Crowdfunding has become a popular Internet buzzword lately, but what does it mean? Essentially, it’s the concept of pooling vast resources together to make something happen. Sometimes that’s a fun project on Kickstarter or for a philanthropic cause on GoFundMe.
In our case, we use crowdfunding to make money for our investors. By bring together investors who are looking to own real, tangible assets: property. Crowdfunding real estate isn’t a new concept, but in 2012 real changes because of the JOBS Act have made it possible for us to connect more easily with potential investors. Here are some reasons crowdfunding works with real estate.
1. Crowdfunding opens more opportunities
There are countless real estate opportunities available every day, but if you invest your money in a REIT (real estate investment trust) or other similar investment vehicles, you’re bound by the parameters of that company. Perhaps they only invest in a particular type of property because that’s what the management understands best, and ignore other profitable assets. In our case, we have our eyes looking at all opportunities and evaluating them on a risk adjusted return basis.
2. Investors access the market with smaller amounts of money
It’s no longer necessary to put out large sums of cash and take on enormous risk by buying your own property. Investors can access the growing real estate market in the country with smaller investments and leverage the proceeds into further investments.
3. Crowdfunding helps you gain access to deals
By pooling your money with other investors together and operating under a professional real estate firm, you let us do the leg work and deal with tenant issues and you just collect the checks. Mascia Development is able to work with investors investing as little as $5,000 by leveraging Crowdfunding technology to lower the cost of administration. This means you now have access to investments that were previously only available if you invested $100,000 or more.
4. Crowdfunding lets investors have a say in the project
Unlike purchasing a real estate index fund or REIT, you can have a say exactly where your money is invested.
Through a crowdfunding arrangement, you decide how to invest on each property. We show you possibilities and offer our advice, but ultimately you are in control of your financial destiny.
5. Crowdfunding helps you spread your risk
Diluting risk is an important component of any investment strategy. Intelligent investors understand the stability of investing in multiple opportunities. By pooling your money with other investors and buying into multiple properties, you’re diversifying your assets and protecting yourself against any losses. Rather than investing 100% of your money in a building in Dallas, it’s better to invest a third in that building, a third in one in St. Louis, and a third in one in Tulsa.
Crowdfunding real estate is available to you now. Sign up for more information.
Written by Mark A. Mascia, President and CEO of Mascia Development
Mark manages the investment and operating activities of Mascia Development, a diversified value real estate investment firm that acquires, owns and manages retail, medical office, family offices, multi-family, and industrial real estate properties in the most promising long term growth areas nationwide. Through crowdfunding, they create powerful real estate opportunities for high net worth individuals.
A fully integrated real estate company, Mascia Development has in-house capabilities in acquisitions, financing, re-development, and construction; and their principals have experience in property and portfolio management, leasing, and maintenance.
Mark has a strong career in real estate, previously managing a property of portfolios valued over $1.1 billion. Mark has worked at Archstone-Smith (a former publicly traded REIT) and Monument Realty, one of the largest office real estate developers in the Washington, DC metro area. Mark teaches real estate development and finance at New York University.
For more information, visit www.masicadev.com.
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