners Insurance Mobile Homes Moving Insurance Renters Insurance Sewer Line Dental Affordable Dental Insurance Best Dental Insurance Dental Insurance With No Annual Maximum Dental Insurance With No Waiting Period Kids Dental Insurance Medicare Compare Medicare Plans Cost of Hospital Stays Life Term Life Insurance Business Best Business Insurance Pet Best Pet Insurance
  • Investing Penny Stocks Best EV Penny Stocks Best Penny Stocks Penny Stocks Under 10 Cents Penny Stocks With Dividends Futures Best Futures Trading Software Futures to Trade Futures Trading Courses Strategies Trading Platforms for E-Mini Futures Stocks Best Stock Charts Best Stocks Under $50 Best Stocks Under $100 Best Swing Trade Stocks Best Time to Trade Cash App Stocks How to Invest Stock Market Scanners Stock Market Simulators Stocks to Day Trade Forex Forex Demo Accounts Forex Robots Forex Signals Forex Trading Apps Forex Trading Software How to Trade Forex Making Money Trading Forex Trading Courses Trading Strategies Options Options to Buy Options Trading Apps Options Trading Books Options Trading Courses Paper Trading Swing Trading Options Trading Examples Trading Simulators Trading Software Trading Day Trading Apps Day Trading Books Day Trading Courses Day Trading Software Day Trading Taxes Prop Trading Firms Trading Chat Rooms Trading Strategies Alternative investing Alternative Investment Platforms Best REITs Best Alternative Investments Best Cards to Collect Best Gold IRAs Investing in Precious Metals Investing in Startups Real Estate Crowdfunding ETFs Commercial Real Estate ETFs International ETFs Monthly Dividing ETFs
  • Mortgage Best Mortgage Companies FHA Lenders First Time Buyers HELOC & Refinancing Lenders for Self-Employed People Lenders That Do Not Require Tax Returns Online Mortgage Lenders
  • Crypto Best Crypto Apps Business Crypto Accounts Crypto Day Trading Crypto Exchanges Crypto Scanners Crypto Screeners Earning Interest on Crypto Get Free Crypto How to Trade Crypto Is Bitcoin a Good Investment?

How to Use Crowdfunding to Invest in Real Estate

Benzinga readers look to Arrived Homes and Fundrise for real estate crowdfunding.

Real estate can be a great way to diversify your portfolio and earn passive income. However, traditional real estate often requires high minimum investments, time to spend managing the investments and thorough knowledge of real estate law and regulation. Though it can be a great investment, the capital and time restrictions may be enough to deter investors from participating. 

Real estate investors who can’t afford to spend much time managing their properties or the high minimums associated with the real estate market may want to explore crowdfunding options. Learn how to use crowdfunding to build a diverse real estate portfolio and see whether it can help you achieve your financial goals. 

What Is Crowdfunding in Real Estate?

Steps for how to use crowdfunding to invest in real estate, compare real estate crowdfunding platforms, accessible real estate investing, frequently asked questions.

Crowdfunding is the process of gathering other investors to pitch in on a single investment opportunity. This can be done formally through platforms or informally among family and friends. It’s a great way to invest in a property or other opportunity that an investor couldn’t afford on their own. Crowdfunding can also help create a diverse portfolio of real estate holdings. Instead of investing a large sum into fully owning one property, investors can divide their capital for exposure to several properties that vary in type and market.

In the real estate market, crowdfunding has become a common practice. Many investors use crowdfunding platforms to identify real estate properties that are already vetted by a team of professionals. Investors can view the property details, and the investment time horizon and purchase one or multiple shares of the property. 

There are two common models for real estate crowdfunding: equity crowdfunding and debt-based crowdfunding. In equity crowdfunding, the investors own a piece of the property. They may receive passive income from rent payments and returns as the property appreciates. In debt-based crowdfunding, the investor’s capital is loaned to the property owner, typically to try to buy a property. In this model, the investors are earning passive income from interest payments.

What Else Can Crowdfunding Be Used For?

Crowdfunding also is a popular way to raise equity outside of the real estate market. It can be used to raise capital for startup businesses, art projects and nonprofit causes. Crowdfunding is typically used to raise equity for a business or project or to loan capital to an individual. 

Many platforms connect you to crowdfunding opportunities. Here are step-by-step instructions to start building an informed, diverse real estate portfolio. 

Researching and Selecting the Right Crowdfunding Platform

Before you can search for investment opportunities, you’ll want to choose the best crowdfunding platform. There are several on the market, and they may seem similar. However, every platform has unique features and pricing structure.  

First, find a platform that has the opportunities you’re interested in. You’ll also want to research the vetting process for the properties it lists. Once you find a few platforms that have the types of real estate you want to invest in, you’ll need to conduct thorough research, considering track records, fees, exit opportunities and minimum investments. Some platforms may only allow accredited investors . You’ll be able to find most of this information on the platform website, but you’ll also want to look at third-party reviews and testimonials of past and current users. 

Creating an Investment Strategy

Before making your first investment, you must create a strategy that will help you achieve your goals. Consider your goals and risk tolerance. This will help you create a budget for your real estate investments and filter through investments that don’t fit your strategy. 

There are a few types of real estate, the most common being residential, commercial and development. People who invest in residential properties could own shares in single-family homes or apartment/condo complexes. Investors can earn strong returns from rent and property appreciation, but leases are often year-to-year, so they may not be the most stable.

Commercial properties are rented by other businesses and typically have longer leases for added stability. These properties could be rented to retailers, distribution centers, manufacturing facilities or other companies. 

Development real estate is undeveloped land purchased with the intent to build on it and raise the property value. This can be a riskier investment because there’s no guarantee the project will work as intended. However, it can also produce strong returns.

Crowdfunding allows investors to fairly easily purchase shares in multiple properties and projects. Investing across the types of real estate can help investors build a diverse portfolio that will mitigate the risk of market volatility. 

Assessing Real Estate Investment Opportunities

Many platforms vet the properties they list to ensure they are high-quality, legitimate investments. However, that does not guarantee that they are the best fit for your portfolio. Before investing, review the property’s location and type to identify the target market. You should also view the projected returns and exit strategies. Consider how these factors fit in with your overall strategy.

You should also compare these details to overall market trends. If it’s a single-family home, you’ll want to research average rent prices for that location, property trends and whether it seems like there’s room for growth. Conducting research will help ensure that your portfolio is full of high-quality investments that will serve your goals.

Managing Risks and Mitigating Potential Pitfalls

Real estate investing is risky because of market volatility and constantly changing consumer sentiment. The risk extends to crowdfunding opportunities, and investors should be aware to protect their investments. Lack of control, government regulation, market volatility and unsecured investments are just a few common risks associated with real estate crowdfunding. Though you’ll never be able to create a risk-free portfolio, there are actions you can take to mitigate it.

First, create a diverse portfolio. Changes in the economy will affect each area of real estate differently. For example, residential properties may decrease in value while commercial properties hold steady. Trends will also vary from location to location, so it’s also important to spread your investments geographically. 

Understanding the real estate market is important. Crowdfunding allows investors to be passive in their investments, but that doesn’t mean they should go into it blind. Understanding real estate market trends will inform your investment decisions. Ongoing monitoring will ensure that your investments continue to align with your interests and can help you determine when you may need to rebalance.

Engaging with Crowdfunding Community and Professionals

Investing can seem solitary, but the real estate investing community can provide valuable insights and opportunities. Experienced crowdfunding investors have years of knowledge you can learn from and provide you with a contact that you can reach out to with questions or concerns. 

It’s also important to have contacts in the real estate industry, such as property managers, legal advisers and real estate agents. The professionals can provide a business perspective that can help you identify good opportunities. Plus, you’ll have a network to fall back on in case you ever find yourself in need of one of these professionals.

Connecting with other investors and real estate experts is easier than ever thanks to the rise in social media and the internet. You can join social media groups, follow industry contacts and join online forums. In addition to the online community, in-person industry events are still going strong and are a great way to connect with others.

Monitoring and Exiting Investments

Just like traditional investments, it’s crucial to regularly monitor your crowdfunding real estate investments to ensure they continue to align with your goals. Crowdfunding is often an illiquid, long-term investment and there may not always be the option to exit prematurely. Before investing and choosing a crowdfunding platform, ensure you understand and are comfortable with the exit policy.

Finding the best real estate crowdfunding platform is the first step in building your real estate portfolio. Here are some of the key features of the top platforms on the market.

Get Top Offerings

Arrived Homes

This is a testimonial in partnership with Fundrise. We earn a commission from partner links on Benzinga.com. All opinions are our own.

Yieldstreet

The real estate market has many exciting opportunities but has traditionally not been accessible to the majority of investors. Real estate crowdfunding allows investors to gain real estate exposure with lower minimum investment requirements and without the responsibility of managing a property. Conduct research into the top crowdfunding apps and learn how to use crowdfunding to invest in real estate and grow your portfolio.

Do you have to pay back crowdfunding?

Investors are often repaid the principal investment at the end of the investment term.

What is the average return on real estate crowdfunding?

Most real estate crowdfunding platforms see returns of around 10%, but occasionally can earn more. Returns do vary year to year because of market volatility and other economic factors.

Is crowdfunding a good way to invest in real estate?

For investors who don’t have the time or capital to purchase entire properties, crowdfunding can be a great way to earn passive income and diversify your investments into the real estate market.

Before you go, we think you'll find these real estate investment offerings even more interesting. Looking for even more exciting opportunities? Subscribe below to get notified as soon as interesting new offerings are added to our real estate investment screener .

real estate crowdfunding business plan

Austin Cityfund

real estate crowdfunding business plan

Miami Cityfund

real estate crowdfunding business plan

Phoenix Cityfund

Looking for additional offers? Sign up to get offers directly to your inbox!

