Micro-Investing in Michigan Real Estate
4 Solid Ways to Micro-Invest in Real Estate in Michigan
“Crowdfunding as an idea itself isn’t new — brands have been doing it since the dawn of time.”
What in the World is Micro-Investing or Crowdfunding in Real Estate?
For the purposes of this discussion, we are going to consider micro-investing and crowdfunding to be interchangeable terms. It is a way to democratize real estate investing for people who maybe don’t have thousands of dollars to invest. It is way for individuals to pool their money together for as little as $1 into real estate investments.
Direct investing and ownership of real estate is capital intensive, and not everyone has the means just starting out to invest in direct ownership but want to be invested in real estate. Micro-Investing and Crowdfunding can be a solution.
What are the Advantages of Micro-Investing or Crowdfunding?
• Individuals can invest for as little as $1.
• Everyone that pools their money together gets a share of the returns from lending money for real estate projects or rents and property appreciation.
• Individuals can also benefit sometimes from the depreciation (tax benefit) from the normal real estate wear and tear to offset their gains from the micro-investment.
• If you need access to capital for real estate investing, you can use crowdfunding platforms to raise the money for your project.
• It is an accessible way for anyone to get started in real estate investing.
• It is usually a fairly liquid (easy to get your money out) kind of real estate investment.
• The length of time needed to invest your money can be short in crowdfunding to realize a return on investment.
“Fundraisers are the catalysts of change.”
What are the Disadvantages of Micro-Investing or Crowdfunding?
• One disadvantage is you do not own the real estate outright.
• Individuals investing in real estate with crowdfunding have limited decision making ability about the investment and thus limited control over the investment management decisions.
• Sometimes you have to be an accredited investor which is typically a high net worth individual already.
• Sometimes you have to agree to invest your money for longer period of time—five years for example.
• Like all investments, sometimes there are losses or lower returns than expected.
What Are the Ways You Can Micro-Invest or Crowdfund in Real Estate?
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You can get started for as little as $10 as an investor.
The length of time your money is tied up is short (6-18 months).
Investment returns can average more than 10%.
You can also borrow money ($75,000-1 million) on this platform with rates around 5.5% at the time this article was written for short term fix and flip projects.
Visit them at groundfloor.us
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For as little as $10 you can get started.
The length of time required for investing in fundrise is at least 5 years.
Average annualized returns on the platform are stated to be between 7.31% and 16.11%.
Visit them at fundrise.us
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Investments as low as $1 per share.
Investors benefit from monthly income and property appreciation without worrying about the management hassle of short term rentals.
Investors can pick the specific vacation rental property they want to invest in and how many shares they want to invest in that vacation rental property.
Visit them at here.co
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$50 minimum investment using a stable cryptocurrency like USDC.
Investors can pick which properties they want to invest in.
Investors benefit from rent, appreciation and tax benefits from owning real estate.
Apply to sell your property for all cash offers in a matter of days.
All decisions for each property made by all token holders on such things as increasing rent, selling the property or evicting tenants with a 60% majority vote of token holders.
Visit them at lofty.ai
How Can a Real Estate Professional Add Value to Micro-Investing or Crowdfunding in Real Estate?
A real estate professional can help with micro-investing and crowdfunding in real estate investing by educating their clients that these options exist.
Not only educating on the available options but how these platforms might help real estate investors in Michigan.
Finally, a real estate professional should be keeping themselves educated on the trends and developments in all areas of real estate to benefit their clients.
Why Micro-Investing and Crowdfunding are Important to Real Estate Investing in Michigan
Micro-investing and crowdfunding is a great way for new investors to get started in real estate and use their gains to purchase more real estate. Real estate investors can use these platforms to borrow money for their real estate projects. Finally, real estate professionals can educate their clients on the available micro-investing and crowdfunding platforms available.
Want to learn more? Contact us.
Disclaimer:
Always speak to your CPA, investment advisor and attorney before making any investment decisions. Past performance does not guarantee future returns. Arbor Advising seeks to educate and does not endorse any specific product, service or investment.
