6 things you should know before you try crowdfunding

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Crowdfunding is rapidly becoming a popular
trend, and is being used to fund everything from
art shows to niche products.

Commercial real estate investors and
developers are also joining in, lured by the
possibility of investing or funding a property that
would have been otherwise attainable.

But does crowdfunding really make it easier to
invest, or does it just open up the door to
unscrupulous developers to make a quick buck?

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6 things you should know before you try crowdfunding

  1. 1. 6 Must Know6 Must Know6 Must Know6 Must Know TipsTipsTipsTips About Crowdfunding InAbout Crowdfunding InAbout Crowdfunding InAbout Crowdfunding In Commercial Real EstateCommercial Real EstateCommercial Real EstateCommercial Real Estate
  2. 2. Is Crowdfunding Safe? 5 Things You Should Know Before You Try Crowdfunding Crowdfunding is rapidly becoming a popular trend, and is being used to fund everything from art shows to niche products. Commercial real estate investors and developers are also joining in, lured by the possibility of investing or funding a property that would have been otherwise attainable. But does crowdfunding really make it easier to invest, or does it just open up the door to unscrupulous developers to make a quick buck?
  3. 3. 1 Minimal Investment 5 Things You Should Know Before You Try Crowdfunding To be sure, crowdfunding has several advantges that make it appeal to investors, particularly newer ones. One of the most obvious is the minimal investment required in order to get started. Commercial income properties that can be bought for as little as $1,000 make it easy for even the cash-strapped to start making money.
  4. 4. 2 Rely On Other's Expertise 5 Things You Should Know Before You Try Crowdfunding Crowdfunding allows investors to rely on the executive team's expertise and judgement in order to vet properties. That means that newbies can skip the learning curve and go straight to raking in a passive income.
  5. 5. 3 Complete Transparency 5 Things You Should Know Before You Try Crowdfunding Due to its nature, crowdfunding portals are transparent, allowing all participants to see the status of any campaign, as well as their investments, at any time. Plus, since everything is online, it's easy to get real-time information on how a particular property is doing, down to the last data point.
  6. 6. 4 Choose Your Property 5 Things You Should Know Before You Try Crowdfunding Unlike REIT's, you can choose which property you'd like to invest in, as well as choose to invest in debt and equity deals. You're also not limited in terms of geography - the commercial income property can be anywhere you choose- and you can pick which asset class.
  7. 7. 1 Disadvantages 5 Things You Should Know Before You Try Crowdfunding Even though you may have purchased a percentage of a property, you don't have voting rights on how to handle the investment. You will also have no influence in decisions regarding property management. So if you're unhappy with the way things are run, there won't be very much you can do to change things.
  8. 8. 2 Dilution of Profits 5 Things You Should Know Before You Try Crowdfunding If future capital is needed and therefore new investors recruited, your profits may be so diluted that it becomes impossible to make a meaningful profit. In such a case, it is likely that crowdfunding was chosen as a last resort funding initiative.
  9. 9. 3 Equity Shares a Risk 5 Things You Should Know Before You Try Crowdfunding Investors who choose to invest in equity shares might be stuck holding them for an indefinite period of time. That's because at the present time there is no secondary market for this kind of securities.
  10. 10. * The Bottom Line 5 Things You Should Know Before You Try Crowdfunding Crowdfunding might be a great way for new investors to get started in commercial real estate. However, it doesn't exempt you from making sure you are thoroughly knowledgeable about commercial real estate. You still need to exercise the same level of due diligence and caution as you would if you were investing a larger sum of money.
  11. 11. Questions? 7 TIPS FOR REAL ESTATE INVESTORS Still not sure what's best for you? Contact an experienced real estate broker at Westwood NetLease Advisors. You'll get a free 3o minute consultation, and solid advice on how to get started investing in your income property. Visit our site for more information on commercial income property.

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