As a real estate developer, it’s important to consider the best site for your new project. The choice of location could have more influence on the success of your development venture than any other single factor. Some of your options include infill, existing, and new development. Each has its own benefits and drawbacks in terms or regulatory oversight, fiscal considerations, and environmental impact. The best decision is one that achieves the greatest balance of positive consequences for the environment, the community, and the profitability of the project.
Some of the best places to consider building are lots within urban limits that are vacant and either undeveloped or developed at some point in the past and currently under-utilized. These types of opportunities can represent the best and most undervalued properties for acquisition. In many cases the ownership of these properties may be in question and outstanding property taxes or other liens in place, offering room for creative negotiations and acquisitions strategies. In addition to favorable acquisition potential, infill lots benefit developers by reducing the need to build new infrastructure to support the development. Transportation expenses for materials, inventories, and labor is reduced as well when developments are placed within the urban environment.
Akin to infill development, existing buildings provide opportunities for efficient and environmentally conscious development. Renovating existing structures rather than breaking ground for new builds dramatically reduces the need for raw materials, reducing construction costs, time, and labor. The greater the scale of the project, the more fossil fuel and natural resources consumed in the production of materials and transportation to the job site. Additionally, existing buildings reduce the total project time and allow capital to be recovered more quickly, reducing economic risk and holding costs. Working with exist structures minimizes the time required for zoning and planning approval.
Regulatory, Zoning, and Tax Benefits
An added benefit of existing and infill developments are financial incentives provided by local, regional, and national regulatory agencies. Check with applicable agencies to determine what tax breaks and credits may be available for infill and restoration projects. Incentives are also available in many jurisdictions for sustainably designed and managed developments. Zoning is another issue involved in the selection of development site. Existing and infill developments have established zoning regulations that make it easier to start operations. New developments require a lengthy planning and approval process that can take from 6 months to 2 years for final approval. Planning commissions and environmental authorities have much greater involvement and oversight in new developments. Bureaucratic practices and politics has the potential to bring developments to a full stop, permanently is some instances.
Impact on the Natural Environment
Opting for infill and existing developments reduces impact on the environment not only by reducing emissions, but also by protecting undeveloped landscapes. Even the most sustainable developments will displace indigenous species and interfere with the natural hydrology of the site. New development is particularly important to restrict near bodies of water and regions with endangered or underpopulated species. The runoff by built developments generally finds its way into neighboring water ways and subterranean reserves. New development requires roads and utilities to be built, many times obstructing natural migratory paths, creating waste, pollution, and contributing to depletion of natural resources.
As opposed to new developments, especially those outside the urban center, infill projects take advantage of existing transportation, energy, water, waste, and other systems provided by municipal subdivisions. Infill developments additionally allow tenants to take advantage of existing demand for products and services, as well as local distribution channels. For retailers and service providers, the existing foot and automobile traffic afforded by existing developments provides immediate demand for new operations. The existing transportation and utility infrastructure is also attractive to commercial and industrial tenants looking for the advantages of growth-driven submarkets.
Labor and Materials Availability
Another advantage of existing developments is the access to an established labor force for construction and operations. New development necessitates the import of labor and materials from neighboring communities and regions, incurring additional transportation, housing, and travel expenses, wasting money, fuel, and creating excess pollution. Attracting and maintaining a qualified and reliable labor force is a key challenge for nearly any business looking to relocate to a new market or community. Developments that offer prospective tenants the greatest access to needed resources will experience the highest demand and command the highest lease rates. Existing developments shorten recruiting times and provide access to ample skilled labor.
Selecting a strategically effective location for your development will allow the venture to be completed in the shortest time-frame and generate the highest returns. Choices that are beneficial for the environment also provide financial and operational benefits for developers and business owners. Existing developments reduce construction and renovation costs and result in less carbon emissions and waste: a mutually beneficial approach for investors and natural habitats.
House flipping has become a great way for thousands of real estate investing entrepreneurs across the country to build income, grow their portfolios, and save money for retirement. Of course, there are as many ways to find your next fix-and-flip property as there are fix-and-flippers, but one way to get into the fix-and-flip game and save money is to invest in an abandoned home.
