How Crowdfunding Is Being Used by Real Estate Investors

Crowdfunding has become all the rage in recent years to help people launch a variety of projects, nonprofits, or even companies. It looks like crowdfunding could even be reaching into the real estate market, though, which has some important implications for investors.

One such example of this is SaundersDailey, which provides opportunities for properties all over the country. The company is a co-invested fund that relies primarily on matching community investors with opportunities in their local market. Although crowdfunding on a national basis is problematic because of the underwriting risks, this local approach removes some of those concerns.

Part of the rise in crowdfunding has to do with meeting investors interest levels. Many investors are hoping to uplevel their portfolios. This might mean going from a building with a few dozen units to a few hundred, and this often comes in the form of a 1031 exchange. As a result, these investors are looking for sellers with an open timetable.

Some have suggested that even though crowdfunding is somewhat new to the real estate market that the potential for oversaturation is strong. According to some experts, there are as many as 250 crowdfunding platforms that dabble in the real estate market currently, but there is still plenty of room to grow.

It's likely that as crowdfunding platforms grow and evolve, they will focus on different needs for the real estate market. This could be types of investors, types of returns, geographic locations, or even types of real estate. As more platforms enter the market and strive to be competitive in the landscape, it is expected that they may try to specialize and succeed in serving one particular segment of the market.

The average crowdfunding commercial real estate investor is someone earning between $200,000 and $500,000 a year. Even though this would be considered a solid income by most, it's just the right level of income for investors not to want to risk too much of their own money. This is why crowdfunding appeals to this particular subset of investors, so long as they can find the right crowdfunding platform for their needs.

Many people in this subset of investors feel like all the high-end investment opportunities go to those earning more than $500,000 a year, thus shutting out the investors making less than that from getting involved in the market. Crowdfunding, however, has the potential to change all of that and make real estate investment much more accessible.

Visit http://www.qualifiedintermediary.net to learn more about 1031 exchanges.

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