Seth Williams

Table of Contents

What is real estate crowdfunding, project types: debt vs. equity, which websites are worth investigating, realtymogul, equitymultiple, crowdstreet, an emerging industry, real estate crowdfunding: a beginner’s guide to investing in property online.

Innovative Investing , Creative Financing, List Posts, Reviews, Video Tutorials

Real Estate Crowdfunding Websites

REtipster does not provide tax, investment, or financial advice. Always seek the help of a licensed financial professional before taking action.

If you've ever dreamed about investing in real estate but had no idea where to start (or whether you wanted to deal with all the headaches that come with the trade), you owe it to yourself to get educated about real estate crowdfunding .

In recent years, several new crowdfunding and peer-to-peer lending platforms have popped up online, offering fascinating new ways for investors to diversify their retirement savings by putting their money to work in real estate.

Considering the advantages that real estate offers (e.g., income, appreciation, and tax benefits, to name a few), this may be worth a closer look at.

To most people, crowdfunding as an investment strategy is still relatively new.

Back in mid-2012, the JOBS Act was signed into law with bipartisan support, which opened the door for broad solicitation of private investments, which is why all of these crowdfunding websites started popping up around this period.

With the passing of the JOBS Act, “ accredited investors ” (individuals with a net worth exceeding $1 million or more OR an annual income exceeding $200K for at least two years) are now able to invest in smaller portions of real estate deals through crowdfunding and peer-to-peer lending.

crowd b-and-w

The problem with real estate investing is, most conventional properties require hundreds of thousands (if not millions) to acquire and/or develop.

Even if you're a multi-millionaire, unless you're getting a truly remarkable deal, it usually isn't pragmatic to acquire an entire property (and all the debt associated with it) all on your own . Taking on a massive project like this by yourself requires a lot of work, due diligence, debt, risk and hassle – and most people aren't cut out for it.

This is where the beauty of crowdfunding comes into play.

By participating in a real estate project financed through crowdfunding, you can be one of MANY different financiers or equity holders to invest a small portion into the overall project.

Rather than putting down ALL the cash it would take to acquire a $1 million building, you can invest in smaller “chunks” of the project – like $5K, $10K or $20K (depending on the project and which website you're working with).

The projected returns on these types of deals can vary quite a bit. Still, from what I've seen in the various sites I've explored, the numbers tend to range from 8% (at the lower end) to as high as 14%, and they fluctuate based on the level of risk associated with the deal, and the type of project it is.

project type

These projects are being financed with at least one (and sometimes multiple) loans, and a portion of the overall loan proceeds are coming from the money you invest . Your funds are essentially being borrowed by a real estate investor/developer, and assuming all goes as planned, you and all the other investors will eventually get paid back by the borrower with interest.

Most (though not all) of the debt deals I've seen tend to have an earlier maturity date (e.g. – 12 – 24 months), allowing the investors to pull their money back out in a shorter period of time. A maturity timeline of 1 – 2 years is fairly common, but with the faster turnaround, the return is usually along the lower end of the spectrum.

Equity Deals

Equity investments put investors in an indirect ownership position, which allows them to participate in the property’s excess cash flow AND any appreciation that happens when the property is eventually sold. These investments are usually for longer periods of time (3 – 5 years), because these projects typically involve extensive renovations to the property or other “value-add” efforts by the borrower. These investments typically involve quarterly cash flow distributions and have certain tax advantages.

There are actually some different types of “equity” available with these types of projects, often referred to as “common equity” and “preferred equity”.

Common Equity

In terms of risk – common equity investors are the most vulnerable to loss if a deal falls apart, making this one of the riskiest investments among the different product types. If the property’s value fails to appreciate or generate sufficient cash flow to cover the debt and preferred equity hurdle rates, the common equity investors get hit first and could experience a negative return. On the same coin, common equity deals typically involve a “preferred return” (often 7-10%), payable to investors quarterly. These investors also get to share in any appreciation (or depreciation) upon the sale of the property – which generally causes equity investments to have the highest potential return among the various investment types.

Preferred Equity

Preferred equity deals share some similarities with both debt deals and common equity deals. With this type of investment, the investor has an indirect ownership stake in the property, but since it's  preferred  equity – these investors will also be in better position in any bankruptcy scenario. Similar to debt deals, preferred equity involves fixed terms and regular payments (typically monthly) and it is treated like debt for tax purposes.

In terms of risk – preferred equity deals are somewhere in the middle, between debt deals and common equity deals. In the event of default, preferred equity holders get paid before the common equity owners, but after the debt holders. Preferred equity projects typically have a payback term of around 2 – 3 years, which is longer than most debt deals, but shorter than most equity deals.

This diagram from RealtyShares gives a good visual portrayal of the risk and reward outlook from each type of investment product…

capital stack

The critical point to remember is there is always a risk of loss in a crowdfunded real estate deal. Like any real estate investment, there are no guarantees that the projected numbers will pan out exactly as planned.

This is part of the value proposition that crowdfunding brings to the table. With the ability to invest smaller portions of money in multiple projects, it becomes much easier to mitigate your overall risk . If a $5,000 investment goes sideways, it won't be nearly as catastrophic to a single investor as a $1,000,000 investment going sideways.

You can use crowdfunding to spread out your investing activity, which makes it ideal if you have no experience in real estate OR if you're already running a profitable real estate investing business. In either case, it's an investment strategy that allows you to pay the cash and let someone else do all the number-crunching and grunt work for you.

As I've been keeping my eye on this space over the past couple of years, I've looked into several different websites that are doing some pretty cool, innovative things for this emerging industry. The ones I'll be talking about here certainly are NOT the only ones out there, but from what I've seen, they've all generated a fair amount of buzz and interest in the industry.

It's also worth noting that I have invested with some of these platforms but not all . I can't offer much feedback on how their deals are vetted or how my returns have panned out with each one, but I can give a fairly decent overview of how each website is laid out and how easy it is to get started with each one.

REtipster features products and services we've used, tested, and think you'll find useful. If you buy something featured here, we may earn an affiliate commission. Learn more.

Fundrise has earned a massive following since it was founded in 2010. This site makes it very easy to choose from dozens of eREIT funds to invest in, which can help to diversify anyone's investment portfolio. Here's a video tour of how their system works…

Disclosure: I’ve been investing with Fundrise since 2017. When you sign up with my link, I earn a commission. All opinions are my own.

Here are some quick stats on the company:

  • Fundrise was founded in 2010.
  • Since inception, Fundrise has originated more than $250 million in both equity and debt investments deployed across more than approximately $1.4 billion of real estate property.
  • As of July 24, 2017, their equity and debt originations have been deployed across approximately 110 real estate transactions.
  • Fundrise has over 150,000 users on their platform. Accreditation is not a requirement to invest in the eREITs or eFunds, as their mission is to democratize access to high-quality private real estate investments.

Open a Fundrise Account

Fundrise is a bit different from the other websites listed here because the investors don't invest in one specific property. Instead, their funds are invested into a pool of properties , from which they earn a return (with a maturity date of approximately 5 years).

What I like about Fundrise is that they  don't require their investors to be accredited (i.e. – you don't have to already be filthy rich or make tons of money to get involved). I was able to invest as little as $1,000 on the site earlier this year and to date, the funds have earned an approximately 8% return (of course, that's just my experience – yours will probably vary to some degree – but that's what I've seen so far).

RealtyMogul is similar to Fundrise in that, this platform has pivoted towards offering funds that combine multiple real estate properties into a single investment product, a similar concept to the real estate investment trusts ( REITs ) that existed since long before the JOBS Act.

These REITs offer built-in diversification, which may make sense for investors that lack the time, knowledge, or means to spread their investment dollars across specific properties and markets. On the other hand, some investors may be turned off by the lack of transparency. These platforms typically make more sense for non-accredited investors looking for built-in diversification at a very low minimum.

This video from RealtyMogul explains their REIT product a bit more…

The company also offers some investment opportunities for individual properties (for accredited investors), in addition to the REIT funds they have available (for non-accredited investors).

Here are some quick stats on this company…

  • RealtyMogul began operating in 2013.
  • More than $300 million has been invested through the RealtyMogul platform since its inception
  • RealtyMogul has over 140,000 total investors registered with its platform.

Open a RealtyMogul Account

At the time of this writing, RealtyMogul has multiple REIT products available – and you don't need to be an accredited investor to participate. However, the minimum investment amounts range from $5,000 – $10,000, so you'll have to commit at least this much in order to start investing with them.

One thing that differentiates RealtyMogul from other REIT providers is the higher level of voluntary oversight and regulation than other companies with similar offerings. They physically walk every property, have a more conservative underwriting process, and evaluate every deal from scratch, regardless of what information has been pre-packaged for their underwriters.

EquityMultiple is one of the smaller, but quickly growing crowdfunding platforms on the market today. Here's another video overview I put together as I started exploring their site a bit more…

  • EquityMultiple began operating in 2015.
  • More than $14 million has been invested through the EquityMultiple platform since its inception.
  • More than 30 investments have been funded on the EquityMulptiple platform since its inception.
  • EquityMultiple has a nationwide network of over 5,000 accredited investors that can evaluate projects.
  • EquityMultiple averages around 30 investors per deal.
  • The average investment size is $25,000 per investor.
  • EquityMultiple has processed over 40 properties in 15 states.