The pros and cons of investing in abandoned homes are many. Let’s look at the pros first.
Pros of Fix-and-Flipping Abandoned Homes
One of the biggest advantages to investing in abandoned homes is the acquisition cost. If you buy a home that has been recently occupied, it has likely been kept up fairly well. The better the condition of the home when you buy it the more you’ll have to pay for it and the less return on investment (ROI) you can expect to get on the back end. So abandoned homes make great opportunities to bank on a high ROI.
Another advantage to fix-and-flipping an abandoned home is that it can be easy to identify the necessary fixes. In many cases, there are a lot of fixes! The danger is that you may have larger problems that will cost a lot of money.
One major advantage is the difference it makes when your project is completed. An abandoned home, especially one that has been vacant for a long time, can be turned into a marvelous before-and-after story. When your project is finished, you’ll be able to see the stark contrast between the run down version of the house before your rehab and the makeover you gave it. If you’re able to pull it off, you should have no issues selling the house and the new owners will have a lot to brag about. It could even raise the values of other homes in the neighborhood.
Cons of Fix-and-Flipping Abandoned Homes
While abandoned homes can be great opportunities, they can also be huge problems to fix and flip. You have to be careful to crunch the numbers and make sure your investment is worth it before you buy the house. Some common issues you might run into include finding a clear title or path of ownership, hidden problems that aren’t noticeable on first inspection, and major rehab issues that will cost more to fix than the property is worth ensuring that there is no way to profit.
It is important to perform due diligence on any property, but it’s doubly important for abandoned homes. That’s because there could be some major unknowns. If you run into titling issues, try to resolve them as quickly as you can. Otherwise, you could find yourself stuck with a fully rehabilitated home that you are unable to sell, or that costs you money in holding costs.
With an abandoned home, you need to look it over with a fine-tooth comb before you even consider buying it. Check to ensure there are no foundation issues. Have a plumber examine all the pipes and drainage in and around the house. The same for electrical. If possible, look into the attic, and make sure there are no major roof issues. Get a good estimate of repairs before you make an offer and calculate your after repair value (ARV) so that you can make the right offer. Be prepared to spend more money on the rehab than you do on the property acquisition as that is quite common.
Plan on contingencies. The likelihood that you’ll have them with an abandoned home is very high. For that reason, most investors recommend a fudge factor of 15% to 25%. After calculating all repairs and acquisition cost, add your fudge factor to the final sum to take care of those necessary contingencies.
Good Luck With Your Next Abandoned Home Fix-and-Flip
Abandoned homes can be great fix-and-flip investments, but you must enter into them with eyes wide open and leave no stone unturned when calculating your repairs. Remember, you make your money when you buy. Make sure you have an exit strategy.
With compact real estate on the rise, it’s important for investors to figure out how they can create that “open and airy” experience no matter how small a room might be. Staging a small apartment can be a challenge, but it is possible with careful planning.
NYC real estate staging techniques can help sellers to transform their properties on a budget by making the most of the space they do have. Whether it’s getting rid of any sign of clutter, or investing in multi-functional furniture pieces, here are a few tips to help with selling a small apartment.
1. Get Rid of Any Clutter
Successfully staging a small apartment starts with getting rid of clutter. Excessive amounts of clutter can overpower the square footage in a room and make the property look smaller. Items on display that don’t contribute to the overall feel of a room need to be discarded to make way for more natural, open space.
2. Choose the Right Colors
Most people already know that softer, light shades make a room feel bigger and brighter, while dark warm colors help a space to feel intimate and cozy. Light colors are reflective, which maximizes the effects of natural light in an area. For those who want to stay away from boring shades like white and brown, NYC real estate staging experts recommend sticking to monochromatic shades in the same family, with tone-on-tone upholstery fabrics and textured wall finishes.
3. Incorporate the Right Flooring
There are plenty of different flooring styles that can help to define space when staging a small apartment. A good way to open a floor plan is to use the same type of flooring from one area to the next to create an uninterrupted flow of color. This can make rooms feel as though they’re part of one larger space. A round rug can also be a good choice for smaller spaces, as rectangular shapes can make areas appear more cluttered.
