Commercial Real Estate Crowdfunding Provide Investors with New Ways To Create Long Term Wealth

By Jeremy Biberdorf, ModestMoney.com

In 2012, the U.S. Congress passed the JOBS Act. The Jumpstart Our Business Startups Act, or JOBS Act, is a law intended to encourage funding of small businesses in the United States by easing many of the country’s securities regulations. It passed with bipartisan support and was signed into law by President Barack Obama on April 5, 2012.

Title III, also known as the CROWDFUND Act, has drawn the most public attention because it creates a way for companies to use crowdfunding to issue securities, something that was not previously permitted.

Title II went into effect on September 23, 2013. On October 30, 2015, the SEC adopted final rules allowing Title III equity crowdfunding.

These rules went into effect on May 16, 2016; this section of the law is known as Regulation CF. Other titles of the Act had previously become effective in the years since the Act’s passage.

Since then, real estate crowdfunding platforms have popped up everywhere. The concept has not only provided investors with another avenue to diversify their portfolios, but it has made the concept of investing in real estate easier and more affordable.

Among the many platforms, one of the key leaders is EquityMultiple. To learn much more bout EquityMultiple, just get an EquityMultiple Review now! They will help you find out if this investment is the right platform for you.

So What Exactly is EquityMultiple?

EquityMultiple is a real estate investment crowdfunding platform founded in 2015 by Charles Clinton and Marious Sjulsen. Before EquityMultiple, Charles was a real estate lawyer, and Marious an experienced veteran in the real estate private-equity markets.

Today, EquityMultiple is a leader in the commercial real estate investment crowdfunding platform arena. And it is backed by a national real estate capital markets firm.

EquityMultiple offers clients access to equity and debt. They even offer access to preferred equity deals.

So How Does It Work?

Well, EquityMultiple is focused only on commercial real estate offerings. For debt deals, they work only with experienced lenders. For equity deals, they only take compensation of 10% of project profits. The compensation is taken after the full initial investment has been returned to investors.

So for each investment opportunity, EquityMultiple creates a unique LLC exclusive to that specific deal. When a client invests, what they are actually doing is buying an ownership stake in that specific LLC deal. In other words, they are LLC members (owners).

When selecting properties, EquityMultiple looks for the following criteria:

• Commercial properties in growing markets with current cash flow
• Short-term loans with strong APR to investors
• A solid forward-looking exit strategy
• Value-add projects with construction elements
• Ease of Sign-Up
• Automated Process via the website.

Once a client registers on the platform, they can browse offerings and review investment details. From there, they choose a deal that makes cents. Once they have chosen the deal, they provide banking information for both funding and receiving returns and sign the necessary paperwork.

During this final step, clients need to verify that they are accredited, investors.

EquityMultiple only works with accredited investors. Accredited investors are defined by either having a net worth of $1 million or more, or an annual income of at least $200,000.

What Are The EquityMultple Fees?

There are no fees to set up an account and browse. However, once a client makes an investment, EquityMobile charges a small annual fee which is roughly .05% of the total invested. This fee goes toward ongoing reporting, tax prep, and communications.

As mentioned before, EquityMultiple also takes 10% of the profits from every deal that is paid out AFTER all investors have received their initial investment back.

Minimum Investment?

With EquityMultiple, the minimum investment is $5,000. Compared to other platforms, it is relatively high but, then again, EquityMultiple is only for accredited investors.

While $5,000 is the minimum investment, in many cases, the investment threshold can be higher. It depends on the specific individual deal. Also, if clients want to purchase additional shares in the LLC, then they will have to also pay more.

EquityMultiple also allows clients to make investments through either a self-directed IRA or an IRA from one of their preferred partners. Should a client choose to go the IRA path, the minimum investment is usually $10,000.

Who is EquityMultiple Created For?

EquityMultiple is available to any accredited investor who is looking to invest in commercial real estate. It is very important to be 100% clear that EquityMultiple investments are NOT liquid. This means they are NOT short-term deals. In some cases, it might be years until clients get their initial investment back. This is the nature of successful real estate investing.

If clients have long horizons with serious wealth-building objectives, then EquityMultiple would be the right choice. If not and clients are looking for quick turnaround profits, then EquityMultiple is NOT for them.

Is EquityMultiple Legit?

EquityMultiple currently does NOT have accreditation with the Better Business Bureau. That doesn’t mean that they aren’t trustworthy or legit. All that means is that the bureau does not have sufficient information to issue a rating. The company’s record is clear of any lawsuits or scandals and as of the first of the year and has returned over $176 million to investors.

As is the case with any investment it is important to remember that no investment is a cinch domino and investors must always do their due diligence before investing.

Are You Interested in EquityMultiple After Reading This Review?

If you like what you read in this EquityMultiple review and want to start investing in commercial real estate with EquityMultiple, click over to their website at equitymultiple.com