Open an EquityMultiple Account

There are a few things about EquityMultiple that makes them unique…

  • Institutional Focus: Their partnership with Mission Capital (an established real estate advisory firm in Manhattan) gives them access to larger, more exclusive commercial projects.
  • Combination of Equity/Preferred Equity/Senior Debt: EquityMultiple is one of the few platforms that consistently offers all three, which gives investors a nice range of risk/return profiles and hold periods, which helps promote diversification.
  • Debt Syndication: RealtyShares, for example, offers a debt product by acting as the lender. The EquityMultiple model is to work with established lenders to “ syndicate ” a preexisting loan. Since they do their own diligence on the lender, the borrower, and the project, they feel that this best protects investors by giving them an extra layer of underwriting. To my knowledge, PeerStreet is the only other platform that operates in this way, but they're focused exclusively on single-family fix-and-flips.

CrowdStreet is the nation's largest online private equity real estate investing platform.

  • CrowdStreet began operating in 2014 and is headquartered in Portland, OR.
  • Over 540 commercial real estate offerings have been published by the company.
  • More than 100,000 investors in the U.S. have invested with CrowdStreet.
  • Investors with CrowdStreet must be accredited investors .
  • For most of CrowdStreet's offerings, the investment minimum is $25,000.

Open a CrowdStreet Account

Like with any investment, investing in a REIT with CrowdStreet is speculative and involves risk, including illiquidity and complete loss of invested capital and there are no guarantees of future success. Always conduct your own due diligence or discuss with a financial adviser before making any investment.

PeerStreet is a platform with some similarities to RealtyShares and EquityMultiple in that, you need to qualify as an accredited investor in order to participate in their investment opportunities.

One nice aspect of the PeerStreet platform is that they have a minimum investment amount of $1,000 in order to open an account – so even though you may have money as an accredited investor, you don't necessarily need to commit such large amounts to each deal you invest in.

This video explains the process (which should look familiar by now)…

  • PeerStreet  went live to all accredited investors in 2015
  • More than $500 Million has been invested through the  PeerStreet  platform since its inception.
  • More than 1,200 investments have been funded on the  PeerStreet  platform since its inception.

Open a PeerStreet Account

PeerStreet also has an interesting “Automated Investing” feature that allows investors to get allocated into loan investments automatically based on their investment criteria (and it's also a simple way to build up a portfolio of investments). When a loan investment becomes available that matches an investor's given criteria, they'll receive an allocation based on PeerStreet's prioritization algorithm.

To date, PeerStreet has focused 100% on first-position liens on real estate . In other words, money invested through PeerStreet goes into the safest place in the capital stack, because it's the first position to be paid back. Rather than sourcing loans from borrowers, they work with existing private lenders across the country who know each local real estate market. PeerStreet vets them and their loans, which helps them scale while maintaining quality.

It's exciting to see how these online platforms are making the world of real estate investing more accessible to investors who otherwise wouldn't be able to play in this space. At the same time, there’s still plenty of reason for each individual investor to proceed with caution.

Above all, it’s important to note that not all platforms are created equal, and these real estate crowdfunding websites have separated into different investment product lines since the JOBS Act was passed.

No matter how offerings are structured, investors should carefully consider the relevant experience and expertise of the people behind the organization. Any real estate platform worthy of your investment dollars should be transparent, attentive, and able to declare a strong case for any particular offering.

About the author

Seth Williams

Seth Williams is the Founder of REtipster.com - an online community that offers real-world guidance for real estate investors.

Related articles

Tax hacks: doing a 1031 exchange (the easy way) with realtymogul, equitymultiple review: the most flexible crowdfunding for accredited investors, groundfloor review: strong returns on short-term investments, crowdstreet review: private equity deals for accredited investors, discover the retipster club.

Learn what successful investors aren’t telling you. Become a member, achieve financial freedom and make your dream a reality!

Join our growing community

subscribers

Welcome to REtipster.com

We noticed you are using an ad blocker.

We get it, too much advertising can be annoying.

Our few advertisers help us continue bringing lots of great content to you for FREE.

Please add REtipster.com to your Ad Blocker white list, to receive full access to website functionality.

Thank you for supporting. We promise you will find ample value from our website. 

Thanks for contacting us! We will get in touch with you shortly.

This podcast is your new go-to source for inspiration and knowledge about real estate, property management, entrepreneurship, and fostering meaningful connections. Co-hosts Heather Baker and Wade Isley from Love First Homes dive into the art of building a small property management business. Sharing case studies, honest entrepreneurship tips including legal and marketing 4-1-1s, resources for growing your property management practice, and more. Episodes are released weekly on Thursday. You can expect candid conversations, tons of dad jokes, and, of course, expert insights.

Real Estate Imagined Small Business Podcast Love First Homes

  • APR 11, 2024

2: Real Estate Retirement Plan, Fix-and-Flip Investing for Beginners, and Putting Heart into Business

Affinity for real estate and aligned values brought Heather and Wade together. Like most entrepreneurs, our dreams are lofty, but we try to break them down one step at a time. In this episode, we discuss a potential retirement plan for real estate investors using conventional loans, fix-and-flip tips for beginners, who you should consider as your broker, lender, etc., and more. --- Send in a voice message: https://podcasters.spotify.com/pod/show/real-estate-imagined/message

  • APR 4, 2024

1: How to Save $15,000 in Your Real Estate Business with ONE Small Trick and Introducing Love First Homes

Wade bought two houses before turning 25 years old. Meanwhile, Heather championed the "learn as you go" business model that ended in losing nearly $15,000 on a property gone wrong.  Everything changed when they met at their 9-to-5 position in October 2021. Now, we're a team of property managers using the Entrepreneurial Operating System in Northern Idaho, and avoiding costly mistakes like the one Heather experienced on her first attempt at operating an Airbnb.  In this episode, we break down how we avoid costly mistakes, the first steps in starting a company with a partner, Love First Homes' mission, vision, and core values, and more. --- Send in a voice message: https://podcasters.spotify.com/pod/show/real-estate-imagined/message

  • MAR 29, 2024

Building Your Small Business in Real Estate with Love First Homes

Real Estate Imagined is your hub for property management and small business insights. The hosts, Heather and Wade, have 5+ combined years of experience in real estate including land stewarding and a major AirBnB fail that you can hear all about in Episode 1, releasing April 4, 2024. New episodes will be released on Thursdays with topics including starting your first business venture, forming a partnership, finding software solutions for your property management company, marketing your services, and so much more! Hit "Follow" to receive notifications about the release of our videos each week. __________________________________________________ Learn more about starting your business by participating in our daily TikTok trivia: https://www.tiktok.com/@realestateimagined Get the latest updates from Heather and Wade by subscribing to our email list: http://eepurl.com/iMFteM --- Send in a voice message: https://podcasters.spotify.com/pod/show/real-estate-imagined/message

  • © Love First Homes

Top Podcasts In Education

You might also like.

TechBullion

TechBullion

What factors drive the success of real estate developments.

real estate crowdfunding business plan

Real estate development is a complex and multifaceted industry that requires strategic planning, market research, and effective execution to succeed. In this blog post, we will discuss the key factors that contribute to the success of real estate developments, offering insights into the various aspects that developers should consider for a successful project.

1. Location

The most crucial factor in any real estate development is its location. The saying “location, location, location” holds true as it determines the potential success and profitability of a project. A well-located property can attract buyers and tenants, providing them with easy access to amenities such as schools, hospitals, shopping centers, and transportation hubs. Proximity to business districts, recreational facilities, and cultural landmarks can also significantly enhance the appeal of a development. Check out some of the Flats in Trichy for Sale if you are looking for properties in prime locations of the city.

2. Market Analysis

Thorough market research is essential for understanding the demand and supply dynamics of a given area. Developers need to analyze current trends, property values, and demographic data to gauge the potential success of a project. This information can guide the decision-making process, helping developers choose the right type of property and target market for their development.

3. Design and Architecture

The design and architecture of a real estate development play a pivotal role in its success. Thoughtful design that takes into account the needs and preferences of the target audience can make a project more appealing. Aesthetic considerations such as architectural style, landscaping, and interior finishes can set a development apart from competitors. Developers should collaborate with skilled architects and designers to create visually appealing and functional spaces.

4. Financing and Budgeting

Securing adequate financing and maintaining a well-managed budget are critical for the success of any real estate development. Developers must carefully plan their financial resources, considering both short-term and long-term costs. Proper budgeting helps avoid unexpected expenses and keeps the project on track. Collaborating with experienced financial advisors and lenders can provide valuable guidance in navigating the financial aspects of development.

5. Regulatory Compliance

Real estate developments are subject to various regulations and permits that must be obtained from local authorities. Compliance with zoning laws, building codes, and environmental regulations is essential for avoiding legal issues and project delays. Developers should work closely with legal experts and consultants to stay informed about the relevant regulations and obtain necessary approvals.

6. Project Management

Effective project management is key to completing a real estate development on time and within budget. Coordinating various aspects of the project, such as construction, marketing, and sales, requires strong organizational skills and attention to detail. Hiring experienced project managers can help streamline the development process and minimize potential risks.

7. Sustainability

Sustainable development has become increasingly important in the real estate industry. Projects that prioritize energy efficiency, water conservation, and the use of eco-friendly materials can appeal to environmentally conscious buyers and tenants. Incorporating sustainable practices not only benefits the environment but can also lead to long-term cost savings for developers and occupants.

8. Marketing and Sales

Effective marketing and sales strategies are essential for attracting potential buyers and tenants to a development. A well-planned marketing campaign can generate interest and drive demand, while skilled sales teams can convert leads into successful transactions. Developers should leverage digital marketing, traditional advertising, and networking to reach their target audience.