4. Use Multi functional Furniture
Even if a buyer isn’t selling a small apartment with furniture provided, they can use the right pieces to demonstrate how a buyer might be able to keep their belonging stored safely in a smaller space. To utilize the space in a smaller room as much as possible, consider decorating with furniture that can serve multiple purposes at once. For instance, a trunk could double as an end or coffee table. An ottoman could act as a chair or a foot rest, as well as a storage space.
5. Utilize the Ceiling
Finally, when it comes to making the most out of NYC real estate staging in smaller apartments, it’s important to remember the value of the ceiling as an additional space. A small band of molding about a foot away from the actual ceiling can make the room appear bigger. The paint above the molding should be a lighter color than the paint below, to give the space a sense of depth. Additionally, storage solutions can be hung from the ceiling to leave extra room around the walls.
Real estate rehab is a great investment strategy for real-estate experts. This strategy involves combining financing, maintenance, construction, and interior design together to achieve the highest return on any property investment. It’s a clever way for real estate moguls to earn some passive income, and it can also be a fantastic opportunity for those who want to expand their real-estate portfolio.
Rehabbing a home has plenty of unique benefits to offer, but like anything in life, it also comes with its own fair share of risks. Since savvy investors prefer to learn from the mistakes of others, rather than make their own, we’ve put together a list of some of the most common rehab pitfalls investors should try to avoid.
1. Hiring the Wrong Contractor
The foundation (literally) of any successful rehab project begins with hiring the perfect contractors. A contractor will be your eyes and ears on the ground of the project while investors are dealing with other concerns. They can help to protect borrowers from cost overruns and keep the timeline on track too. Additionally, contractors can also offer experienced advice on best practices for the rehab process.
2. Being Financially Unprepared
While real estate investment can be a highly profitable adventure for many people, it’s important to remember that all investors must have the right assets in place to help them get started. To make money with real estate, an investor first needs to put some money in. Those who are unable to make ends meet will need to seek the support of a reliable peer-to-peer lending strategy.
As with most things in the business world, there’s a fine line between taking calculated risks and making careless decisions. Investors who are in a tricky spot may need to consider how they can cut costs by buying a cheaper property, for instance.
3. Not Knowing the Area
When a property professional purchases a home for a rehab project they commit not just to the structure, but to the neighborhood too. Spending too much time and money on flipping a property that isn’t in a good space could mean that borrowers have a hard time making their money back.
Often, real-estate investors will need to think about speaking to people in the local area, looking at crime rates, and finding school ratings to determine how profitable their chosen area might be.
4. Skipping Essential Upgrades
The key to a great rehab project is spending as little money as possible, while making a big profit. To save money, some investors find themselves feeling tempted to cut corners or only make minimal changes to keep expenses low. However, this is a common mistake. Remodeling bathrooms and kitchens aren’t projects that should only be half-done.
Popular upgrades in a home can make or break a real-estate investor when it comes to making a sale. While it’s important to think about financial restrictions and keep to a pre-established budget, entrepreneurs in the property rehab space need to be ready to take the right steps to make their house sell.
5. Not Having a Plan B
Life is unpredictable, and a property investor’s life can change within a matter of seconds. That’s why it’s so important for individuals to make sure that they have a plan B in place when a rehab project doesn’t go the way they had originally hoped.
Real estate investment can be a lucrative and exciting venture – but it has its risks. When it comes to rehab projects borrowers can improve their chances of making a return on their investment by hiring the right contractor, making the perfect renovations and ensuring that they select a home that’s located in the right area.
Renovations are a fantastic way to add value to your property and make it easier to sell on the real estate market. However, paying for a new set of windows, a new kitchen, or a different bathroom isn’t something that works for everyone’s budget. The good news is that there are solutions out there for people who don’t have much money to spend but still want to get the most out of their real estate investing opportunities.
If you’ve recently purchased a property that needs a little extra work, make sure that you consider all your options before you break into your savings. Federal tax credits, marketplace lending, and other solutions all exist to make your life a little easier.
