How to Spot A Bad Deal

LOS ANGELES—Real estate has long held a place in wealthy investors’ portfolios as an asset that can both produce regular income while experiencing capital appreciation. These investors have had access to those “in the know” about these deals and were able to reach the high minimum investment amounts for real estate investment groups. However, with the emergence of crowdfinance and sophisticated online investment portals, the world of real estate investing is now changing.

Since the JOBS Act passed in April 2012 that allows for securities-based crowdfunding and general solicitation of investors, there has been a growing movement to open up previously closed-door investment opportunities to other accredited investors (those who make more than $200,000 annually) and, eventually, to everyday, non-accredited investors. The real estate industry is already seeing the effects of this, with online investment platforms like AssetAvenue, offering high-quality deals, often at much lower minimum investment levels that can attract a broader swath of investors.