The success of real estate developments depends on a combination of factors, including location, market analysis, design, financing, regulatory compliance, project management, sustainability, and marketing. By carefully considering these aspects and implementing best practices, developers can increase the chances of achieving a successful and profitable project. As the industry continues to evolve, staying informed about emerging trends and adapting to changing market conditions will be key to long-term success.

real estate crowdfunding business plan

Trending Stories

real estate crowdfunding business plan

60+ Best Side Hustles to Make Money

Looking to boost your income but not sure where to start? Figuring out the...

Pioneering Precision:

Pioneering Precision: Mamata Khirade’s Role in Shaping Modern Healthcare through Bioinformatics

What does it take to turn genetic information into a roadmap for personalized medicine?...

Cryfi Brings Blockchain-Verified Trading Signals to Growing Crypto Community

Cryfi Brings Blockchain-Verified Trading Signals to Growing Crypto Community

With more and more people entering the crypto trading space, pro traders are increasingly...

real estate crowdfunding business plan

Google Opens a New Office in El Salvador to Support Digital Transformation

Google has opened a new office in El Salvador to support digital transformation. Takeaway...

real estate crowdfunding business plan

3 Companies Revolutionizing FoodTech and Set the Trends in FoodTech Innovation

The food industry is constantly evolving, and in 2024 technology is shaping its future....

From Signals to Solutions

From Signals to Solutions: How Mobile Innovations are Addressing Global Challenges

The rise of mobile innovations has brought us closer together and spearheaded solutions to...

Which Crypto to Buy Today For Quick Profits in April 2024?

Which Crypto to Buy Today For Quick Profits in April 2024?

As the bitcoin halving looms in April 2024, the question on every investor’s mind...

Market Maker Brokers

Best Market Maker Brokers for 2024

Brokers in the Forex trading industry have different business models, but most of them...

Exploring the Digital Palate: The Fusion of Technology and Food

Exploring the Digital Palate: The Fusion of Technology and Food

In today’s digital age, technology permeates every aspect of our lives, including how we...

real estate crowdfunding business plan

TSMC Foresees Gains In Stock Market

Taiwan Semiconductor Manufacturing Co. may see further gains in the stock due to its...

real estate crowdfunding business plan

Telegram Platform To Hit 1 Billion Users

In statements released today, Pavel Durov, the inventor of Telegram, a messaging app that...

real estate crowdfunding business plan

Libertum: Spearheading the Tokenization of Real-World Assets in the Crypto Space

In the dynamic landscape of cryptocurrency, the success of Exchange-Traded Funds (ETFs) has been...

real estate crowdfunding business plan

Roblox Economy – Insights and Trends

In the vast and vibrant world of online gaming, Roblox stands out not just...

Marketing Companies

Marketing Companies in London Ontario: A Comprehensive Guide

Marketing Companies in London Ontario play a role for businesses aiming to broaden their...

real estate crowdfunding business plan

Setting the Stage for Growth Litecoin (LTC) and Internet Computer (ICP) Join Koala Coin (KLC) in Showcasing Market Strength

Contrary to belief not all cryptos falter in their infancy. Koala Coin (KLC), alongside...

real estate crowdfunding business plan

Establish Your Crypto Future: Three Key Portfolio Tokens to Secure

As the crypto bull run of 2024 charges onward, savvy investors are locking eyes...

Your Complete Workspace Management Solution

Maximize Productivity: Your Complete Workspace Management Solution

In the modern era of remote work and flexible schedules, managing a workspace efficiently...

real estate crowdfunding business plan

BlockDAG’s Projected 30,000% ROI Surpasses Ethereum ETF and Cardano Price Forecasts, Leading to a $0.001 Price Increase

BlockDAG is quickly establishing itself as a powerhouse in the cryptocurrency world, with a...

real estate crowdfunding business plan

BlockDAG’s 20,000x ROI Draws Investors from Cardano and Polkadot as Market Corrections Contribute to a $0.001 Price Increase

In the current cryptocurrency correction phase, notable altcoins such as Cardano (ADA) and Polkadot...

real estate crowdfunding business plan

A List of Tech Solutions Reshaping Operations for Modern Legal Firms

In the fast-paced landscape of legal practice, the integration of technology has become indispensable...

Like Us On Facebook

Latest interview.

Anastasia-Nikita Bansal, CEO of Teqblaze

Technology White-label Solution for Programmatic Advertising; Interview With Anastasia-Nikita Bansal, CEO of Teqblaze

Hey there! I’m Niki. More than six years ago, I started my journey in AdTech, initially as a project manager at Smarty...

Latest Press Release

NTT DATA and Reiz Tech Announce New Venture to Target DACH

NTT DATA and Reiz Tech Announce New Venture to Target DACH 

The joint venture – LITIT — built on previous collaborative successes of its parent companies, aims to transform the IT landscape of...

Pin It on Pinterest

Ecosystem Kalinka

Luxury real estate in Russia, Europe, Asia and Middle East for a comfortable life and profitable investment. Our team — it is an association of market professionals, innovations and digital technologies, traditions and continuous development.

In the premium real estate market

Share of the moscow market, clients, including the forbes list, objects in the company's database., market experts work in the company, cumulative revenue, company turnover per year, the most expensive penthouse sold, ekaterina rumyantseva.

CEO of Kalinka Ecosystem

real estate crowdfunding business plan

Our Mission: Tradition & Innovation

real estate crowdfunding business plan

Pre–sale preparations

  • Examination of competitors' sales
  • Securing our sales plan
  • Creation of a sales office
  • Product training for brokers
  • Development of efficient financial instruments
  • Developing sales incentives

real estate crowdfunding business plan

  • Implementation of sales plan
  • Premium brokerage/ brokers school
  • Own client base
  • Sales funnel management
  • Mortgage broker services
  • Legal support
  • Monitoring of all stages of implementation

real estate crowdfunding business plan

After–sales service

  • Working with accounts receivable
  • Informing the customer about the project status
  • Working with customer reviews
  • Loyalty programs
  • Recommendation deals

real estate crowdfunding business plan

International recognition

Aldar Properties

TOP Performing Dubai Agency

real estate crowdfunding business plan

TOP 15 Performing Agency

real estate crowdfunding business plan

Envoy Category

real estate crowdfunding business plan

AZIZI Developments

real estate crowdfunding business plan

TOP Performing Agency New Grade Reached

real estate crowdfunding business plan

Select Group

TOP Performing Agent Runner Up

real estate crowdfunding business plan

#1 Agen Newcomer of the Year

real estate crowdfunding business plan

TOP Performing Sales Agent Ambassador Category

real estate crowdfunding business plan

New grade reached Consul Category

real estate crowdfunding business plan

Rolls–Royce

BEST REAL ESTATE AGENCY MARKETING RUSSIA

2021 – 2022

real estate crowdfunding business plan

Awwards Winner

2019 – 2020

real estate crowdfunding business plan

BEST REAL ESTATE AGENCY SINGLE OFFICE MOSCOW

real estate crowdfunding business plan

REAL ESTATE AGENCY MOSCOW

2018 – 2019

real estate crowdfunding business plan

2017 – 2018

real estate crowdfunding business plan

official airline partner

The Telegraph

2016 – 2017

real estate crowdfunding business plan

Rolls–Royce motor cards

2014 – 2015

real estate crowdfunding business plan

in association with

Virgin Atlantic

PROPERTY CONSULTANCY RUSSIA

real estate crowdfunding business plan

2013 – 2014

real estate crowdfunding business plan

Best real estate company for high price category real estate according to the magazine «Novyy Adres»

First place in the Forbes rating № 4 (25). Leader in the number of closed deals in the segment of high-budget real estate according to the survey of NVM Business Consulting.

First place in the real estate market records award in the category of «Professional pride» with the project «Dvoryanskoye Gnezdo».

Only Russian company to win in three «International Property Awards» nominations.

Best real estate agency in Russia according to the «Premio Internazionale Le Fonti» award. Winner of two «International Property Awards» nominations.

Best real estate agency in Russia according to the «International Property Awards» with the presence of representatives of The Daily Telegraph.

First place in the «European Property Awards» in «Real Estate Agency Marketing for Russia». A high appraisal of an important part of the company’s work — management of marketing and sales of real estate developers.

First place in the «European Property Awards» in «Real Estate Agency for Moscow, Russia»

Best company in both Real estate and Marketing according to the «European Property Awards»

real estate crowdfunding business plan

Solutions for developers, investors and buyers

Urgent buyout of distress-assets, apartments trade-in, accurate assessment with ai, investors club, apartments for sale, investing in redevelopment.

«Working daily with buyers and sellers of real estate. We know everything, from the customer’s first call up to the final sales.»

Ekaterina Rumyantseva,

our own full-time team of analysts and investment advisors

Created and implemented more than 200 consulting projects, analysis of the target group behavior utilizing a modern crm system, analysis of 1,000 customer requests and 300 transactions per year, own real estate database, updated daily, purchase and support of related databases, data on real estate lots in “closed sales”, information about the actual transaction sum and bargaining, kalinka realty.

