“Shin,” of Money is not Taboo
For years I’ve heard that real estate investments are an awesome way to diversify one’s portfolio and provide for passive income. Of course, through most of that time, I hadn’t personally experienced the benefits.
That changed this year when our rental house went self-supporting. Our first home has been a rental house since we moved out in 2006. My wife and I decided to move 300+ miles South, out on some family land. We left the two kids as renters.
At that time the house wasn’t paid off, and we were charging a discounted rent amount, so we had to put money in to cover all the property taxes and mortgage payment. The mortgage was paid off last year and this year we bumped the rent up a bit. It’s still a bit lower than market value, but the house is now making money.
With that bit of success, I’ve been thinking of how I can increase my real estate holdings. Now I don’t have the money to just go and another rental property, so I’ll have to look at other options.
Crowd-funded real estate investing has come to my attention and I plan to explore it, to see if it’s a viable option.
So, what is Crowd Funded Real Estate Investing, or Real Estate Group Investing?
From what I gather, it’s similar to investing in Mutual Funds. Investors buy into fund pools and the pools are used to invest in real estate. Interesting!
According to the Huffington Post article, Real Estate Investing Is No Longer A Private Club, “Crowdfinancing pools money from a group of investors via the internet and social media. It provides access to money beyond the traditional debt and equity products that are funded primarily by institutions.”
This strategy reminds me of investment clubs that I heard of years ago, and it looks like this is a viable option for real estate investing when you don’t have a big chunk of cash to do it on your own.
So, where can one invest in such a group?
Here’s a handful that a quick Google search returned:
- FundRise – “Fundrise offers the first low-fee diversified real estate investment available directly to anyone online. We make the process of investing in the highest quality commercial real estate from around the country simple, efficient, and transparent.”
- Lending Home – “Get access to high yield mortgage products with returns averaging 10%. We source creditworthy real estate professionals looking for short-term mortgages of 12 months or less to purchase and rehabilitate homes.”
- InfoBrij – “Since 2012, the growth of crowdfunding for commercial real estate has been staggering. The advent of crowdfunding has opened up potential investment opportunities to accredited investors everywhere looking to take advantage of the rates of return that commercial real estate (CRE) can provide.”
- Reality Shares – “Founded in 2012, Reality Shares was created to serve a range of investors who weren’t getting what they needed from traditional investment products. We saw institutional investors enjoy success in the markets with sophisticated strategies, which offered exposure to long-term corporate growth while also managing volatility and risk. We believed these strategies had much wider potential, and yet most investors had no access to them.”
- Realty Mogul – “RealtyMogul.com launched in 2013 with one mission: simplify real estate investing by connecting real estate entrepreneurs and investors through cutting-edge technology. Today we are a leading online real estate capital marketplace – one that offers commercial equity and commercial debt products nationwide, educates our investors, and changes the way real estate investing and financing is viewed forever.”
That’s just a few of the options that I found. I haven’t delved into them deaply yet, but I plan to. Since Mutual Funds have panned out over the years, I think that this is a vehical worth looking into.
From what I’ve seen briefly of the numbers, real estate investing in this manner looks promising.
Okay, so I haven’t shared much useful info, but I do plan to explore this topic. Since I’m making a little coin with freelance writing, and the rent house is now turning a profit, I want to put some money into investments other than my usual mutual funds.
So, stay tuned to see what I uncover.
Oh, if you’re into crowd-funded, or group real estate investing, let us know how you’re doing and what you think.
This is fantastic – thank you for sharing the information. Crowd funding – what a great solution for the rest of us!
Definitely something to look into. Glad you popped in. I’ll be keeping up with your site, too.