Investing in Private Real Estate through Crowdfunding
Real Estate Investing has been around as long as mankind. People have sought to stake their own claim to land to cultivate, live, and build upon to improve their lives and their ‘net worth’. Through much of recent modern history, Real Estate Investing in large commercial projects such as sky-rises, shopping malls, medical plazas, and the like has been largely the domain of institutional investors or very high net worth individuals. This is beginning to change in the early 21st Century through a new way of investing in real estate: Crowdfunding.
In 2012, the Jumpstart Our Business Startups Act, also known as the JOBS Act, loosened rules for business fundraising. Regulation D governs how real estate fundraising can be used and who can take part. Access to commercial real estate investments has become more democratized and mere mortal investors can now spread their real estate investments across more projects, diversifying their risk.
Let’s take a look at a few companies bringing real estate crowdfunding to market for the savvy investor, shall we?
Crowdstreet describes their crowdfunding model:
“CrowdStreet is a real estate investing platform that gives investors direct access to individual commercial real estate investment opportunities, allowing you to review, compare, and personally choose the deals that meet your own investment criteria. Our managed funds and advisory services give you the same level of access, but we’ll handle the portfolio, making it even easier for you to invest.”Source: crowdstreet.com
Fundrise has a similar, yet slightly different take on Real Estate Investing through Crowdfunding:
“With Fundrise, you can invest in a low-cost, diversified portfolio of institutional-quality real estate. We combine state-of-the-art technology with in-house expertise to reduce fees and maximize your long-term return potential.”Source: fundrise.com
Using a Self Directed IRA for funding Real Estate Investing
Interesting in using your self directed IRA to fund these opportunities? Here’s an article we wrote on Investing Using Your Self Directed IRA