Investing in real estate can be a lucrative opportunity. Until now, the majority of these types of investments were only available to institutional investors and very wealthy investors. However, thanks to new technology and fundraising methods, real estate investing is now accessible to all accredited investors. If you’re exploring the world of crowdfunding real estate investment platforms, the chances are you’re curious about the industry and its best practices. Below are some of the most popular and most important questions to ask yourself when looking into an investment opportunity.
Vet the Platform
As with any investment, it’s necessary to do your due diligence. Find out as much as you can about how the crowdfunding platform operates. Learn how they handle technical things like the underwriting process.
Learn the Market
Chances are a great investment opportunities will be available in areas you’re unfamiliar with. If you’re not living in the area of the project and don’t know much about the neighborhood, it’s time to do your homework.
What are the Risks and Returns?
Think of risks and returns like a list of pros and cons. If the returns outweigh the risks involved, this may be a very great opportunity to pursue. However, high return often equals high risk. Seriously weigh the two before you begin investing in anything.
Set Reasonable Expectations
Know what to expect. If you go into a deal with unrealistic expectations, you’ll have a disappointing experience or worse, you could lose money. Know what assumptions the platform and sponsor are making. Be certain their projections are in the realm of possibility.
Any type of investment involves some sort of risk. While crowdfunded real estate investment is a fantastic tool for investing, there is still a risk involved. It’s important to know what will happen if something were to go wrong with the project.
Don’t Get Too Emotional
When it comes to investing, it may be difficult to remain unemotional. However, it’s important to view each opportunity with an unbiased eye. If the deal doesn’t make sense or isn’t realistic, walk away. Just because a project is in a neighborhood you’re personally passionate about does not mean that you can ignore unrealistic return projections.
Why work with NashvilleOpportunity?
NashvilleOpportunity’s online real estate crowdfunding platform makes it easy to invest in residential real estate by lowering minimum investment amounts, reducing fees, and increasing returns. The platform provides the ease of browsing, investing, and managing investments online, anywhere, anytime. We have combined our extensive knowledge of real estate with our experience in asset management, consulting, investment banking and technology to revolutionize the real estate industry by making the investment process simple and accessible for you.