Life of a Crowdfunded Real Estate Investment

BEVERLY HILLS, CA-The recent movement toward online “crowdfunding” has begun to make private real estate investment opportunities more accessible to investors. The industry is still young, though, and since these are private transactions not involving publicly-traded securities, many potential investors are unfamiliar with how the process works.  What is the life of a typical investment?

At Realty Mogul, for example, the process starts with a sponsoring real estate company bringing us a potential project that will need additional equity financing; the sponsor typically obtains some debt financing and also invests a significant portion of its own funds, but there will still generally be a need for other investors to complete the necessary funding.  We’ll be contacted at around the same time that the sponsor has put the property under a purchase contract – the sponsor will likely have about 60 days in which to complete its own due diligence on the property and to close on the purchase.