For years, real estate investors have had to look for affordable properties, such as foreclosed houses, or found creative means to finance their next real estate purchase. Now, those traditional methods may have changed, thanks in part to the Internet and the rapidly-expanding trend of crowdfunding.
Many people may have heard of this, but perhaps not everyone understands exactly what it means. For starters, crowdfunding is defined as raising capital for a project or venture in small amounts from a large number of people. This is often done online, via several popular websites. In today's climate, that concept may have spilled over into the real estate market.
Why crowdfunding is important
Many real estate investors may be asking themselves: why should I care about crowdfunding? The answer is relatively simple - because this new trend is actually an old one, given new life by technology. And, odds are it is here to stay.
According to Teke Wiggin, staff writer for Inman News, professionals have transferred funds for decades from investors to real estate ventures in order to buy properties. Nowadays, crowdfunding has the potential to reshape the industry as a whole, and every investor - even if they don't want to get on board - should pay attention to this important aspect.
Overall, real estate crowdfunding is a way to provide more opportunities for more professionals, Wiggin explained. Recent regulation changes by the Securities and Exchange Commission now allows general solicitation for private offerings, which means crowdfunders can chase those investments. Most importantly, though, these professionals have to be transparent. In order to comply with all government stipulations, reporting about finances has to be top-notch. This is easier with a more open business policy. If it all goes to plan, this method will connect those with capital to those with the drive to buy, build and develop real estate.
Before crowdfunding, real estate investors have to understand the market completely. Courthouse Retrieval System can help, with a comprehensive collection of mortgage records, property data and much more.
Crowdfunding can open more doors
For any real estate investor, finding the time and money to expand their business can be a complicated task. Crowdfunding can simplify that, both for the people looking to back real estate transactions or purchase properties to fix up and sell themselves.
Recently, Nav Athwal, CEO of RealtyShares, shared some insights to Rod Ebrahimi, contributor to Forbes magazine, about the concept. Athwal explained that crowdfunding can make the complications of traditional real estate investing go away. This method sheds more light on the process behind the scenes, and it allows professionals to get more done simply by sitting on the couch and browsing listings or other investment opportunities.
He further noted that while real estate has been slow to adapt new technology, this is one trend that could pick up steam quickly. That could lead to a more efficient process, and added choices for real estate investors looking for the next great deal.