Special Credits for Certain Renovations
Depending on what kind of home renovations you’re planning on making, you might be able to transform your property for free with the help of government grants and tax credits. Examples of improvements that can be included in the tax credit group for federal systems include:
- Central air conditioning
- Roof repair or replacement
- Replacing windows and doors with U-Factor and SHGC factors less than 3
- Water heaters
Additionally, if you’re interested in making your property more environmentally friendly, there are some states that will offer additional support for alternative energy renovations. For instance, you may be able to get up to 30% off the price of a solar water heater, and 30% of the installation and equipment costs of geothermal heat pumps. Some agencies also provide money off fuel cells for residential areas and small residential wind turbines.
Medical Home Improvements
If you have a buyer lined up for your home, then you could also add some value back into your real estate investing by getting credit for medical home improvements for someone who has a disability. These deductions from your tax return must be itemized. They are required to cost more than 10% of the gross annual income that you report at the end of the year.
Examples of medical expenses might include things like making the home more wheelchair accessible with widened doorways and wraps, One can also move electrical outlets, or install lifts and railings. Because medical improvement grants are so limited, they generally aren’t the best option for people making home renovations for real estate investments.
Other Forms of Lending
Finally, if you’re struggling to make ends meet on your latest project, but you know you need to make some renovations to get the most out of your new property purchase, then you could consider an alternative solution, like marketplace lending.
The MPL borrowing platform offered by Sharestates offers financing for real estate investments. By choosing marketplace lending over traditional loans, you can get access to credit where it was previously unavailable. You can unlock new incentives from an investor perspective. Marketplace lending might not be the right option for everyone considering real estate investing and home renovations. But it’s very much worth speaking to the experts about the options available to you.
If you’re planning on making any renovations to your property this year, there are a few things to consider before you commit to a project. While personal preference and budget will always be important factors when it comes to figuring out what you want to do with your home, it’s also worth thinking about which changes will deliver the best return on investment.
After all, investing in real estate through adaptations to your own home can be a great way to build your asset portfolio, and provide you with everything you need for a successful property sale later in life. According to the recent Cost vs Value Report from Remodeling magazine, some changes can be more valuable than others. Here are just a few options to consider when you want the most bang for your buck.
1. Minor Kitchen Remodeling
A kitchen is one of the first rooms that most homeowners consider when making a renovation. After all, your kitchen can be a place of community, where you bond with your family over breakfast, or chat with friends over a cup of coffee. It can also be a space brimming with creativity, where you explore hobbies like cooking and baking.
However, before you begin tearing out sinks and removing cabinets, remember that the average return on investment for a “minor” kitchen remodel is 81.10%, compared to only 59% for a major renovation. Instead of turning your kitchen upside down, consider adding new counter tops or giving the room a fresh splash of paint instead.
2. Window Replacements
While stunning new bathrooms, living rooms, and bedrooms are all tempting when you’re thinking of ways to add value to your home, remember to consider the functional elements of comfortable living too. A new set of windows can be a great way to make your property more energy efficient, and therefore more appealing to budget-conscious buyers.
The Cost vs Value Report suggests that a window replacement can deliver a 74.3% return on investment. While you’re changing out your windows, you might want to think about siding replacements for the exterior of your home too, as these deliver a 76.70% ROI.
3. A New Deck
It might surprise you to learn that one of the most appealing additions any homeowner can make to their property, is building a new deck. This may be because a deck simply gives your home an extra degree of curb appeal for the modern homebuyer, or it may be that future homeowners simply like to envision themselves sitting outside the home on hot summer days.
Whatever it is that makes decks so appealing, keep in mind that a wooden deck addition delivers an 82.80% return on investment, whereas a “composite” alternative drops the return down to 63.60%.
4. An Upgraded Bathroom
While it might be a good idea to make only minor changes to your kitchen design, renovating your entire bathroom could be a great way to add value to your home. The Cost vs Value report suggests that a universally-designed bathroom leads to great recoupment costs of about 70.60%. What’s more, a bathroom remodel has a 70.10% return on investment, compared to only 59.90% for a bathroom upscale. It seems that it’s better to go big or go home when it comes to bathroom changes.
