RealtyShares Review And Things You Should Know!
Real Estate has remained one of the most lucrative investment options in the investment world. However, crowd funding, lately, has become a successful mode to fund and start projects which lack financial backing. Whether it’s a new IT product or a new manga book, crowd funding has started and rescued several promising projects. So, it was about time that crowd funding came to real estates. RealtyShares is one such site that boasts crowd funding for real estate projects, which show promise with healthy returns. But is it any good? So, let’s find out in this RealtyShares review! Do you know What Is The Best Way To Invest $10,000?
Table of Content
RealtyShares is an online investment platform specializing in real estate investments. The platform brings together sponsors, borrowers and investors and provides a conducive environment for the whole transaction.
RealtyShares’ main target is smaller investment plans like single-family house flips instead of the commercial and large apartment building investments.
What sets RealtyShares apart from real estate investment trusts (REITs) and other real estate investments is that a person can choose to invest in a group of properties or a single specific property.
What’s the criteria for the selection of projects?
RealtyShares thoroughly vets all the investments offered on the site. And only 5 percent of all the applications received for finance gets approved.
The applicants are prequalified depending on their previous track records and financial strength.
RealtyShares helps investors by reviewing the investments strategy, financial and legal standing. They also check the location and condition of the property.
After the properties have been approved by RealtyShares, they are available on the site for users to browse.
Investment Options for investors
As an investor, a person has two choices: Debt investment and equity investment. Do you know How To Get A Credit Card Limit Increased For Chase Bank?
In debt investment, the investor’s money is given as a loan to the company handling the project. Investors earn profits on the interest charged. These investors serve as a bank, indirectly lending money to a real estate company. When you have some spare money, you always have a few options. So, What’s The Better Option: Pay Off Mortgage Or Invest?
The loan is often given for a 12-month loan-period and is secured by a mortgage or a deed of trust. Investors opt for these sorts of investments because they offer low risk. But that also means it has shorter terms and smaller returns.
With equity investment, investors get indirect ownership of the project. Therefore, they become a part of project’s excess cash flow and any appreciation gained at the time of sale.
Equity Investments are generally for a longer period (3-5 years) as the projects need a lot of renovations by the sponsor. They often involve quarterly cash flow distributions.
Single Family Rental Property
When investing in single family homes, investors get a first position on the claim. The general target return is around 9-11% annually. The investment term lasts between 6 to 24 months and is paid monthly. Single Family is one of the least risky and the majority of investments fall in this category.
Preferred Equity/Mezzanine Debt
Preferred Equity offers a bridge loan for sponsors. The investment period, in this case, is between 2-3 years and mostly for commercial property. The target rate of return is 12-14%.
Joint Venture Equity
Joint Venture Equity turns an investor into an equity owner alongside the sponsors. Hence, an investor shares the profits when the preferred returns from the investment are reached. The target return in this case is 10-16% annually. The investment period is between 3-5 years.
RealtyShares is a great platform when it comes to both investing and starting a real estate project. The returns are amazing and give you an open environment to converse with the sponsors.