Is Crowd funding Deals Safe Real Estate Investments?

The latest trend for people trying to raise money for ventures of all types is called crowd funding or crowd sourcing — where people pool their money to support projects ranging from books, movies and other artistic endeavors to software development and Internet start ups.

Cosmic India

And of course, it would only seem natural that some entrepreneurs would bring this type of capital raising effort to private real estate deals. In fact, thanks to changes in federal laws related to raising capital, the crowd funding options for investing in real estate are open for business!

But is placing your hard-earned cash into a crowd funding real estate deal a smart and safe way to invest your money? Will you earn money? While it is possible, the odds are highly against you.

First, real estate investing, and particularly development deals, is very high risk. Many things can go wrong with real estate, causing significant financial pain and losses to owners. And these crowd funding deals are primarily for commercial investments, which are the riskiest.

Even if the crowd funded deal you are considering is via an experienced developer or investor, there’s still a chance that the deal will go sour. In some cases, the developer will take large fees out of your “investment,” or your money could be stuck in a deal for years, if not a decade or longer.

Related Posts : 

Tips for wholesaling real estate

Real Estate Investment Properties

Tags : Wholesaling real estate,crowd funding,tips for buying property,Cosmic Projects,Cosmic Structures.