Buying, selling and renting real estate

Kalinka Consulting

Complex solutions for developers

Kalinka Legal services

Legal support and audit

Kalinka Design

Professional selection of architects and designers

Kalinka analytics

Reviews of the real estate market in Moscow and MO

Kalinka Media

Current webinars and  situation in market

Kalinka International

Profitable investment. Citizenship and residence permit

30% of real estate transactions are not done after the purchase decision has been made. That’s why we maintain a constant dialogue with the buyer, lawyers, mortgage brokers and designers, to study the needs and implement the solution.

real estate crowdfunding business plan

Our Partners

real estate crowdfunding business plan

  • AB Development
  • ANT Development
  • Capital Group
  • Central Properties
  • Insigma Development

real estate crowdfunding business plan

Investment companies

  • Capital Partners
  • Hines International
  • Absolut Bank
  • VTB Capital
  • Gazprombank
  • Sberbank Capital
  • Otkritie Capital

real estate crowdfunding business plan

Design and architecture

  • Andrew Martin
  • Artistic Design
  • Aukett Swanke
  • Candy & Candy
  • Helene Benhamou
  • Jade Jagger
  • Kelly Hoppen

real estate crowdfunding business plan

Kalinka International (UAE, Turkey)

Programs for any purpose:

  • Visa-free travel
  • Life and business abroad
  • Tax residency
  • Cross-border movement under restrictions
  • Education and career of children abroad

Kalinka Dubai

  • Buying property in the UAE
  • Sightseeing tours of the best residential complexes in Dubai
  • Capital transfer (urgent purchase of ready-made companies in the UAE, opening an account)
  • Long stay apartments
  • Yacht charter
  • School education
  • Restaurants, shopping, household matters
  • Flight organization.
  • Assistance with international itinerary planning

Simplified visa system

No income tax, high return on investment, full ownership.

The Ritz-Carlton Residences

Collection of luxury residences

UAE, Dubai, Dubai International Financial Center, Al Sukuk Street, 9/1

The complex is located on the coast of the picturesque bay of Dubai Creek, where the world-famous Ras Al Khor flamingo and wildlife sanctuary is located. A unique location among mangrove forests, small lagoons and lakes combines peace and tranquility with the advantages of a large metropolis.

Rent – Start of sales.year

DAMAC Lagoons

Family low-rise residential complex

UAE, Dubai, Dubai Land, El Hebia Fift

Family low-rise residential complex in the spirit of the Mediterranean cities in the depths of Dubai. Convenient location allows you to get to large shopping centers, business clusters and offices of international companies in 20 minutes. Nearby are medical facilities, schools, an equestrian club, golf courses and the Dubai Sports City multifunctional complex.

Rent – year

DAMAC Cavalli Tower

UAE, Dubai, Dubai Media City

Elite residential complex on the west coast of Dubai, in the prestigious Al Sufuh area.

Atlantis The Royal Resort & Residences

Complex in the center of the Palm Jumeirah crescent

UAE, Dubai, Jumeirah, Palm JumeirahUnited Arab Emirates, Dubai, Jumeirah, Palm Jumeirah

Luxury residential complex in the center of the crescent of the Palm Jumeirah in Dubai. The developed infrastructure of the man-made island is impressive: gourmet restaurants, modern fitness studios, luxurious wellness clubs, shops and boutiques in Nakheel Mall. Well-maintained walking and jogging paths stretch along the many kilometers of beaches with snow-white sands.

Canal-front luxury serviced apartments

UAE, Emirate of Dubai, Zabeel, Business Bay

Luxury canal-front serviced apartments in the heart of Dubai.

W Residences Dubai Downtown

Complex in the prestigious Downtown area

UAE, Dubai, Zabeel, Burj Khalifa

Elite residential complex in the prestigious Downtown area, in the center of Dubai.

Kalinka Turkey

  • Elite real estate
  • New buildings and secondary offers
  • Investment property
  • Sightseeing tours
  • Second Citizenship by Investment Program

Get a selection of foreign investment offers

Moscow exclusive properties, 6 unique projects, popular areas of moscow, secure business transactions, developed infrastructure.

Sociocultural cluster with modern apartment buildings

Zvenigorodskaya 2nd st., 12

The residential quarter is located on an area of 4.5 hectares, 200 meters from the Ulitsa 1905 Goda metro station, surrounded by parks: Krasnaya Presnya, Krasnogvardeyskie Prudy, the December Uprising Park and the Presnensky Childrens Park

Poklonnaya 9

Premium apartment house

Poklonnaya st., 9

he complex is located in a prestigious location in the west of the capital. Panoramic windows offer magnificent views of Victory Park, Sparrow Hills and Moscow City towers.

Victory Park Residences

Elite family residences in the west of the capital

Brothers Fonchenko st., vl. 3

he complex is surrounded by green parks and iconic sights of the city. Panoramic windows offer magnificent views of Poklonnaya Gora, the Triumphal Arch and City skyscrapers.

Capital Towers

Residential skyscrapers 500 meters from Moscow City

Krasnopresnenskaya emb., 14, building 1

A 10-minute walk from the metro stations "International" and "Vystavochnaya", a little further - the platform of the MCC "Business Center" and "Testovskaya" of the first Moscow diameter. For motorists, convenient exits to the Third Ring Road and the Garden Ring are located 6 minutes from the complex.

Neva Towers

Complex on the territory of the business center Moscow-City

Krasnogvardeisky 1st pr-d, 17-18

Panoramic windows offer direct views of the legendary Ukraina Hotel, the Government House and the embankments of the Moscow River. Residents have access to the entire infrastructure of the business district within a 10-minute walk. Afimall shopping center, multiplex cinema, cafes and restaurants, fitness studios, beauty salons and viewing platforms.

Club city on the river

Volokolamskoe sh., vl. 71/12

Moskvoretsky Park is a 5-minute walk away. In 10 minutes by car - the parks Shodnya, Pokrovskoe-Streshnevo and Stroginsky. A grandiose sports infrastructure is planned on the territory of the peninsula: more than 30 types of activities in one location and three yacht clubs in the neighborhood.

Community participation

real estate crowdfunding business plan

PR and Media

Kalinka is in the TOP-3 in terms of citation in  the media in the elite real estate market and in the TOP-5 of business class and investment segment. Monthly number of publications mentioning Kalinka  — 250-300. Main sources: RBC, Forbes, Vedomosti, Kommersant, BFM, Elitnoe.ru. Joint analytics and press releases with leading Moscow developers: Insigma, AEON, Level Group and others. The Kalinka press service is always open to the media: journalists can be sure of comments, interviews and expert opinions. We promptly respond to requests and help the editors in the preparation of objective and high-quality materials.

real estate crowdfunding business plan

A fifth of the entire interior improvement in the premium segment is created in the area of Minskaya Street

According to research of the Kalinka Ecosystem, the total area of internal landscaping in 40 projects on the premium real estate market in Moscow is 43.5 hectares.

real estate crowdfunding business plan

Russians remain the leaders in buying Turkish real estate

Russians still occupy the first place in the demand for real estate in Turkey among foreigners. However, compared to 2022, there is a decrease in demand from our fellow citizens by 17%.

real estate crowdfunding business plan

"Obydensky No. 1" became the best-selling club house in Moscow

According to a study of the Kalinka ecosystem, sales in 11 club houses started in the capital in 2023. The leader in sales was the club house "Obydenskiy No. 1", in other projects clients purchased on average four times fewer apartments.

real estate crowdfunding business plan

The Kalinka ecosystem has summed up the results of its first year of operation in the UAE.

real estate crowdfunding business plan

The Kalinka ecosystem has strengthened its top management team.

In two regional divisions of the company - Kalinka Turkiye and Kalinka Middle East - new sales directors have been appointed.

real estate crowdfunding business plan

Kalinka Middle East has received several awards from a leading developer in Abu Dhabi.

The company won in several nominations as a developer of Aldar Properties and has been included among the best real estate agencies in Abu Dhabi.

Stay up to date with the latest news

We promise to send only interesting and important articles.

real estate crowdfunding business plan

CEO of International consulting company Kalinka

Alexey <br>Chumalov

Alexey Chumalov

General manager of Kalinka Moscow

Alexander <br>Shibaev

Alexander Shibaev

General manager of Kalinka Middle East

Yulia <br>Kovaleva

Yulia Kovaleva

City real estate manager

Polina<br> Medelyanovskaya

Polina Medelyanovskaya

Denis <br>Trusov

Denis Trusov

Dmitry <br>Mezhinsky

Dmitry Mezhinsky

Mikhail<br> Dolgov

Mikhail Dolgov

Head of Country Property Department

Real estate

New buildings, new builds in moscow for sale.

real estate crowdfunding business plan

New builds in Moscow

City on the map.

Moscow is the capital of Russia, located in the west of the country on the river of the same name in the center of the East European Plain.

Why is it profitable to buy apartments from the developers in Moscow?

The city is the largest in terms of population - more than twelve million people live there. Moscow is interesting for investors, the real estate market is huge, including new builds.

The headquarters of most large companies (Russian, transnational), more than half of the central offices of Russian banks, instrument-making, mechanical engineering, metallurgical, light, chemical and food industries are located in Moscow. There is a tendency to move industrial enterprises out of the city.

The metropolis is of great importance as a transport hub through the airports of which flights are carried out, there are nine railway stations, three river ports. The Moscow Metro is one of the world leaders in terms of passenger traffic, ramification and total length.

Applicants come here, 124 higher educational institutions are waiting for them. A large number of research institutes are located in Moscow, as well as leading developments in various branches of science.

The climate is moderately continental, seasonality is clearly expressed.

New builds for sale in Moscow are being built in huge numbers. Most of the construction is funded by investors - sixty percent, that is, investors are still active (much will depend on the economic situation in the future).

The sale of apartments from developers is carried out through special accounts - when the contract is concluded, buyer's money is deposited into the bank on an escrow account. Developer has the right to receive funds after the delivery of the house, the transfer of the apartment to the buyer. Thus, if new builds for sale in Moscow from the developers are being built with funds received from banks on terms of payment of interest, it is unprofitable for the developers to violate the deadline for delivery of the object. At first glance, this is a positive factor and a well-thought-out mechanism, indicating the desire to prevent cases of fraud, dishonesty of developers; at the same time, it is an indirect confirmation of the general lack of trust, based on the experience of past years, an assessment of the situation in the present.

