The United States recession of 2007-2009 spawned an investment phenomenon as people looked for new sources of income. People began purchasing undervalued homes amid a nationwide real estate crash and renovated and flipped them to new buyers.
Many still flip houses today, but significant cash investments are needed, and returns are predominantly dipping. Enter Fund That Flip, a company streamlining its customers’ real estate investment process and specifically servicing passive investors. Fund That Flip has also allowed more people an opportunity to invest by lowering minimum investment amounts. Through the company, it is now possible to invest in pre-vetted real estate projects with as little as $1,000, when most passive investment opportunities have historically started from the $50,000 investment size. Fund That Flip also thoroughly diligences each loan, with less than 8% of applicants approved for funding.
See also: Real Estate Investment Companies
Fund That Flip has taken the administrative legwork out of passive real estate investing, working with thousands of developers who renovate and build new homes using money from accredited investors at 8% to 12% interest. A national company with offices in New York City and Cleveland, Fund That Flip provides pre-vetted real estate-backed loans to accredited passive investors who could earn annual returns on investments as small as $1,000.
The company allows investors to purchase fractional shares of the loans they originate, offering an online platform providing a transparent investing process that allows them to build their portfolios. The smaller investment minimum allows Fund That Flip customers to diversify in projects, borrowers and geographies quickly. Unlike other crowdfunding platforms, it also provides all underwriting and due diligence information to investors before investing.
One of the things Fund That Flip does not have to do is convince its investors of the benefits of holding real estate in their investment portfolios. But now, real estate crowdfunding has changed the game for many investors, allowing them to gain access to a desirable asset class from their laptops and smartphones.
One of the crucial distinctions for individuals investing in real estate online is understanding the difference between debt and equity financing. In debt-based crowdfunding, also known as debt lending, an investor invests in a type of security. And debt investments are generally considered less risky than equity investments because they are secured by the 1st-lien position on a real asset.
Many investors are familiar with the real estate investment trust (REIT) concept that allows investors to invest in real estate without buying actual property. REIT structures can require higher maintenance costs and fees, with many of the expected profits going to the portfolio managers instead of the investors. But real estate crowdfunding offers investors the ability to diversify their portfolios by pooling capital with other investors. That’s why Fund That Flip can provide investment opportunities for as low as $1,000.
For more information on Fund That Flip, go to www.fundthatflip.com.
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