Advice and Opinion

3 things you should look for in a real estate crowdfunding platform

By Scott Picken, CEO and founder of Wealth Migrate

Whether it’s tracking steps for a workout or booking a flight online, we’re all aware that technology has made us more connected than ever. However, the “Information Age” has changed a lot more than our fitness routines and travel plans – it has completely transformed how we see the world. Through the invention of online investment tools like crowdfunding, technology has significantly impacted how we interact – both with each other and with our money.

Recently, the international real estate market in particular has been revolutionized by the advent of crowdfunding,
which has brought new life to the industry’s formerly outdated investment practices. Each day, more and more real estate investors are turning towards crowdfunding to conduct their transactions. In fact, real estate crowdfunding
(especially global investment) is the fastest growing segment of crowdfunding, having expanded over 156 percent
through 2013-2014. With the total size of the real estate crowdfunding market now at over $11 trillion, the growth of platforms is radically changing the rules of the real estate game as we’ve known it. By opening the floodgates to market information, online platforms are leveling the international playing field, giving minor league and rookie investors a shot at the big leagues, safely.

However, it’s important to stress that not all crowdfunding portals are created equal. While most are very secure and credible, some platforms can provide inaccurate or dishonest investment information due to either their lack of experience or integrity. And as more real estate investors jump on the crowdfunding bandwagon, it is imperative to know which platforms to pursue, and which to avoid. In order to weed out the bad from the good, you should know exactly what a legitimate real estate platform looks like by fully understanding how one should operate.

Before you make a decision about which real estate crowdfunding platform is best for you, here are three important elements a good platform should provide:

1) Accurate and up-to-date information on the market and investment opportunities.

If you want to see your investments thrive and grow, it’s crucial to gather the most current information about your targeted markets. Real estate platforms should provide constant access to expert information, allowing you to acclimatize to the market’s natural ebb and flow as needed. With a credible platform, you should have access to first-hand data on current market trends to keep you constantly updated on your property’s status and on the market’s current climate. Put simply, the right platform should place you in the right market and connect you with the right information so you can locate and choose quality international real estate properties to invest in, while partnering with the best local partners.

Your platform should also allow you to better plan strategically before making any investment decisions by providing you all the resources necessary to do proper and extensive research. This way, you can prepare to take on any unforeseen situations or market instability. Unfortunately, most people who invest in international properties lose their initial investments because of inaccurate or incomplete information. But as long as you do your homework, it’s easy to dodge the bad properties or partners. A good real estate platform should help investors maximize profit by ensuring they’re informed about investment prospects and aware of the current market trends. “I always say it is about two things to succeed – you have to have the right information and the right partners.”

2) Convenient access to vast opportunity.

In our constantly connected world, we are no longer bound by countries, currencies and economies and as a result, it’s now less about where you live and more about where your wealth lives. By blurring the lines between investors and capital, international real estate crowdfunding platforms have the potential to unleash unlimited wealth opportunities that have since been submerged beneath language barriers, time zones and cultural differences. Global real estate can open many doors for investors to increase their financial wealth through widening exposure to a larger array of markets. And by broadening the overall reach of capital formation, real estate crowdfunding platforms can provide issuers and investors a much-needed source to meet the demands of today’s globalized economy.

That being said, your platform should be able to easily connect you with every opportunity the international real estate market poses by granting you access to an entire network of investors and investment options. Ideally, a real estate platform should also substantially simplify the investment process with a responsive, online support system and an efficient, user-friendly interface. Platforms should ultimately provide a “one-stop” personalized service for you, fusing the convenience of the Internet to the investment process and acting as your go-to source for any real estate information and communication. I also say to people that buying the property is only 1/3 of the transaction. The tax, structuring, compliance is another 1/3 and the ongoing managing and maintenance is another 1/3. You have to make sure that the platform and the partners are providing the end-to-end solution.

3) Thorough background checks on potential investments and partners.

Above all else, a legitimate crowdfunding platform should hail your safety as their chief concern by providing various security measures, such as comprehensive background and security checks. Essentially, an honest platform centers on bridging safety to investment opportunity. Wealth Migrate, for instance, prioritizes risk management by only employing third party appraisers, inspectors and industry experts to inform clients why not to buy a property. We always say, when people are investing internationally their number one concern is safety and wealth reservation. That is why for us it is all about risk mitigation.

For example, before choosing another investor to go in on a property with, a platform should offer you ample resources to make sure you align with partners who are legitimate and well-versed on the global real estate landscape. When transacting in the international market, it’s incredibly important that you choose partners who have a strong global presence and understand each country’s own set of real estate guidelines and nuances. By providing you access to company track records and successful global deals, platforms should help make sure you select a partner who’s established and in it for the long haul. And since time is critical to real estate investment and sound partnerships are pivotal, your platform should be able to keep you up to speed on your potential partners.

At the end of the day, the appeal of real estate crowdfunding platforms lie in their ability to welcome a wider spectrum of players to the game. And as long as you know what the rules are, you’ll find a well-equipped crowdfunding team in no time. So don’t let fear of foul play keep you from your next big win — get informed, suit up and step up to the plate.

After all, who wants to watch everyone hit homeruns from the bench?

Article by: Scott Picken, CEO and founder of Wealth Migrate, a global real estate investment marketplace.


The views expressed in this article are the author’s own and do not necessarily represent the views of Property Wheel