Apartments in Moscow from the developers are offered on installment plan basis, profitable promotions are announced, discounts are provided, and investor-buyer receives new modern communications and well-thought-out layouts. Investments generate high passive income (rent, resale) as property prices rise.

Residential complexes in Moscow are being built in compliance with European standards. Developers have positive quality reviews.

The minimum price per square meter for an apartment in a black frame is $510, according to the real estate search engine GEOLN.COM.

Criteria for choosing an apartment

The location relative to the transport network determines the degree of housing liquidity. In addition, before deciding to buy an apartment in Moscow in the new home for sale, you should analyze the prospects for the development of the location. For long-term investments, it is advisable for investors to consider residential complexes in the area of operation of the projected metro stations. Those that are close to the existing stations are also suitable, the price level in this case will be higher (the presence of the metro influenced the formation of prices). In any case, proximity to the "old" Moscow, the metro is still the most important criterion.

In the "new" Moscow (on the territory that was annexed in the course of a large-scale expansion project) infrastructure facilities are being built and jobs are being created. Financial flows should flow here. All this increases the attractiveness of residential complexes, creates conditions for the growth of their value in the long term.

Purchase of apartments by foreigners

Foreigners can buy real estate in Moscow in the new homes. Discussions about toughening the requirements for foreigners are actively initiated by individual representatives of the authorities. However, there are no decisions or draft laws at the moment.

Culture, history, tourism

The city of Moscow is one of the greatest bearers of cultural heritage, where you can see a huge number of attractions that attract residents and tourists. The most famous: the Kremlin, Red Square, St. Basil's Cathedral, the Ostankino TV tower, the monument to Minin and Pozharsky, the Tretyakov Gallery. The list goes on. It is difficult to see all the museums and ancient monuments. There are many world famous theaters in Moscow: Bolshoi Theater, Taganka, Moscow Art Theater, Sovremennik.

There are large-scale festivals, numerous exhibitions arriving with enviable regularity from the world's leading repositories, concert halls, on the stages of which the best masters are considered an honor: singers, dancers, musicians and actors of the planet.

Apartments in the new developments of Moscow represent a project that promises investors obvious advantages, taking into account the stunning scale of the city, the abundance of housing under construction, and the growth of its value. However, experts are carefully paying attention to some political and economic risks in the future, however, this can hardly stop the domestic investor in the Russian hinterland. The real estate market of the metropolis will remain in demand in the future for many decades to come.

Prices per sq. m. in popular districts of Moscow

Prices for new builds near metro stations in moscow, new builds in the districts of moscow, new builds near the metro station in moscow.

  • Yantar Apartments
  • sarskaya Square
  • Neva Towers

G Related searches

We use our own cookies and third-party cookies to improve our services and show related advertising. By continuing you accept these cookies.

GEOLN

Site logo

Century 21®: Homes for Sale

Logo

More From Forbes

Strategies for succession in family real estate businesses: safeguarding generational wealth.

  • Share to Facebook
  • Share to Twitter
  • Share to Linkedin

Family Office Executive | Co-Mgr Member Evergreen | Founder Family Office Real Estate Institute | President Harvard Real Estate Alumni Org.

For many families, the foundation of their wealth lies within their real estate businesses, an asset class known for its ability to generate substantial returns over time. Transitioning these businesses to the next generation is often pivotal to continuing the family's legacy and preserving and growing their wealth.

Keys To A Successful Generational Transition

Based on my first-hand experience working with several prominent families in the real estate industry, achieving a smooth transition requires addressing several key areas.

• Transferring Knowledge

The transfer of knowledge is the first significant hurdle to overcome. It's important to ensure that the incoming generation is adequately prepared to navigate the complexities of the real estate market. This preparation often involves a combination of hands-on mentorship and formal education in real estate principles, which can equip your successors with the requisite skills and confidence for leadership.

• Strategic Alignment

Aligning investment strategies across generations is equally important. Given that real estate markets evolve, there might be better strategies moving forward than what worked for one generation. Seek to strike a balance between maintaining the risk-averse, income-generating approaches that have traditionally characterized family real estate investments and embracing more dynamic, growth-oriented opportunities that new market conditions present.

Best High-Yield Savings Accounts Of 2024

Best 5% interest savings accounts of 2024, • unifying the vision.

It's important for there to be a strong unity of vision and mission within the family business, especially one that leverages the unique opportunities within the real estate sector. For instance, your family real estate business might champion sustainable development and legacy building, focus on innovating real estate with technology, foster community and lifestyle, revitalize historic properties or expand access to affordable housing. Whatever the focus, having a unified vision can help ensure that all family members and stakeholders are aligned toward achieving common goals, which can, in turn, reduce potential conflicts, support the business's stability and growth and make a lasting impact on the industry and the communities your business serves.

How To Create A Strong Succession Plan

1. focus on education..

As mentioned earlier, education and training should play a pivotal role in succession planning. There are many ways to provide the next generation with a solid foundation in real estate investment and management principles. Education from family real estate organizations (Full disclosure: My company offers these services, as do others), as well as real-life experiences and mentorship, can form a comprehensive approach to preparing successors for their future roles.

Some best practices I have found over the years for encouraging family members to pursue such education include:

• Ensuring access to educational resources.

• Setting up mentorship opportunities.

• Involving family members in practical projects.

• Promoting networking with other families.

• Celebrating any academic and professional milestones.

One or more of these practices can collectively create an environment conducive to growth and innovation within the family enterprise. I also recommend encouraging the next generation to gain experience outside the family business. This exposure can bring new perspectives, skills and ideas to the business, enriching its strategies and potentially leading to innovation and growth.

2. Ensure clear communication.

To effectively prepare family members for roles in family business and real estate management, it's important to craft a clear, well-communicated succession plan. I recommend that your plan detail the transition process, identify potential successors and define a timeline and criteria for the transfer of leadership and responsibilities. Incorporating elements such as financial and logistical support for educational endeavors, connections with external mentors and early involvement in business operations can also address potential challenges like resistance to change and balancing educational goals with business duties.

Open communication is key, allowing the plan to be adjusted based on individual interests and strengths and fostering a flexible approach that accommodates academic pursuits and practical business experience. This holistic strategy can help ensure that the next generation is well-prepared for leadership, facilitating a smoother transition and the ongoing success of the family business.

3. Create a family governance structure.

Establishing a strong family governance structure is another important element. This structure should define the roles, responsibilities and processes by which the family business is managed and provide a framework for resolving disputes and making decisions. It can help all those involved ensure that the business's and family's values are aligned and that strategic decisions reflect the collective interests of the family members.

In conclusion, transitioning a family real estate business to the next generation is complex but manageable. By focusing on knowledge transfer, strategic alignment, maintaining a unified vision and ensuring comprehensive education and training, your family can secure their legacy and continue to grow their wealth through real estate across generations.

Forbes Business Council is the foremost growth and networking organization for business owners and leaders. Do I qualify?

DJ Van Keuren

  • Editorial Standards
  • Reprints & Permissions

Adam Neumann opens up about his billion-dollar plan to transform apartment living and explains why he wants to buy back WeWork

  • Former WeWork CEO Adam Neumann started a new company, Flow, to transform apartment living.
  • After more than a year of secrecy, Flow launched two apartment buildings in South Florida.
  • Neumann addresses whether Flow is a tech company and why he wants to buy WeWork.

Insider Today

In August 2022, former WeWork CEO Adam Neumann announced he was back, starting a new company named Flow to transform apartment living. Andreessen Horowitz, one of Silicon Valley's most prestigious venture firms, invested $350 million, its single largest investment ever , which instantly made Flow worth a billion dollars on paper.

Late last year, I was the first reporter to tour Flow's first residential building in Fort Lauderdale, Florida. I spoke with residents and staff, but my many requests to speak on the record with Neumann himself were always rebuffed.

But then, on Thursday, Neumann finally agreed to take my call.

He was calling me from the official opening of Flow, which after more than a year and a half of operating in secrecy, is now launching two apartment buildings in South Florida and a new website.

Whatever happens with Flow, Neumann will always be remembered for WeWork, which he resigned from in 2019. The launch occurs as Neumann is trying to buy back his bankrupt former company for more than $500 million.

In a print exclusive, we spoke about Neumann's WeWork bid, how it would fit in with Flow, and what he learned from his time at the company, something that made him one of the most talked-about and controversial CEOs of the past decade. This interview has been lightly edited and condensed for clarity.

I think people are skeptical of how Flow is a tech company. What's your response?

The official answer would be Flow as an experience-first residential-real-estate company. You are leveraging tech as one of the things that you're doing to bring people together and encourage community. So, for example, you are rebuilding the backend, literally rebuilding the backend systems that run the buildings. You're building a native app so everything can work perfectly.

But it's not that we need to define ourself as this kind of company or that kind of company. We love being a real-estate company. We're leveraging tech. We're also the only real-estate company of this manner that I'm aware of that builds its own technology.

You said last year that Flow would either partner or compete with WeWork. Right now, it seems like you would prefer to partner?

In the new hybrid world, working and living are very correlated. So we're focused on living, but we have a coworking space. I can't say too much because [WeWork] is in the midst of the bankruptcy right now, but we're having positive discussions with multiple stakeholders, and for now, that's where we're at. And our partners are very, very large and best-in-class institutional investors. It's not just us.

Related stories

Are you able to share any of the partners?