Smaller Jobs are Often Better
When investing in real estate, it seems that the smaller jobs are often the ones that have the highest return on investment. For instance, while you might recoup less than half of the cost associated with adding a new en-suite to your master bedroom, a garage door replacement delivers a 98.30% return on investment.
The next time you’re thinking of investing in a renovation, start with the small projects first.
The Atlantis Organization and Sharestates have partnered up again this year for the 4th Annual Charity Poker Tournament. With over 100 attendees, last year’s event brought in over $20,000 to the Sunrise Day Camp and The Friendship Circle.
The Sharestates and Atlantis Organization teams will match up to $50,000 of the total amount raised for the Sunrise Day Camp. The mission of The Sunrise Association is to bring back the joys of childhood to children with cancer and their siblings world-wide. This mission is accomplished though the creation of Sunrise Day Camps, Year-Round Programs and In-Hospital Recreational Activities, all offered free of charge.
More About the 4th Annual Charity Poker Tournament
The 4th Annual Charity Poker Tournament will be held at the Temple Emanuel of Great Neck on April 25, 2017. There is limited seating, and a 7 pm Winner. The poker buy in is $150 and spectator suggested donation is $100. Prizes will go to final table. Dinner and drinks will be provided. Texas Hold’em first hand will be dealt at 8:30 pm.
- When: April 25th, 2017
- Where: 150 Hicks Lane, Great Neck, NY 11024
- Time: 7pm
Sunrise Day Camp
Raymond Y. Davoodi of The Atlantis Organization is quoted as saying “Our Organization is very dedicated to the Sunrise Association – we attend all their functions, we make Sunrise the leading beneficiary of our charity fundraisers, and our family donates every year. Aside from our financial contributions, The Sunrise Annual Kids Day is one of our favorite days of the year and the kids at the camp look forward to it as much as we do – it is fulfilling beyond words. This organization is led by people like David Miller and Beth Fetner who give selflessly, and are leaders in our community in every way. We are proud to support them and the Sunrise Association. Let’s do this for the kids!”
More about The Sunrise Associations
Sunrise Day Camps are the world’s only dedicated day camps for children with cancer and their siblings, provided completely free of charge. They have been providing memorable summers since 2006 for children ages 3 1/2 to 16, Sunrise Day Camps bring the simple pleasures of childhood back to children struggling with cancer, changing months of loneliness and isolation into summers filled with sunshine, laughter and happiness. And because Sunrise is a day camp, it does all this while allowing the children to continue their medical treatment and enjoy the comfort and safety of their own homes at night. There are currently seven Day Camps – three in New York, three in Israel and Horizon Day Camp in Maryland. Sunrise Association Day Camps are affiliated with 30 renowned hospitals and medical centers. Sunrise Sundays and Fun-days offer children exciting activities and events when school is not in session; Sunrise on Wheels is a one-of-a-kind program that provides hours of Sunrise-fun to children undergoing treatment in pediatric oncology units of participating hospitals.
Sunrise Day Camps are proud members of the Sunrise Association, whose mission is to bring back the joys of childhood to children with cancer and their siblings world-wide, through the creation of Sunrise Day Camps, Year-Round Programs and In-Hospital Recreational Activities, all offered free of charge.
More about The Friendship Circle
The Friendship Circle’s mission exists to bring happiness and companionship to children and young adults with special needs by celebrating their individuality, as well as bring energy, support, and peace of mind to their families. To do this The Friendship Circle focuses on developing the values of altruism, compassion, and acceptance in our teen volunteers as we heighten community awareness and sensitivity and encourage a sense of responsibility and involvement.
There is no doubt that 2016 was an amazing year for Sharestates; with company growth from 3 to 40 team members, and booming business it’s been a year to remember.
