There are countless variations of real estate investments. At PropFunds, our primary goal is to protect the capital you invest with us. There is no other goal more important than making good on our commitment to you to protect your capital. We have the experience and knowledge of purchasing, operating and maximizing the returns of any given real estate investment. PropFunds has the investing experience to know how and why any given real estate has the potential to generate an above market return while incurring minimal risk.
We primarily focus on purchasing and securing first trust deeds on multifamily, industrial, single tenant triple net leased, office, hospitality (hotel) and high end luxury home type properties that can produce passive income and increased value. With PropFunds, you have over 150 years of combined real estate investing experience by your side every step of the way.
Here we’ve come up with just a few overviews of the ways people typically invest and profit in real estate:
REITs - A real estate investment trust, or REIT, is created when a corporation uses investors’ money to purchase and operate income properties. REITs are bought and sold just like any other stock, on the major exchanges. This type of real estate investment allows investors to get into non-residential investments and is a solid choice for investors who want a more regular income. The inherent risk associated with investing in a REIT is that it’s value is connected to how well, or badly, the overall stock market is doing. Additionally, they are highly sensitive to interest rates. Historically, in times when interest rates are rising, REIT stock values usually decline.
Single Family Rental Properties – The most common real estate investments for individual purchases is buying, and then renting, a home. Historically, buying and renting out a single family residence does not generate “above market returns.” This is due to the fact that most homes sell for at a price that includes a “user premium.” What this means is that homes sell for a premium to what they’d sell for if single family residences were only sold as investment properties. But, they’re not.
Most single family residences are sold to individuals that plan on living in them and making the property their home. Most single family residences sell for a premium for this reason and it’s difficult to keep a single family property rented for enough to cover expenses and make the mortgage payment. That’s why investing in single family residences is usually not the ideal passive income investment. Fixing and flipping a home is a good investment strategy for someone that has the knowledge of how to implement this investment strategy. However, one bad tenant could leave you with a negative monthly cash flow.
Private Real Estate Investment Groups/Syndications – Private real estate investment groups (or Syndications) are a great answer to the question, ‘How do I invest in real estate?’ Investment groups, like PropFunds, purchase office, multi-family, industrial, single tenant net leased, hotels, high end luxury homes and similar properties that the average investor is usually unable to do, due to the large capital requirement necessary to purchase these types of properties, or they don’t have the expertise to make wise investment decisions if they do have the capital to purchase these type of assets.
The knowledge, expertise and investment history of making an investment with any “Investment Group” is imperative to understand before you investment in these type of investment opportunities. However, an investment in these type of properties, when done correctly, can generate above market returns while incurring minimal risk. Crowdfunding - One of the newest ways to invest in real estate, in 2013 alone general crowdfunding was responsible for about $5 billion worth of capital. Although crowdfunding for real estate is still new and finding its rightful place in the market, the basic premise is simple. Through crowdfunding investors can pool their money and buy shares with other investors of properties like apartment buildings, office buildings, retail centers and more.
Over the past year, crowdfunding was responsible for raising over $100 million for real estate investment properties across the U.S. Participating in crowdfunding is different than participating in a REIT, as investors receive more transparency and have more control over both their investment selection and location.
Over the past few years the process of crowdfunding has become wildly popular as means to raise money to start a business or support a cause. When used wisely, various crowdfunding platforms can be used to help you raise the funds you need to start your own project, or you can find new and promising projects that you can help support and invest in.
The three most widely recognized types of crowdfunding include:
Equity Crowdfunding - Where investors receive a share in the company they’re helping to fund in exchange for investing in the idea. The potential payoff is great, but there is the risk of losing it all.
Donation-Based Crowdfunding - Most investors get nothing for these types of investments; these investments are actually donations, usually in support of a charity or for a good cause.
Reward-Based Crowdfunding - A currently popular trend, this is a reward-based system where investors are given different levels of rewards depending on how much they donate, including everything from pens and gift cards to possibly even shares.
Many real estate industry groups are jumping on the crowdfunding bandwagon and are touting low-risk access to the U.S. real estate market. It’s becoming clear that both real estate developers and investors can reap significant benefits and returns by allow their real estate investments to participate in crowdfunding.
Crowdfunding with real estate investment options allows all kinds of investors, even those with only small amounts of money, access to the real estate market. Investors also now have access to more projects than ever, they’re working directly with real estate developers and overall are better able to choose which real estate projects work best for them easier than ever before.