Because it's in the midst of the process, I don't want to create any challenges just because discussions seem to be positive. But what I will tell you is the company is aware of each one of their names.

What's the likelihood you think you'll be successful at acquiring WeWork?

I can't share more, but what I can tell you is the future of living has working integrated into it, and this is something we understand a lot. And another thing I'll say that connects to what you asked before is part of the lessons of what we learned from the past. We obviously learned a lot about, we built a global brand, we helped redefine a category with an amazing group of people that helped lead this thing and everything with around community.

So you take all those thoughts, you bring them back into Flow, you take the lessons learned, you apply them, you bring better partners, you recruit the best talents in the world, you take your time on delivering a great product, and it's really going to be headed in the right direction.

When I visited, I thought Flow seemed better situated for the future because it's post-pandemic [with people working at home], whereas WeWork seems pre-pandemic [when people were still going into offices]. So I was a little surprised that you even still needed WeWork?

Work is part of living, and I don't know if we need or don't need anything, but whatever it is that I'm doing, I'm going to do through Flow, and I'll do whatever is best for Flow.

It's been more than a year and a half since you announced this company. You've been taking your time, as opposed to WeWork, where everything moved very fast. Why did you want to move more slowly and behind the scenes this time?

Part of what is nice about doing a venture for the second time is you get to take the best things you did last time and do them again. But you also get to take lessons and learn. One of [the lessons] is when you have a product you're really passionate about, it's a great thing to take your time and really perfect it.

How have you been spending your time personally with Flow, and how do you see the CEO role differently this time, having been through the whole WeWork experience?

As I said before, we're taking the things that were great, but then we're also taking lessons. I have a different set of partners. I think Mark [Andreessen] and Ben [Horowitz] are unique investors separate from how great they are as venture capitalists. They're both entrepreneurs. So I get to sit in the boardroom with both of them, and we have real discussions. They helped me personally choose the CTO and the leader in product, and they helped us with a lot of the different things we did to make sure we have world-class talent.

What does Flow look like to you in five years?

Flow is multiple things. We're a vertically integrated company. We build our own technology, we built our own property management from scratch. We own the buildings, and on the tech side, we build the app, we build a backend, we build a website. And in our new app, our payment system is fully integrated.

There's a lot of things that are going on, which means Flow in five years has a tremendous amount of potential to go in many different ways. Right now, we're still focusing on learning, testing, and seeing what works. Of our current two buildings, the one in Fort Lauderdale is 95% full, and the one in Miami is 96% full, and there's a lot more coming soon.

Watch: AI has the power to transform everything from workflows to entire companies, but a safe and ethical approach is needed to unlock it

real estate crowdfunding business plan

  • Main content

U.S. sanctions fundraisers for extremist West Bank settlers who commit violence against Palestinians

The U.S. Treasury Department building.

  • Show more sharing options
  • Copy Link URL Copied!

The Biden administration on Friday imposed sanctions on two entities accused of fundraising for extremist Israel settlers , as well as the founder of an organization whose members regularly assault Palestinians.

The Treasury Department announcement comes as the West Bank has seen some of the worst violence perpetrated by extremist settlers against Palestinians since the war began in the Gaza Strip.

There is also friction between President Biden and Israeli Prime Minister Benjamin Netanyahu, whose far-right government has reacted angrily to previous sanctions imposed against West Bank settlers.

Included in Friday’s sanctions are two entities — Mount Hebron Fund and Shlom Asiraich — accused of raising funds for sanctioned settlers Yinon Levi and David Chai Chasdai. Both men were previously sanctioned by the Biden administration for violently attacking Palestinians in the West Bank.

EREZ CROSSING, ISRAEL -- FEBRUARY 29, 2024: Several Right wing activists and Jewish settlers celebrate and clutch strawberries after breaching into Gaza and got apprehended by Israeli forces as many more arrive to demonstrate at the Gaza border at Erez Crossing, Israel, Thursday, Feb. 29, 2024. About a hundred Israelis stormed Erez Crossing at the northern tip of Gaza an attempt to re-establish Jewish settlements in the Strip since the war began. A few demonstrators managed to breach into Gaza on foot by several hundred meters getting apprehended by Israeli soldiers. They returned to the border clutching strawberries and were celebrated. At least 2 dozen more entered the military buffer zone between Israel and Gaza carrying construction material and building. They built two symbolic OoutpostO and demonstrated next to it for several hours without any interference from Israeli forces.(MARCUS YAM / LOS ANGELES TIMES)

World & Nation

Israel’s religious right has a clear plan for Gaza: ‘We are occupying, deporting and settling’

Religious Zionists, most believing in a divine right to govern, now have outsize influence in Israel. The war in the Gaza Strip is energizing their settlement push.

March 13, 2024

The penalties aim to block them from using the U.S. financial system and bar American citizens from dealing with them.

The fundraising campaigns established by Mount Hebron Fund for Levi and by Shlom Asiraich for Chasdai generated the equivalent of $140,000 and $31,000, respectively, according to the U.S. Treasury.

Mount Hebron Fund is linked to the regional council in the area, a body that receives state money. Friday’s order stopped short of sanctioning the council itself.

Shlom Asiraich raises money for imprisoned Jewish extremists.

Rights groups say the expansion of illegal settler outposts in the West Bank is enthusiastically supported by the regional councils and nudged along by Israel’s national government — the most far-right in the country’s history.

The Biden order also skirted sanctioning crowdfunding websites on which funds were raised: GiveChak and New York-based Charidy.

Palestinian leader Mahmoud Abbas at a leadership meeting in the West Bank city of Ramallah on Tuesday.

U.S. blocks full U.N. membership for Palestinians

The United States vetoes the latest Palestinian bid for full membership in the United Nations.

April 18, 2024

Both online fundraisers have been taken down. But at least one fundraiser linked to a settler who was previously sanctioned by the Biden administration, Moshe Sharvit, remains online. As of Friday, the page on GiveChak had raised the equivalent of more than $879,000.

Additionally, the State Department is sanctioning Ben-Zion Gopstein, the founder and leader of Lehava, an organization whose members have assaulted Palestinian civilians.

Deputy Treasury Secretary Wally Adeyemo said the organizations “undermine the peace, security and stability of the West Bank. We will continue to use our tools to hold those responsible accountable.”

In February, Biden issued an executive order that targets Israeli settlers in the West Bank who have been accused of attacking Palestinians and Israeli peace activists in the occupied territory.

Hussein and Frankel write for the Associated Press.

More to Read

FILE - The U.S. Treasury Department building, June 6, 2019, in Washington. The U.S. and U.K. on Thursday imposed a new round of sanctions on Iran as concern grows that Tehran’s unprecedented attack on Israel could fuel a wider war in the Middle East. (AP Photo/Patrick Semansky, File)

U.S. and U.K. issue new sanctions on Iran in response to Tehran’s attack on Israel

Smoke fills the sky after Israeli settlers set fire to the properties of Palestinian villagers in the West Bank village of al-Mughayyir, Saturday, April 13, 2024. Israel's army says the body of a missing Israeli teen has been found in the occupied West Bank after he was killed in a "terrorist attack." The disappearance of 14-year-old Binyamin Achimair sparked a large attack by settlers on the Palestinian village on Friday and Saturday. (AP Photo/Nasser Nasser)

West Bank sees biggest settler rampage since war in Gaza began as Israeli teen’s body is found

April 13, 2024

A woman washes pots outside a tent pitched by a destroyed building in Rafah in the southern Gaza Strip on April 5, 2024 amid the ongoing conflict in the Palestinian territory between Israel and the militant group Hamas. (Photo by MOHAMMED ABED / AFP) (Photo by MOHAMMED ABED/AFP via Getty Images)

Calmes: Biden had words with Bibi over Israel’s apocalyptic Gaza war. Only action will do

April 5, 2024

Start your day right

Sign up for Essential California for news, features and recommendations from the L.A. Times and beyond in your inbox six days a week.

You may occasionally receive promotional content from the Los Angeles Times.

More From the Los Angeles Times

A Palestinian youth mourns his relative killed in the Israeli bombardment of the Gaza Strip, at the morgue of the Kuwaiti Hospital in Rafah refugee camp, southern Gaza Strip, early Saturday, April 20, 2024. (AP Photo/Ismael Abu Dayyah)

Israeli airstrike in Gaza’s south kills at least 9 Palestinians, including 6 children

FILE - Speaker of the House Mike Johnson, R-La., talks to reporters at the Capitol in Washington, April 19, 2024. Johnson, putting his job on the line, relied on Democratic support this week to bring to the House floor a series of three votes on $95 billion in foreign aid for Ukraine, Israel and other U.S. allies, as well as a fourth on several other foreign policy proposals. Since President Joe Biden made the funding request in October, the Republican-controlled House has always loomed as the largest obstacle to final passage. (AP Photo/J. Scott Applewhite, File)

The House passes billions in aid for Ukraine and Israel after months of struggle

April 20, 2024

Director Jon M. Chu is photographed at home in Calabasas on Friday, May 28, 2021

USC cancels appearance by director Jon Chu, others amid valedictorian controversy

April 19, 2024

U.S. Secretary of State Antony Blinken meets the journalists during a press conference at the G7 Foreign Ministers meeting on Capri Island, Italy, Friday, April 19, 2024. (AP Photo/Gregorio Borgia)

Israel gave U.S. last-minute warning about drone attack on Iran, Italy’s foreign minister says at G7

IMAGES

  1. What is Real Estate Crowdfunding And How Does It Work?

    real estate crowdfunding business plan

  2. Real Estate Crowdfunding: What is it and How It Works?

    real estate crowdfunding business plan

  3. How does real estate crowdfunding work?

    real estate crowdfunding business plan

  4. How to Start a Real Estate Crowdfunding Platform like Fundrise [2023

    real estate crowdfunding business plan

  5. Real Estate Crowdinvesting Business Overview

    real estate crowdfunding business plan

  6. Real Estate Crowdfunding: What Is It, How Does It Work, & Investing

    real estate crowdfunding business plan

VIDEO

  1. Analyser un bilan de projet de crowdfunding : pourquoi et comment ?

  2. REAL Estate Business Plan As A Youth

  3. Real Estate Crowdfunding: Limited Capital Success

  4. How Real Estate Crowdfunding has Restored the Faith of Investors

  5. The Importance of Crowdfunding Business Consultants

  6. Real Estate for DUMMIES: Make an extra $4,000 a Month!

COMMENTS

  1. How to Start a Real Estate Crowdfunding Platform in 2024

    Any crowdfunding business founder can request a license from the "European Enterprise Crowdfunding Service Provider" (ECSP) Max amount for a crowdfunding deal is limited to €5 million over 12 months. A platform founder will have to apply for authorization to a national competent authority in a country of registration.

