Using a real estate crowdfunding platform enables you to leverage the crowdfunding site’s due diligence resources, allowing you to invest even more passively than ever before. See how investing in syndications can be simplified. Review the list of crowdfunding sites at the end.
A real estate syndication business plan outlines how your investment will grow. Learn how returns are generated, preferred rates of return (if any), predicted profits at sale, use of funds, as well as overall plan of things to improve in order to force the value of the property higher. Topics include acquisition, improvements, holding period, refinancing, disposition or sale of the property.
Forced appreciation is the increase in the value of an investment property due to an investor’s actions, in this case, making it more profitable. Contrast this with natural appreciation, sometimes called market appreciation, where uncontrollable (by the investor) market forces are at play.
A preferred return is a return that puts you, an investor, in a preferred position when it comes to profit distribution of a project’s cash flow. Money goes to you first when there is a distribution, and until the hurdle of the preferred return is totally met, the syndicator gets nothing. A preferred position is first in line. If a project doesn’t make any money, chances are that you will not receive a return.
Passive real estate investments are automated income streams that do not have any associated management responsibilities. One of the main differences between passive and active real estate investing is the amount of continuing effort involved to sustain the health of the investment.