Begin to Invest in Crowd funding Investments | MoneyMindz

By | 18/06/2018
Crowdfunding | MoneyMindz

MoneyMindz – India’s First Free Online/On-call Financial Advisory Portal | Crowdfunding

What, According to you, is Crowdfunding?

Asking a couple of people to donate money for a specific cause is what we all know as Crowdfunding[Get Personalised Advice For Crowdfunding –Visit]

What if I say there is more to it?

1. Equity Crowdfunding

Equity crowdfunding platforms assist you to become partial owners in distinct properties and participate with real companies who acquire and redevelop. Dividends are of rental income. [Get Personalised Advice For Equity Crowdfunding –Visit]

There Are Two Types of Equity Investments.

1. Common Equity

You purchase the actual project that is being developed and get percentage ownership of the project. There proportional quarterly and monthly profits. You can select any one. If the project appreciates in value, after its sale you get a portion of the value.

2. Preferred Equity

In terms of risk and order of repayment, this is between common equity and debt crowdfunding. Neither is it as risky as Common equity nor as safe as loans. Fixed returns are paid based on rental income. An investor receives payments monthly but he/she can avail tax deductions too.

2. Debt Crowdfunding

Dividends consist of the income of interest earned from a property or mortgage payments of a portfolio. An investor doesn’t hold any share of the property and he/she doesn’t get additional income at the event of the property being sold. [Get Personalised Advice For Debt Crowdfunding –Visit]

There are two types of Debt Investments.

1. Syndicated Debt Crowdfunding 

They take a part or the whole of an existing real estate loan which is secured and syndicate it out to investors at a fixed return rate. Investors invest in a portion of an existing real estate loan originated by professional lenders also called middlemen and these middlemen give extra security on the loan due to their research on it before approving it. They do charge fees!

2. Platform Issued Debt Crowdfunding

 You invest in a real estate backed loan. The platform is the lender that issues a loan to borrowers. These are generally for “fix and flip” single-family houses that the buyer wants to renovate or resell. No broker is involved in this. Investors invest in loans from the real estate crowdfunding directly by using investor funds.

What is Accredited and Non-Accredited?

An accredited investor is an individual who meets one of these criteria:-

  • Individual income of $200,000+ or joint income of $300,000+ for the past 2 years
  • Individual or joint net worth of more than $1 million excluding the value of a primary residence
  • General partner, director, or executive officer for the issuer of non regulated securities

If you don’t meet the financial qualifications of an accredited investor given, you would be considered a Non-Accredited Investor.

Some real estate crowdfunding sites allow both credited and non-credited investors while others allow only accredited investors.

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