Of course, investors face the same risks as they would when investing in real estate any other way - if they market goes south, there will likely be money lost. It’s advised that when you’re first starting out investing in crowdfunded real estate, you should go with a firm that’s been around for awhile and is likely to stick around and survive.
It’s the age of the internet, and recently the time for crowdfunding, so it should be no surprise there are almost a countless number of crowdfunding startup sites. As with any investment, you should do your research on the company you’re thinking about working with before you do so, in order to best avoid any unpleasant surprises.
We’ve come up with some quality crowdfunding sites for real estate investment opportunities to help you get started: NOTE: WHY WOULD WE TOUT OR TELL OUR POTENTIAL INVESTORS TO GO INVEST WITH OUR COMPETITORS?
Fundrise - This online investment platforms allows investors to invest directly into commercial real estate. Fundrise users had already invested over $10 million in real estate properties by the time 2014 started. The Fundrise fees range from 0-3% and there is only a $100 minimum investment rule enforced.
Realty Mogul - Investors on this site have already participated in over $14 million worth of real estate deals. Realty Mogul requires you to invest with at least $5,000 and fees depend on the type of investment you’re making as well as the nature of your transaction.
CrowdStreet - This crowdfunding website connects accredited investors with already professionally-managed real estate investment properties. Both equity and debt investment opportunities are available, as well as traditional direct investment options. With another $5,000 minimum investment requirement, CrowdStreet investors have completed over $200 million dollars worth of transactions since 2003.
Crowdbaron - With this crowdfunding site, investors from around the world have the opportunity to invest in international properties. Although U.S. citizens currently can only sign up for the newsletter, those in participating countries can become involved in Crowdbaron projects for just 1% of each particular deal size.
Online Realty Fundraising Cocktail - This Oct. 25 VIP real estate investor event In Boca Raton, FL allows you to connect with investors and industry leaders where you can share and learn about opportunities in the real estate industry. This Dinners and Cocktails series runs for 3 days; join in to meet private equity, family offices, angels, developers and more who are helping to revitalize the industry through crowdfunding.
Global Real Estate Crowdfunding Conference IV - This New York conference provides investors the opportunity to meet with other real estate crowdfunding players. On Nov. 13, this conference will bring together a new breed of crowd investors, along with traditional and institutional investors, all in one place.
How to Attract the Right Investors - In this half-day workshop in London, you’ll learn how to secure your investments with crowdfunding, angel investors and venture capital. Get a head start on 2015, Dec. 11 is your last chance to attend this workshop this year and to learn how to save time, money and energy in your investment searches.
RealCap Chicago: Introducing Online Capital to Real Estate Entrepreneurs - For real estate professionals, entrepreneurs, investors and crowdfunding sites alike, this January real estate conference In Chicago, IL is sure to help start your year off right. With this chance to learn how to raise debt and equity through an online platform - or even how to create your own platform - you won’t want to miss this 2015 crowdfunding conference.
Silicon Valley Meets Crowdfunders - This third annual conference and expo over the March 5-6 weekend in 2015 is yet another real estate conference you can’t afford to miss. Crowdfunding industry leaders will be present both in attendance and participating in panel discussions. Anyone who is considering crowdfunding in one way or another should head to Palo Alto, CA for this exciting crowdfunding conference.
Crowdfunding USA Conference & Expo - This Washington DC conference is celebrating a second year of bringing together traditional investors and crowdfunders to discuss recent real estate news and opportunities. Here in May, you’ll have the chance to network with and hear from experts who have successfully implemented crowdfunding as a part of their fundraising strategy.
At PropFunds, our main goal is to protect the capital you invest with us. We understand every aspect of underwriting an investment, we personally vet every real estate investment property we raise capital for, and we oversee the operations of every property for as long as the asset is held. We have the experience and knowledge you need for purchasing, operating and maximizing the returns of any given real estate investment.
PropFunds has the investing experience that makes the difference between protecting and losing your investment, and we provide access to the investment opportunities you’ve been searching for. Whether you’re into the residential, commercial or industrial real estate market, or all of the above, we’ve got the real estate advice you need.
We understand what makes a real estate investment a safe one, and we’re here to help you every step of the way, whether you’re new to investing and have crowdfunding questions, or you just need occasional advice and help keeping up with crowdfunding news and conferences, PropFunds will be there for you.
Contact us by email or give us a call to find the answers you need for your crowdfunding real estate investment questions today. We can help from the beginning to the end of your investment process every time.