Discover tips and advice on investing in crowdfunding real estate

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Frequently Asked Questions

Crowdfunding Real Estate Investments
Investors
Preferred Returns
Investor Security
Taxes and Regulatory

What is crowdfunding real estate?

To start, crowdfunding is a new tool, which is utilized to raise money for businesses via the power of the crowd. By offering lower entry fees to a larger number of investors, these businesses are successfully launching their next big project. Furthermore, until recently real estate investments were only available to those with the necessary private equity. This in itself made investing in real estate seem impossible for many individuals. However, once the Jumpstart Our Business Startups Act of 2012 changed some rules under Regulation D, many doors opened for the real estate industry. Most notably, the ability to utilize crowdfunding to gathering funding for investments. Today, investors of all kinds can easily start investing in real estate with as little as $5,000 via crowdfunding real estate platforms.

How is this different from an eREIT?

Well to start with, an eREIT stands for Real Estate investment Trusts, which can be invested in through a mutual fund. Furthermore, eREITs’ regulations and distributions differ from those of crowdfunding real estate investments. To compare the two, eREITs generally hold high maintenance fees, as well as other costs. While crowdfunding real estate through DiversyFund allows complete control with minimal fees/no fees.

What are the differences between debt and equity investments?

When investing in crowdfunding real estate, the two types of investments available will be equity or debt investments. Here are what both types of investment can be defined as: Debt investments: When investing this way, the investor becomes the lender to the entity sponsoring the real estate deal. The loan is secured by the property. Furthermore, each investor receives a fixed rate of return. This is calculated via the interest rate on the loan and how much the investor has invested in the project. Overall, this type of investment leaves the investor with priority when it comes to obtaining a payout from the deal. Equity investments: With an equity investment, the investor is considered a shareholder in the property. Thus, their stake is directly proportionate to what they invest in the deal. Finally, when it comes to returns, investors can be distributed their shares in a variety of ways including rental income generated or appreciation value should the property sell. Of course, you will need to ensure the crowdfunding real estate platform does not have any fees as well. Learn more about the differences between equity and debt investments here.

What are the terms? When can I expect to get my money back?

For each investment opportunity, the terms may vary. Please view our investment opportunities to see specific project details.

What are the investment strategies of crowdfunding real estate investments?

For each investment opportunity, the terms may vary. Please view our investment opportunities to see specific project details.

Where are your projects located?

For each investment opportunity, the terms may vary. Please view our investment opportunities to see specific project details.

How can I ask a question regarding a specific investment?

For each investment opportunity, the terms may vary. Please view our investment opportunities to see specific project details.

What tax documents will I receive?

For each investment opportunity, the terms may vary. Please view our investment opportunities to see specific project details.