Real estate investment crowdfunding is becoming the go-to for many developers who can’t or don’t want to go the traditional route to gain funding for a project. It’s also gaining popularity as a low-risk way for investors to break into real estate investing or expand an already established portfolio. As a result, companies that specialize in online real estate crowdfunding platforms are springing up and making the whole process of real estate investing more efficient, quicker, and less expensive than traditional financing methods.
While there are upwards of 100 companies specializing in online real estate crowdfunding, here are seven companies that are making waves in the industry.
Vowing to cut out the middleman, Fundrise offers low-fee diversified real estate investment directly to anyone through its online platform. With 80,000 members and nearly $3 billion in real estate investments, Fundrise touts that its investors impressively earned a weighted average return of approximately 13.0% across all investments during 2015.
Designed to serve both accredited and institutional investors and real estate sponsors and borrowers, RealtyMogul is an online capital marketplace for real estate. Investors gain access to hard-to-find, pre-vetted opportunities using a reputable, compliant platform. And borrowers can raise capital with just a few clicks.
Borrowers can gain financing in as little as 10 days with RealtyShares’s diverse range of financing solutions for commercial and residential real estate projects. Borrowers apply online in minutes and receive approval within 24 hours. From there, this online real estate crowdfunding company does everything from underwriting to managing investors. Investors can open a free account and begin investing with as a little as $5000 and a low investor fee (2% max annually).
CrowdStreet is a software and services company that enables accredited investors to access institutional-quality commercial real estate no-fee investment opportunities. Additionally, borrowers can find new and repeat investors, raise capital faster and manage investors from their own private marketplace powered by Crowdstreet.
Groundfloor claims to be the only real estate lending marketplace open to non-accredited investors. Since Groundfloor is currently in limited release, you still need to be “invited” to borrow or invest through the site. However, the company says it has funded more than $12 million of real estate loans across 128 projects, repaying more than $5.5 million of principal and interest with a returned annualized yield of more than 12%.
With a global investor network, Patch of Land is committed to procuring funding for projects that are often overlooked or rejected by banks and traditional lenders. Patch of Land originates, underwrites, and services loans, offering these back to accredited institutional and international investors.
The goal of Prodigy Network is to offer smaller investors access to large real estate assets, specifically in Manhattan, which to date has been accessible to only institutions and ultra-high-net-worth individuals. Investors gain access to a secure investing portal and personalized dashboard which offers project updates, market reports, and financial statements. This allows investors to easily and confidently monitor their investments and make transactions online.
Learn more about online real estate crowdfunding platforms
With online real estate crowdfunding increasingly creating opportunities for both your real estate investment buyers and real estate development clients, it would be wise to learn everything you can about this new way of doing business. Take the Crowdfunding in Real Estate course to learn everything you need you to know.
Register for McKissock’s Crowdfunding in Real Estate course today.