When You Want to Launch a Crowdfunding Campaign for Real Estate
As the new year starts, just about everyone is looking for ways to make big money. For many, real estate investments sound like the way to go. Notwithstanding, there is always strength in numbers. Therefore, it might seem smart to launch a crowdfunding campaign and pull in a number of investors.
Just about everybody understands the concept of crowdfunding at some level. In fact, only a few months ago, we wrote about crowdfunding initiatives for those who suffered losses in Hurricane Harvey. Meanwhile, you could have some great ideas for real estate investments and just need some help in finding the right financing.
In truth, 2018 may be the year to consider starting a crowdfunding campaign for real estate investment. At the very least, the new tax code may offer some striking incentives. At the very least, the fact that pass-through entities can anticipate a 20% business deduction changes things. Additionally, the new law alters the depreciation life of real estate and property, which makes for more significant deductions sooner.
Crowdfunding for Real Estate
First things first. Do you have interest in an existing crowdfunding platform? For starters, you may want to look at this review for the top 100+ real estate crowdfunding sites for 2017-2018. This offers some interesting information for both accredited and non-accredited investors.
There are some other considerations when it comes to starting a crowdfunding campaign. Are you initiating it for yourself? What types of real estate acquisitions do you plan on purchasing?
Meanwhile, there’s also the chance that you may attempt to set up the deal on behalf of others. If that’s the case, you may find yourself subject to broker-dealer laws. This could include the necessity to secure a license.
Due diligence is critical when it comes to crowdfunding for real estate. If you’re looking to buy into a deal, you need to know something about the project’s developer. Likewise, make sure you have the credentials to launch the crowdfunding campaign if you want any kind of return. Be prepared to release financial documentation.
Crowdfunding for real estate operates under many of the same principles of securing other types of investors. Obviously, you need to have a business plan, as well as a market analysis of the proposed acquisition. Of course, comps and photographs should be part of the detailed report.
There is a great deal of documentation associated with launching a crowdfunding campaign for real estate investment. You need to be sure that you are in compliance with statutory and regulatory expectation. For that reason, it makes sense to meet with an attorney with experience in crowdfunding for real estate.
If you are considering launching a crowdfunding campaign for real estate, the Law Offices of Manfred Sternberg and Associates can help you. Contact us to schedule an appointment. We look forward to speaking with you.