If you’re thinking about getting into real estate investing, it’s not just about diving in with your money. You need to do some research, understand what kind of investor you’d like to be, and figure out the best path for you. Real estate crowdfunding websites can be a great starting point for beginners.
These platforms let you invest smaller amounts of money while helping you learn more about real estate investing. Over time, you can earn decent returns and figure out what kind of investor you want to become. Plus, investing through these platforms can bring in significant passive income.
When you start investing in real estate, you’ll be considered a non-accredited investor. This means you might have more restrictions on where you can invest, with some platforms only allowing accredited investors. However, as you keep investing, you may eventually become an accredited investor.
To achieve accredited investor status, you need to earn at least $200,000 annually for the past couple of years and keep that income level the year you get accredited. Furthermore, you need a net worth of at least $1,000,000. Though this might seem tough at first, it’s attainable with time. As a non-accredited investor, you might face higher fees and lower returns, but it’s still a worthwhile venture. Crowdfunding sites make it easy to start, which is why they’re so appealing.
If you decide to try real estate crowdfunding, there are many options out there. It’s important to find a platform that fits your goals and personality. Here are three platforms I recommend for beginners.
Fundrise is great for non-accredited investors. It offers various options with low initial investments and high returns. They also charge a simple annual flat fee of 1%.
Groundfloor is different because it lets you pick the specific loans you want to invest in. It has a lower initial investment requirement and shorter-term commitments compared to other sites. It doesn’t charge investment or management fees, and the average return on investment is around 10%.
Finally, Rich Uncles is another excellent choice. It has fewer investment options but a very low starting investment—just $5. However, fees are higher, ranging from 1% to 3% for the first three years.
In conclusion, real estate crowdfunding offers a lot of opportunities. Before choosing a platform, think about your initial investment amount, risk tolerance, investment timeline, long-term goals, and whether you prefer passive or active management of your funds.
Starting in real estate investing can seem overwhelming, but the right crowdfunding platform can make the journey rewarding. Now is a great time to start, and with the correct tools and knowledge, you’ll be on the path to success soon.
Have you ever tried real estate crowdfunding platforms? We’d love to hear about your experiences!