Crowdfunding

30
Jul

Understanding and mitigating risks in real estate crowdfunding

As with most investing activities, real estate crowdfunding carries the principle of risk-return tradeoff, in which risk increases with the rise of possible returns. In other words, risk is the price of desire and ambition to magnify the profit potential. If larger amounts of money were invested in a venture, in view of making bigger profits, there would be substantial […]

30
Jul

Property classes

Real estate assets are generally classified as residential, commercial, and industrial. Residential real estate can take the form of single-detached units, terraces (also called row houses or linked houses), apartment complexes, condominiums, or structures meant as homes and dwelling places. It also refers to the land on which residential structures are built, or will be built in the future. Commercial […]

30
Jul

Loan investments

In real estate, loan investments pertain to debt-financed initiatives. Developers or property managers raise capital by borrowing money from individuals or companies, with the promise of interest on the prinicipal amount. To pay the interest at the agreed time, these borrowers will have to sell or lease the property, and then profit from the transaction. Part of the profit should […]

30
Jul

Cash-flow investments

In real estate, cash-flow investments pertain to properties that generate regular income, such as hotels or leased buildings. There is a steady stream of yields, thus the term cash flow. An example of this in the traditional context involves the “condo-hotel”, an apartment building that is projected to function as a hotel. Here, investors buy entire units in the building, […]

30
Jul

Good practices in real estate crowdfunding

Every real estate crowdfunding site has a policy based on applicable laws, and on good practices (GxPs) that pertain to quality and ethical industry standards. The idea of GxPs is to keep integrity intact as the business flourishes, and ensure that all stakeholders benefit as they should. The core of GxP in real estate crowdfunding consists of the following: Transparency […]

30
Jul

The investment process: How real estate crowdfunding works?

The most simple explanation for real estate crowdfunding is the undertaking of a collective financial-backing effort to complete a property venture successfully, and have stakeholders profit from the activity. The key players are: Online real estate crowdfunding platform Developers, property managers, project operators Investors. Online platform. This is the “virtual venue” or digital marketplace where the entire crowdfunding process takes […]

30
Jul

Real estate crowdfunding: The new-day syndication

Property development is a capital-intensive venture that requires funding, from the time an idea goes on the drawing board until turnover. Because of this, investments are sourced from a host of interested and financially capable parties. The pooling process is known as syndication, in which participants or investors infuse their money toward a two-pronged goal: to contribute to the success […]

30
Jul

Tax benefit for investors

Crowdfunded real estate projects are passive investments that have benefits, including tax shelter offsets. Methods of reducing tax liability depends on the tax regime of the country where an investor files taxes. Every investor is encouraged to consult with a certified advisor for a full explanation of the tax implications and extent of liability, and to learn how tax benefits, […]

30
Jul

Fees incurred when investing

Crowdfunded real estate investments carry attendant fees, including online-platform charge fees, to cover administrative and operating costs. These are reasonable amounts that pay for running the digital marketplace, conducting due-diligence efforts, reporting and documenting transactions, and facilitating investment distributions. Charges to investors are sometimes called acquisition fees; that is, the fee charged for staking a claim on the investment opportunity, […]

30
Jul

Comparing the HBR portal to UAE government initiatives

The HBR portal is in consonance with the UAE’s vision of a rebuilt and fortified property market, especially in Abu Dhabi and Dubai where projects suffered badly during the financial crash between 2007-10. But while its goals are complementary to government targets, the HBR portfolio does not deal with the rehabilitation of stalled off-plan properties. To explain, an off-plan project […]