Investments may be sound, low-risk or even a near-lock, but there’s no such thing as a guarantee. There are a world of known and unknown factors that can significantly influence any investment, especially when it comes to real estate.
Such risk, as well as steep financial barriers, make real estate crowdfunding an increasingly popular way to invest, own property and yield potential returns. But just how safe is it?
What is real estate crowdfunding?
Real estate crowdfunding brings together many people to invest in a particular property, spreading the cost among a group of individuals instead of one or two persons.
Real estate crowdfunding benefits
- Known property. Crowdfunding with addy can offer an alternative to a real estate investment trust, or REIT, where investments are made on behalf of – but unknown to – members. addy is not a REIT: members know the actual property, from the specific address to everything about the neighborhood. If you live in or are visiting the area, you can even go take a peek in person.
- Low liability. One of the main attractions of crowdfunding real estate is the liability, or relative lack thereof. The only liability an addy member takes on is their investment, which can be as low as $1.
- Match your goals. With crowdfunding, you can find a property that matches your budget, goals and risk appetite. addy members aren’t required to invest in a particular property. Instead, they can peruse options to find the exact opportunity that matches their needs and desires.
Real estate crowdfunding risks
- Control. There is a detailed plan proposed on any given property, however execution of that plan, and how the plan adapts to any hiccups along the way, are not up to crowdfunding investors. addy members need to trust the team of experts to see it through to the end.
- Access to funds. Once you invest, your money is essentially inaccessible until the point in the plan where returns can begin. You cannot buy and sell shares and liquidate as desired.
- Timeline. Projections are made in an offering memorandum as to when each step of a potential plan will be put in place, and what possible returns will be. However, these are just estimates, and any number of factors can influence that timetable.
addy does not offer financial or investment advice or guidance. addy members should consult industry experts and professionals in order to achieve their investment goals.
Not all real estate crowdfunding platforms are the same; some companies don’t even like the phrase “crowdfunding” despite noticeable similarities. For example, every dollar invested in a property with addy goes to that property – there are no fees, hidden or otherwise, to deal with.
What’s more, addy is accessible to all of age regardless of their financial history and personal background. While addy offers a membership tier to accredited investors, you don’t need experience in investment to join the addy community. You can join as a Charter member for only $25 for one year.
Is real estate crowdfunding safe for me?
There are any number of risks associated with crowdfunding real estate, and potential investors should accurately identify the possible setbacks and concerns ahead of time. However, the limited liability it affords, and the low investment minimum that addy in particular allows, make crowdfunding a popular choice, especially for younger investors seeking a viable path into the real estate market.
addy believes in real estate for everyone; your crowdfunding investment can begin today.