Real Estate Crowdfunding (best option for those getting started?)

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This topic contains 1 reply, has 2 voices, and was last updated by  Andrew Savikas 6 months, 1 week ago.

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  • #3888

    Luke Thomas
    Participant

    @andrew – I really enjoyed the recent post outlining the variety of crowdfunding platforms (and reasoning behind the picks) . Of the real estate “platforms” listed in your post, what’s your top choice?

    Based on what you wrote it sounds like your strategy has changed a bit over time. I’m curious as to what you recommend at this moment in time?

    #3889

    Andrew Savikas
    Keymaster

    @lukethomas Thanks! (And welcome!)

    Those are great questions, and of course I should start with the disclaimer that I’m not a financial advisor, so this is just my opinion based on my personal experience. And even though I’ve learned a lot over the past year about crowdfunding and real estate investing, I’ve also learned that there’s a lot more to learn.

    That said, I can see two main places for real estate crowdfunding in my portfolio, the first is for relatively low risk, relatively high-yield secured debt, especially over a short period of time (2 years or less). But as I described in Baby Steps: Getting Started with Crowdfunded Real Estate, I don’t think it would make sense for me to try and pick individual notes to invest in. For that kind of investment, if I were allocating money today I’d probably use AlphaFlow’s managed portfolio feature, which spreads a $10,000 investment across 75+ loans, and across multiple geographies.

    I do also like getting some exposure to equity upside from real estate, and for that a lot of it depends on whether you’re an accredited investor, what your time horizon is, and how much you’re looking to invest. If I was trying to find a place to put, say, $1,000, then one of the REIT-style offerings from RealtyMogul, Fundrise, or RichUncles would be worth checking out. Some of them have fees that are on the high side, and in most cases there’s penalties for trying to get money out unless you keep invested for 3-5 years, but it’s a low entry point to get a reasonable amount of diversification. Ian Ippolito has a nice comparison of those three platforms in particular over on his site that you might find helpful as well.

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