Real estate crowdfunding may seem like a foreign concept, but it is actually very common. In order for an investor to support a real estate project, he must first decide whether the project will be profitable.
If the return on investment is expected to be high enough, then he should invest in what he believes will be a successful business venture.
There are several types of real estate crowdfunding that you can find online: the two most important ones are debt and equity crowdfunding.
Debt and equity financing comes from two sources: banks or non-bank lenders, who are willing to fund projects based on a specific set of criteria that they believe will make them profitable.
This type of loan can come with interest rates as low as one percent per year and require only 10% down payment.
Private sales involve investors coming together through platforms such as Fundrise, RealtyMogul and CircleUp to buy distressed properties at steep discounts via online bidding wars without having any prior knowledge about it.
