Real estate investment platforms are a way to raise money for real estate investments by reaching out to a pool of investors to contribute funds into a project. Simply put, it is a method of fundraising that enables real estate investors and sponsors to finance large or small projects.
Real estate investment platforms are often linked to us through peer-to-peer lending or financing of real estate ventures. The process of raising money is carried out through an online investment platform. One party (the borrower/sponsor) enters a forum with the intention of securing financing for the launch or enhancement of a real estate project. Another group (investor/lender) enters the network to invest money in exchange for high returns on investment.
Locking down the funds required to invest in real estate is usually a major challenge for both newcomers and experienced investors. Property investment platforms can be an excellent alternative to fundraising and can also provide some important advantages for borrowers/sponsors and investors/lenders that include the following.
To the Borrowers and Sponsors:
- Real estate investment platforms expand the sources of financing as the investor network grows.
- Peer-to-peer lending enables early-stage real estate companies to start operations more quickly.
- Efficient peer-to-peer lending ventures result in positive word of mouth and subsequent client loyalty.
- Money and time can be saved using a user-friendly investment platform.
For Investors and Lenders:
- Attractive, high-yielding, short-term investments
- Peer-to-peer lending opportunities do not attract investment costs, which means higher returns (average ROI 12%-16%)
- Investment platforms profit from transparency in transactions
- Investment platforms provide an opportunity to diversify your investment through multiple asset classes
If you are a real estate investor with liquidity, you can passively increase your returns by participating in investment platforms.
Whether residential, commercial, or multi-family assets, several investment platform sites are available to investors in real estate. Without the right details, one can easily get lost in a sea of choices. When choosing a platform, review all of your options such as; site accessibility, level of customer support, platform functionality, and all available documentation. You may want to select a platform that functions as a broker-dealer rather than a listing service, and a platform with previous experience in real estate investment handling.
Before using a real estate investment platform, find out what kind of documentation the company receives prior to the closing of potential deals and whether they, as a firm, have liability insurance to investors when something goes wrong. As for customer support, check the presence and efficiency of the customer service offered by the platform.