Figure this would be a good place to ask for opinions on Real Estate crowdfunding. I'm sure people here have seen advertising for these sites while searching projects, real estate, etc. Anyone with first hand experience? It seems risky but more practical for those(like me) who daydream about buying a house/building, fixing it up and selling for big $$.

 

I relied on therealestatecrowdfundingreview.com for most of my info. A law was passed in 2013, "...JOBS act that legalized crowd investing real estate. Crowd investors pool their money into a single investment, which dramatically lowers the price of entry."

 

I've sign up for Realtyshares but haven't made an investment yet. A Cincinnati home was just added. Usually they offer a buy in for 6 or 12 month loans, some longer. Min invest. of $2K to $5K. Earn from 8% to 14% interest.

https://goo.gl/RvuK12

Figure this would be a good place to ask for opinions on Real Estate crowdfunding. I'm sure people here have seen advertising for these sites while searching projects, real estate, etc. Anyone with first hand experience? It seems risky but more practical for those(like me) who daydream about buying a house/building, fixing it up and selling for big $$.

 

I relied on therealestatecrowdfundingreview.com for most of my info. A law was passed in 2013, "...JOBS act that legalized crowd investing real estate. Crowd investors pool their money into a single investment, which dramatically lowers the price of entry."

 

I've sign up for Realtyshares but haven't made an investment yet. A Cincinnati home was just added. Usually they offer a buy in for 6 or 12 month loans, some longer. Min invest. of $2K to $5K. Earn from 8% to 14% interest.

https://goo.gl/RvuK12

 

I am very fascinated with the concept of real estate crowdfunding.  As far as I know, the biggest player is Fundrise.  The thing is, you have to be an accredited investor to invest, which I most certainly am not.  Below is the definition from Fundrise.  I did however invest in an eReit that Fundrise started where you don't have to be accredited.  I just put a small amount to test the waters and it pays out quarterly.  I've gotten about 10% annualized on it YTD so far I think, so I'll definitely consider investing more.  My only complaint is they don't let you reinvest your return.

 

There was a Cleveland startup called Vestor, but I haven't heard anything from them in a while, so I think maybe they aren't around anymore.

 

From Fundrise website

An accredited investor is a term used by the U.S. Securities and Exchange Commission (SEC) under Rule 501 of Regulation D. In order to qualify as accredited, an investor must accomplish at least one of the following:

- Earn an individual income of more than $200,000 per year, or a joint spousal income of more than $300,000 per year, in each of the last two years and expect to reasonably maintain the same level of income.

- Have a net worth exceeding $1 million, either individually or jointly with his or her spouse.

- Be a bank, insurance company, registered investment company, business development company, or small business investment company.

- Be a general partner, executive officer, director or a related combination thereof for the issuer of a security being offered.

- Be a business in which all the equity owners are accredited investors.

- Be an employee benefit plan, a trust, charitable organization, partnership, or company with total assets in excess of $5 million.

The accreditation part of crowdfunding really is contradictory to the concept.  The whole “you can invest with as little as $1,000 or $5,000” doesn’t really matter as if you are accredited, you can likely invest a lot more than these low amounts and those of us who would be interested in investing at the amounts are not accredited.  This is required by the SEC though.

 

One way around this perhaps (and I’m no attorney) would just be to create an LLC with investors as limited partners, but that can be a headache as you’d likely have to create an LLC for each property. 

 

I agree accreditation is a big hang up for most people to use these sites. But I'm under the impression the accreditation minimums can/will be lowered in the future.

I was under the impression that the accreditation required has already been removed.