Test the Waters: Entry-Level Real Estate Investing
You don’t need to be wealthy to invest in real estate. In fact, you don’t even need a full-time job.
One of my missions in my business is educating and equipping people to make smart investments and improve their financial future. Many times, would-be investors don’t even get to test the waters and learn the process because the barrier-to-entry is too high. Buying real estate, like any other investment, involves both risk and reward. If you don’t have money for a downpayment or arent ready to invest in a property yourself, using crowdfunding apps can be a great introduction into real estate investing at a more approachable price point.
Fundrise allows you to buy into pooled real estate investment trusts (REITs) and become an investor in real estate portfolios. With one deposit of $50 or more, you could become an investor in multiple properties at once.
Unlike pooled REITs such as Fundrise and Streitwise, Groundfloor is a hard money lender. They issue short-term fix-and-flip loans to real estate investors, and you can pick and choose which loans you want to invest in.
Lofty allows you to invest and become a partial owner of single family rental properties for as little as $50.
If you’re looking to invest a little more, you could take $5000 and use Streitwise to get into passive commercial real estate investing.
In general, the process is as follows:
Create an account: The first step is to create an account with the crowdfunding platform of your choice.
Choose an investment: Once you have created an account, you can browse the available investment opportunities. You can typically filter properties by location, type of property, expected return, and other factors. You can invest in real estate portfolios so you instantly become an investor in multiple properties at once.
Make a deposit: If you find an investment opportunity that interests you, you will need to make a deposit. The deposit amount will depend on the platform and the investment opportunity, but it is typically in the range of a few hundred to a few thousand dollars. When I first started, I put $50 into . I monitored the progress and once I was comfortable with it, I started investing more.
Monitor your investment: You can typically track the progress of the property, view financial reports, and see any returns you have earned.
Sell your investment: Depending on the platform, you may be able to sell your investment at any time or only after a certain period has elapsed. If you want to sell your investment, you can typically do so through the platform.
It is important to note that investing in real estate using crowdfunding platforms involves risks, including the possibility of losing some or all of your investment. You should carefully review all investment opportunities and consult with a financial advisor before making any investment decisions. If you want to test the waters before putting a large chunk of money into real estate, these apps are a great place to start.