Understanding the Basics
Crowdfunding is not only happening in forming projects for any cause. Such as asking a large number of people some small amount of money to fund a certain venture. It is an act of pooling together different people who can support and commit financially.
The real estate is now adopting this form of funding and investment to properties. To make this possible, they have created a platform or a website. A method of reaching these accredited or non-accredited investors of real estate.
This sounds quite a jargon to someone who is not really familiar with real estate. We will get to know more about it in a simpler way. What is an accredited or non-accredited investor? What are these Real Estate Crowdfunding sites? Keep reading for you to learn more.
Let us understand Accredited and Non-Accredited Investors of Real Estate
All real estate crowdfunding sites accommodate both accredited and non-accredited stakeholders. These are two qualifications or categories that one venture capitalist may belong.
The eligibility of an accredited investor as ascertained by Securities and Exchange Commission. To be able to get certified you must conform to the following standards:
Certification #1: The aspiring investor must have an income of $200,000 plus. Or a combined income of $300,000 plus in the recent 2 years.
Certification #2: The investor must have (individual or combined) a net worth of $1 Million plus. That is excluding the value of the main house.
Certification #3: An accreditation from the director, executive officer or general partner. For the issuer of non-regulated securities.
So, you are categorized as a non-accredited investor is you will not be able to meet the requirements. As a certified or accredited venture capitalist, as mentioned above.
Determining your classification is very important. Since real estate crowdfunding platforms will have to find out the right category. It is because there is the website that accepts non-accredited investors. Whiles other only accept the accredited ones or both.
5 Best real Estate Crowdfunding Websites (Accepts Non- Accredited Investors)
To further guide in your real estate ventures. we will be presenting to you 5 of the best real estate crowdfunding platforms. These are site who welcomes non-accredited investors. There is a short list focused in one category to simplify our understanding on the topic.
This company accepts both accredited and non-accredited investors. They only require a small amount of investment at $500.00
Founded in 2012. The investment of all stakeholders circulates all over their portfolio. Their investments include multifamily developments and office buildings. Also, new homes construction and, acquisition and construction loans.
But, you cannot choose a specific project you can invest in. To learn more about it please click here.
#2: Small Change
Accepting accredited and non- accredited investors with a minimum investment of $500.00.
It started in 2014. The nice thing about this company is that you can choose the venture that you want to put your funds in. Yet, not all are open to non- accredited investors. This fits to humanitarian investors. Click here to know more about Small Change.
They accept both accredited and non-accredited investors. And, the marginal investment is $100.00
Established as a non-profit company in 2008 and became for –profit in 2009. They aim to give help to distressed homeowners to stay in their homes. The investment is differentiated across a group of afflicted mortgages. Which could become a loan modification or foreclosure represented by AHP. Learn more.
#4: Rich Uncles
Accepts accredited and non-accredited investors. The minimal investment is at $500.00
Established in 2006 and was relaunched in 2016. They are offering income producing retails, office commercial and industrial real estate projects. Same as the Funrise, you cannot choose the project to invest in. Dividends are paid monthly with an average return on investment rate of 7% or more. Check their website for more details.
Accepts both accredited and non-accredited investors. Minimum investment is $100.00
It started in 2013 and had already funded over $10 Million in deals. Investments are poured in Limited Recourse Obligation (LRO). Yet, there are property and loan details that you can choose from. All deals are residential projects in real estate. For details click here.
As a closing, real estate crowdfunding is a great back up to supplement income. The shortlist that we got for you above, are only a few among many platforms in the market. These are companies that offer affordable investments. These are much lower compared to investing in an actual chunk of property.
The very nature of the business is taking a risk. You won’t take any return unless you have invested in it. Same is true in real estate crowdfunding. You will not be owning an entire property. And as a stakeholder, you need to have an open mind on the investment you have taken. Take time to research and weigh things to keep an informed decision.