  2. Best Real Estate Crowdfunding Platforms Of April 2024

    Yieldstreet. Learn More. On Yieldstreet's Website. An online platform that makes it easy to invest in alternative investments. Private Credit, Structured Notes, Real Estate, Art, Legal Finance and ...

  3. Best Real Estate Crowdfunding Platforms for April 2024

    Best Real Estate Crowdfunding Platforms for April 2024. Fundrise is the best overall real estate crowdfunding platform due to its high level of transparency, low costs, excellent account services ...

  4. How To Write a Business Plan for Real Estate Crowdfunding in 9 Steps

    Welcome to our blog post on how to write a business plan for real estate crowdfunding in 9 steps! Real estate crowdfunding has quickly become one of the most popular investment models in the US, with a projected growth rate of 25.7% between 2021 and 2026. This innovative business model allows accredited investors to connect with real estate developers, providing them access to a wider pool of ...

  5. A Beginner's Guide To Real Estate Crowdfunding

    If your annual income is greater than $107,000, you can invest up to 10% of your income or a maximum investment no greater than $107,000. 2. Uncertainty. One of the biggest challenges that you will face when recruiting investors for your crowdfunded deal is that investors may be unfamiliar with you or your business.

  6. The Complete Guide to Real Estate Crowdfunding

    To fully understand the impact of real estate crowdfunding, consider the following statistics compiled by CFX Investing: Between 2012 and 2015, real estate crowdfunding portals grew 12 times, to $34.4 billion. The crowdfunding industry is projected to grow to more than $300 billion by 2025. Title III and Regulation A+ is projected to take the ...

  7. Real Estate Crowdfunding: 7 Platforms for Passive Investing

    Real estate crowdfunding platforms allow investors to pool their money with others to invest in real estate and earn returns. With an expected industry growth rate of 16% CAGR from 2023 to 2030, this form of investing is gaining momentum. In real estate crowdfunding, a group of investors each contributes money to finance a real estate project ...

  8. How to Start a Real Estate Crowdfunding Platform

    EquityMultiple. EquityMultiple is a commercial real estate crowdfunding platform with $131 million assets under management and over $1 billion total deal value, according to the InvestorJunkie. EquityMultiple is focused on individual, accredited, investors since the very beginning. With a minimum deal target of $500,000 and a minimum investment ...

  9. The Definitive Guide to Real Estate Crowdfunding

    The Definitive Guide to Real Estate Crowdfunding. J. McBride. January 3, 2023. You've seen the news headlines about real estate crowdfunding and how it is changing the commercial real estate industry. In this article we'll cover real estate crowdfunding in depth and give you a solid overview of what is possible with crowdfunding real estate ...

  10. Real Estate Crowdfunding: How It Works And 7 Platforms to Consider

    3. Fundrise. Fundrise allows everyday investors to start investing in the real estate sector with as little as $10. The company focuses on providing investments that contain high-quality assets, including debt and equity investments in commercial, residential, and other types of real estate.

  11. How to Start a Real Estate Crowdfunding Platform

    Concreit. Concreit is an online platform that lets users invest in real estate for as little as $1.The company empowers people, regardless of their income, to benefit from real estate investment opportunities that were once possible for wealthy individuals only. The platform makes profits by charging a 1% fee for investment portfolio management.

  12. Guide to Real Estate Crowdfunding and Best Platforms

    RealCrowd is a crowdfunding platform for accredited investors seeking to invest in commercial real estate assets and funds. RealCrowd acts as the middleman between sponsors and investors. It earns its revenue based on the fees charged to the sponsors (investors pay no fees).

  13. 4 Best Real Estate Crowdfunding Investment Platforms of April 2024

    NerdWallet's Best Real Estate Crowdfunding Investment Platforms of April 2024. Yieldstreet: Best for Nonaccredited Investors. EquityMultiple: Best for Accredited Investors. RealtyMogul: Best for ...

  14. How to Start a Real Estate Crowdfunding Business

    Get the Right Technology in Place…. 3. Build Up Your Investor List. 4. Secure Funding For Your Venture. Know Your Business and Industry. 1. Decide on What You're Selling! There are many financial products that are offered within the context of real estate crowdfunding.

  15. Learn How Crowdfunding for Real Estate Works

    Updated October 1, 2021. Real estate crowdfunding is the process of getting a pool of investors to raise capital for a real estate project. It's a way for real estate investors who are short on cash to obtain funding. Then they can pursue flipping a house, buying a rental property, or anything else in real estate.

  16. How to Build a Solid Real Estate Crowdfunding Marketing Plan

    So start with one, and work your way up as you see progress. Your goals should be both short and long-term. Focus on what you want to see of your business today, a year from now, and even five years later, and determine how your marketing efforts fit into the picture. Make sure each goal is SMART or: Specific.

  17. How to Use Crowdfunding to Invest in Real Estate

    Crowdfunding also is a popular way to raise equity outside of the real estate market. It can be used to raise capital for startup businesses, art projects and nonprofit causes. Crowdfunding is ...

  18. Real Estate Crowdfunding: A Beginner's Guide to Investing in Property

    Blog Learn from the latest how-tos, reviews, insights and more!; FREE Workshop Learn How to 10X Your Income As a Land Investor!; Podcast Hear about profitable investing strategies and success stories.; Land Investing Action Plan Solve the 5 Mistakes that Keep Investors Stuck; Terms Library Develop your business acumen as a real estate investor.; Store. Courses Individual courses to help you ...

  19. PDF Real Estate Crowdfunding

    The theory may have some validity, crowdfunding is a significant business model in today's economy. ... number of real estate crowdfunding platforms went from 10 in 2013 to 75 by January of 2015. Another estimate is that there are over 100 self-described real estate crowdfunding sites (although the author of that piece notes that ...

  20. ‎Real Estate Imagined Small Business Podcast on Apple Podcasts

    Real Estate Imagined is your hub for property management and small business insights. The hosts, Heather and Wade, have 5+ combined years of experience in real estate including land stewarding and a major AirBnB fail that you can hear all about in Episode 1, releasing April 4, 2024.

  21. What Factors Drive the Success of Real Estate Developments?

    Real estate development is a complex and multifaceted industry that requires strategic planning, market research, and effective execution to succeed. In this blog post, we will discuss the key factors that contribute to the success of real estate developments, offering insights into the various aspects that developers should consider for a successful project. 1. Location […]

  22. Seven Questions To Ask Before Investing In A Private Real Estate Deal

    What To Ask Your Potential Real Estate Sponsor. 1. What's the sponsor's track record? It sounds simple enough, and it is. But it's amazing how many firms squirm when you ask them to detail ...

  23. About Kalinka Group

    Luxury real estate in Russia, Europe, Asia and Middle East for a comfortable life and profitable investment. ... Securing our sales plan; Creation of a sales office; Product training for brokers; ... Kalinka is in the TOP-3 in terms of citation in the media in the elite real estate market and in the TOP-5 of business class and investment ...

  24. New builds in Moscow for Sale

    Moscow is interesting for investors, the real estate market is huge, including new builds. The headquarters of most large companies (Russian, transnational), more than half of the central offices of Russian banks, instrument-making, mechanical engineering, metallurgical, light, chemical and food industries are located in Moscow.

  25. Best Real Estate Deals 2024: Transformation of the Year

    By Sam Raudins - Reporter, Albany Business Review Apr 19, 2024 F lach Development & Realty Inc. had a four-phase, roughly $15 million plan for redeveloping the Coxsackie waterfront.

  26. Homes for Sale

    Search for real estate and find real estate listings. Homes for Sale | Century 21®. Get details of properties and view photos. Connect to real estate Agents on Century 21®

  27. Strategies For Succession In Family Real Estate Businesses

    To effectively prepare family members for roles in family business and real estate management, it's important to craft a clear, well-communicated succession plan.

  28. Adam Neumann opens up about his billion-dollar plan to transform

    In August 2022, former WeWork CEO Adam Neumann announced he was back, starting a new company named Flow to transform apartment living. Andreessen Horowitz, one of Silicon Valley's most prestigious ...

  29. Record-High Vacancies Give Business Owners Leverage in Rent

    Delinquencies are now nearing the 10 percent mark, and default rates rose to 43.2 percent of total commercial real estate debt that matured during the first two months of 2024.

  30. U.S. sanctions fundraisers for West Bank settlers who attacked

    The Biden administration is imposing sanctions on entities accused of fundraising for extremist Israeli West Bank settlers who attacked Palestinians.