of your life, but you don’t know the team that’s redeveloping the purpose-built multifamily community 15 minutes away, so you’re missing out.
• Does the platform allow auto-investments? • What is the minimum investment? Depending on your investment strategy and goals,
there are other questions you probably have. Sites such as therealestatecrowdfundingreview.com are non-affiliate sites that do in-depth research on investing platforms to help you decide where to invest. DON’T CHASE YOUR PRINCIPAL As an investor, you probably love to chase returns and a deal, but you don’t want to chase your principal. When it’s just your money in the deal, what do you do when a borrower falls behind in payments? Or abandons a project? If you’re a lender on a real estate investment platform, you rely on their team to handle it. Many investment plat- forms have teams who work diligently to resolve issues of loan extensions, late payments, and defaults to get inves- tors their money while providing status reports of what’s going on and discussions taking place. BUILDERS, REDEVELOPERS, AND HOUSE FLIPPERS Crowdfunded real estate investing sites like Fund That Flip launched so builders and redevelopers could stop looking high and low for funding with banks, rich uncles, friends, and their own bank accounts—and get the majority of their financing from one reliable place. These various real estate investing platforms offer a multitude of benefits such as sustainable or low rates, 24/7 support, support for exiting a loan, refinancing, easy technology, etc.
If you still want to do some private lending, there’s always an opportunity. Builders and redevelopers still need private money because most crowdfunded lenders only finance a portion of the loan—assume 90%—so the borrower has some skin in the game. To completely finance their deal, they often turn to private money lenders, giving you another opportunity for great returns with perhaps a little less risk. SIMPLIFY YOUR INVESTMENTS Lending on a crowdfunded investing platform versus with a group of colleagues can make it much simpler to find deals to passively earn income. Investment platforms give you the opportunity to put your private money toward fractional shares of loans for residen- tial rehabs and new construction—virtually the same as you were doing before. However, now you can do it from your laptop or phone while sitting on your couch. You also have greater access to investment opportunities throughout the U.S., and you can sometimes choose to invest with a spe- cific developing team, or in a certain state or community.
GET TO KNOW YOUR INVESTMENT PLATFORM AND BORROWERS
Obviously, there’s risk involved with any investment. Any time you’re investing, you should do your research, as well as talk to a financial adviser. But when you invest on many peer-to-peer real estate investment platforms, real estate analysts and underwriters are also researching every borrower and diligencing every deal before anyone can invest in it. For platforms like Fund That Flip, each deal is completely pre-funded. The area where you’ll want to do a little research is the operations and policies of the investment platform: • How do they decide which deals to finance? • How much visibility do you have into the borrowers’ history and experience before investing? • How often do you get updates on the status of the loan?
Charlotte, North Carolina, rehabbed home financed by Fund That Flip
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