2016 was our best year yet! In addition to company and platform growth, our investors enjoyed zero loss of principal and net annual returns of 11%. Here are some of our highlights:
Raised Over $100 Million Through Online Platform
Sharestates kicked 2016 off with a major announcement, in March 2016 the crowdfunding platform raised over $100M from individual and institutional accredited investors online. Sharestates made headlines along with this announcement as the company released that about 80% of Sharestates crowdfunding dollars come from investment funds and 20% came from more traditional crowdfunding investors. Thanks to Sharestates underwriting experience and selectivity, Sharestates investors have lost none of their principal investments. Our industry peers and supporters have also helped Sharestates achieve this milestone through their commitment and tenacity.
Exceeded $1.3 Billion in Capital Commitments
In September, Sharestates raised $1.3 billion in committed capital for the purchase of loans. According to Sharestates CEO and Co-founder, “The process to onboard these funds was extremely difficult – requiring multiple site visits, third party reports, and vetting of our entire operational process from application to post closing practices.”
Series A Funding Round
As of November, Sharestates started a Series A funding round on SeedInvest. Our goal is to raise $1.74 million which is part of a $3 million preferred equity funding round. With this opportunity not only can people invest in our projects but also our company itself. The Series A will help Sharestates grow and form a foundation for upcoming years.
Over 220 Million Originations
Sharestates hits the mark of $220 million originations which means that we have more capital to put towards our real estate projects. The total number of projects that were funded in the past twelve months is a soaring number of 175 projects. Most of the projects that were funded are located on the East Coast, but Sharestates can fund projects as far West as Illinois. The average Sharestates loan size over time is $728,000.
Sharestates Gives Back
In addition to company milestones, Sharestates is honored to have been able to give back. In the month of December, Sharestates gave over 500 turkeys, hats, gloves, and scarves to two special communities. The giving didn’t stop there, Sharestates also conducted a holiday toy drive and donated toys to the children of a local Synagogue.
As we wrap up an amazing year, we are grateful for our client base and supporters as well as our Sharestates team members. Sharestates is a company that is transforming the world of real estate investing; we are lucky to have a team that is eager, ambitious, and hard working.
Sharestates is excited about the new year and the opportunities that 2017 will bring. The future is bright, and we are looking forward to bringing our users, supporters, and community better opportunities.
Having trouble committing to your budget? You started off the year with some pretty specific goals like losing 15 pounds, being more creative, and saving money. So, how is that going? You know that saving money is a good thing — you even read articles on the most efficient saving habits ;and you have created around 20 different budgets throughout the years. But, have you found the best habits for better budgeting?
Simple Tips For Better Budgeting
Each time you create a new budget you say “this is it, I can commit to this!” and after one too many fun (read: pricey) evening out, or trendy new items impulsively bought, you break budget and feel defeated. Sticking to a budget does require discipline and dedication, but never fear we are here to help! Apply a few of these money saving tips to your budget and watch your savings account increase while your financial concerns slowly decrease.
Create an Untouchable Savings Accounts
Create a separate bank account that is saved only for extreme emergencies. The goal is that this account will have enough for you to live off for 1-2 months, should something unexpected happen. The funds in this account are to be reserved in the event that an income stream is lost, or a major illness befalls you or a family member. You want to avoid using this for slight inconveniences like car problems or last minute expenses. Experts recommend choosing an account that has little to no fees and a high yield. Here are some examples:
This leads us to our next point.
Account For Unexpected Expenses
Having a regular savings account with an emergency fund is a good idea for covering last minute expenses that always seem to come up. Covering the cost of an unexpected car problem or any other expense that you did not predict in your monthly budget is the purpose of this account. You have a bitmore liberty to access this account in the case of emergency unlike your untouchable account which is reserved for extreme situations. This account should have a steady percentage or dollar amount being deposited each month to help you keep it topped up. Your current bank should offer savings accounts with your checking accounts, so do speak with your bank representative to find out more.
Planned Recreation Makes For Better Budgeting
Seems counter intuitive, right? But it works. Decide which social events you want to attend most, and plan how much you will have to spend for each. In most cases, shopping and social activities are the biggest culprit in breaking budgets. For this reason leaving some extra wiggle room for these activities will help you succeed.
