February 27, 2019
Joe Fairless

Property Investment Strategies: Raising Money for Real Estate Investment vs Crowdfunding

You’ve promised yourself that you’ll take your real estate investing career up a notch this year. But you know good and well that you can’t make big moves in real estate without big money. And unfortunately, that’s a level of money you don’t have.

Just because you don’t have a large sum of money in the bank to fund your real estate investment deal doesn’t mean you can’t get it. But what’s the best way to go about raising money for real estate syndication, for example? Let’s take a look at a couple of common property investment strategies: raising money from a few accredited investors versus crowdfunding for real estate deals.

Syndication Deals

If your business plan is to buy and sell apartment complexes, as I do, it helps to have the financial backing of investors with whom you already have relationships. This may include family/friends, property owners, doctors, attorneys, financial planners, accountants, and business associates.

Essentially, you present them with the details of the deal and they passively invest if they feel like your project is a good fit for them. Pursuing capital from a handful of accredited investors means building trust and networking with those you know may be interested in your next big deal. It also means choosing high-net-worth and business-savvy individuals to whom you can bring future deals and work with them over and over.

Crowdfunding for Real Estate Deals

With crowdfunding, you place your deal up on a site or other media where investors come to find a deal. This leaves you (and your real estate business) at chance’s mercy. Under this strategy, not only are you not actively seeking investors for your deals but those who respond to your post may not offer much value to you. For example, it may be someone with only a couple thousand dollars to invest, which is great if your deal is small or you’re willing to have lots of different people involved in a single deal, but is not so great for larger, more expensive properties or if you’re looking for a more streamlined process.

Plus, it is likely the investors who contact you as you’re crowdfunding for real estate deals will be unknown to you, meaning you cannot be sure of the validity of their business practices. You don’t want to end up getting scammed by illegitimate lenders.

Why Not Bank Loans?

Both syndication and crowdfunding are generally inexpensive and not as time-consuming as going through the traditional bank lending process. As a result, they’re two of the best property investment strategies if you have a time-bound and specific real estate investment goal. At the same time, it does take time and work to convince others that your cause is worth investing in. When done properly, though, it can be a very promising way of upping your game in the real estate world.

Start Investing in Real Estate Today with the Right Property Investment Strategies!

If you’re eager to build up your bank account and thrive like never before in the world of real estate, it’s critical that you employ the right property investment strategies. Get in touch with me, Joe Fairless, to discover which investment strategies are proven to work and which ones may be most suitable for you.

Disclaimer: The views and opinions expressed in this blog post are provided for informational purposes only, and should not be construed as an offer to buy or sell any securities or to make or consider any investment or course of action.
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