In a Forbes guest post, RealtyShares CEO Nav Athwal debunks four common misconceptions about real estate crowdfunding:
- You don’t really own real estate — you own a share of a limited liability company (LLC).
- It’s not a REIT — unlike investors in real estate investment trusts (REITs), real estate crowdfunders let you choose the individual properties you want to invest in.
- You may actually be a lender — 20 percent of crowdfunded real estate investments have been structured as debt (as opposed to equity), which can involve less risk, but also lower returns.
- It’s not really crowdfunding yet — until provisions of the JOBS Act that would let anyone participate in crowdfunding kick in, most real estate crowdfunding platforms are restricted to “accredited investors” who meet minimum criteria intended to exclude novices.