Pre-budget for travels as well. Try to go into the year knowing which vacations and work trips you will be attending, then plan for some spontaneous trips. This will help you to be better prepared financially to fund your adventures. Of course this isn’t fool proof you will have to rely on some personal restraint and discipline, but we believe you can do it! Having money allocated towards fun will help in two ways:
- You won’t feel as if your budget is all work and no play. This feeling of being trapped by the mundane is most often to blame for random splurges. Setting funds aside for recreation gives freedom when budgeting.
- It will eliminate the guilty feelings after a night out.
And the last thing to consider…
Keep Visual Reminders Around the House
What are you saving for? Retirement, a new home, new car, children, travel? It can be tough to commit to a savings plan when you have no reminders of why you’re saving in the first place. It is difficult to fight the carpe diem philosophy with no savings philosophy of your own. This is when your arsenal of visual reminders comes into play.
There are several creative ways to keep your spending and saving goals visible: vision boarding, post-it notes on the bathroom mirror, affirmations and reminders on your phone. Reminding yourself why you are saving in the first place is a powerful thing because it keeps the end goal at the forefront of your vision. Your visible savings goals may also prompt you to act more aggressively when you have the means to save more.
One of the biggest misconceptions about saving is that a person needs to be over a certain income threshold in order to save. Saving is related to income vs expense, not just income. With nearly any income a person can add to their savings by finding creative ways of cutting expenses. When creating a budget, keep in mind that this is for your benefit. Saving for big purchases is an attainable goal. You are going to have to make sacrifices and may spend some weekends at home with Netflix, but when you realize your goals it will all be worth it!
We all know that portfolio diversification is of more benefit to an investor than the safest single investment. Yet, finding the perfect portfolio balance will vary from investor to investor depending on preference. Making it harder for newbie investors to find their personal investment sweet spot—as relaying on financial advice can be just as risky as trial and error. Key contributing factors of portfolio diversification are risk tolerance, investment motivation, and total investment.
Traditional Real Estate Investing
Traditional means of real estate investing worked for previous generations, yet it was not without its flaws. We have all heard it before that breaking into real estate investing is much like breaking into the ‘old boys’ club. Beyond the difficulty of getting past the threshold, traditional real estate investing can be taxing on time and resources. Owning investment property will require an investor to spend a bulk of their income on upkeep and renovation. On the other hand, finding a quality project to invest in can be impossibly difficult. This is where RECF comes in.
Real Estate Crowdfunding as a Means of Portfolio Diversification
There is no doubt that real estate crowdfunding is the go-to way for new investors to expand into real estate. Investment security, simplicity, and transparency are three features that all 21st century investors are looking for, and rightfully so. Most real estate crowdfunding platforms meet these expectations, which is why they have gained so much attention in the last 2 years. Let’s consider the three reasons why RECF is the perfect way to achieve diversification for those looking to invest in real estate.
- Transparency— Real estate crowdfunding has the unique investor benefit of low fees. Lower fees mean higher returns. This is possible due to the elimination of the ‘middle man’. RECF platforms understand that a streamlined investing experience is superior to an investment journey muddled down with endless fees, brokers, and intermediaries. Real estate developers are connected with investors with nothing in between but the platform itself.
- Low Investment Minimums— Most real estate crowdfunding platforms open their investment properties with investment minimums starting at $5,000. Sharestates.com is one of the few platforms to offer access to investment opportunities starting at $1,000.
- Great wealth transfer— Millennials are the largest generation living and will be the recipients of the $30 trillion left behind from the Baby Boomers. Everyday banks, apps, and FinTech platforms are redesigning in order to meet the needs of Millennials. RECF is another wave in this shift that is here to stay, with over 14% of Millennials already using alternative non-bank financing.
Why Real Estate Crowdfunding Should be Your Next Asset Class
If this still is not enough to convince you that now is the time to consider investing in real estate crowdfunds, we have a comprehensive white paper explaining in further detail the benefits of RECF. As a new or seasoned investor, understanding the complexities of real estate investing prior to investing in critical.
Download the white paper today to get a better understanding of the changing lending market.