We like to think that since the beginning of time, real estate projects have often been funded with many people coming together to successfully execute a project. Back in the day, there was no Internet, and back in the day, they didn’t call it “crowdfunding”, but in essence it was the same concept.
A key part of investing is both knowing and trusting the people with whom you are doing business — and again, this principle holds true in all types of investments, not just online crowdfunding. So just like any other real estate investment, investors should be assessing at least the following important factors specific to the investment opportunity:
· Know the Property
Physical — location and type of development
Financial — return and financial analysis including currency risk, reporting and payment terms
Legal — legal structure and regulations
Social — local current market conditions, comparable metrics and data
· Know Your Developer/Sponsor
Track record and history
Expertise in the particular category of the project being funded
· Know Your Investment Appetite
Consider other investment options/personal portfolio assessment
High risk tolerance — consider equity offerings with higher returns
Low risk tolerance — consider debt offerings with lower returns
As well as a few specific to the crowdfunding platforms themselves:
· Trust, transparency and credibility of the team — their track record
· Technology and ease of use
· Easy access to the key team members with questions/comments about the platform or particular deal
Investors should look to work with platforms that they trust and like, but equally important is the quality and appeal of the investment opportunities listed on the platform.
Once on board, we believe most of our members take the following thought pattern in order of importance when assessing any offerings.
5. Deal type
My personal goals as an investor is to find a happy balance between spreading risk and not wanting to monitor too many individual projects. You need to find your happy place.
InvestaCrowd is an Asia-based real estate crowdfunding platform, bringing our members institutional grade real estate investment opportunities, from markets with transparent and established legal systems and real estate developers who have proven and successful track records.
We welcome all comments and would love to hear what you think. To find out more about what we are doing now, please login and create an investor account at www.investacrowd.com, a leading global real estate crowdfunding platform.