Real Estate Crowdfunding: Pros, Cons, and Predictions for the Future

Nov 13, 2023

Real Estate Crowdfunding: Pros, Cons, and Predictions for the Future

Real estate has long been a favored investment vehicle for many, offering a tangible asset that has the potential for appreciation and income generation. With the digital age, a new method of real estate investment has emerged: real estate crowdfunding. Here, we'll dive into its advantages, disadvantages, and explore where it's headed in the future.

Pros of Real Estate Crowdfunding

Accessibility and Affordability

Traditional real estate investments often require significant capital. Crowdfunding platforms allow individuals to start with smaller amounts, thus democratizing access to the real estate market.

Diversification

Investors can spread their funds across multiple properties or projects, reducing the risk associated with any single investment.

Transparency

Many platforms provide comprehensive information about the property, developer, expected returns, and risks. This empowers investors to make informed decisions.

Passive Investment

Investors can earn returns without the hassles of property management, maintenance, or tenant issues, which are typically handled by the project developers or platform operators.

Geographical Flexibility

Investors can invest in properties across the country or even internationally, without the need for physical presence.

Cons of Real Estate Crowdfunding

Liquidity Concerns

Unlike stocks or bonds, real estate investments are not as easily liquidated. This could mean money remains tied up for extended periods.

Platform Risk

If a crowdfunding platform goes under, it could create complications or losses for investors.

Limited Control

Investors in crowdfunded projects usually have limited say in property management decisions, relying heavily on the platform or project developer.

Market Risks

Like all real estate investments, crowdfunded projects are susceptible to market fluctuations, economic downturns, or local property market dynamics.

Fees

Platforms might charge fees for their services, which could eat into returns.

Predictions for the Future of Real Estate Crowdfunding

As we look forward, several trends and predictions paint a promising picture for real estate crowdfunding:

Explosive Market Growth

Analysts have a bullish outlook on this sector. With expectations that the real estate crowdfunding market in the USA could reach up to USD 869 billion by 2027 and an estimated growth of USD 196.36 billion from 2021 to 2025, it's evident that this method of investment is not just a passing trend but a fundamental shift.

Rise of PropTech Startups

PropTech, at the intersection of property and technology, has seen a surge. The tripling of PropTech startups in the last decade and the considerable funding they've amassed highlights the technological innovations driving changes in real estate.

A Long-Term Outlook

Instead of being swayed by short-term economic challenges, the industry is increasingly adopting a long-term view. This perspective could lead to more stable, strategic investments, offering investors a more predictable and sustainable return landscape.

Enhanced Social Media Engagement

Crowdfunding campaigns are leveraging the power of social media. As platforms increase their digital presence, they'll not only attract a larger pool of investors but will also foster a sense of community among them, emphasizing collective investment goals over individual pursuits.

A Democratized Investment Landscape

One of the most significant shifts will be the democratization of real estate investment. No longer reserved for the wealthy elite, real estate crowdfunding platforms will enable a more diverse group of investors to enter the market, capitalizing on its potential.

Conclusion

Real estate crowdfunding presents a transformative approach to property investment. By breaking down traditional barriers, it offers opportunities for a wider range of individuals to participate in the real estate market. As with any investment, potential investors should weigh the pros and cons, but with the predicted growth and evolving landscape, real estate crowdfunding is poised to reshape the future of property investment in profound ways. To explore these opportunities further, consider visiting landa.app.

Scan to
download

Landa Holdings, Inc. ("Landa Holdings") operates the www.landa.app website (the "Site") and the Landa mobile application (the "App")(collectively, the “Platform”). Landa Holdings manages Landa App LLC, Landa App 2 LLC and Landa App 3 LLC (“Landa Issuers”), and raises funds and facilitates the issuance of shares for the Landa Issuers entities through the Platform pursuant to Regulation A under the Securities Act of 1933 (“Regulation A”).

Neither Landa Holdings nor any of its affiliates are a registered broker-dealer or investment advisor. All securities-related activity for the Landa Entities is conducted through Dalmore Group LLC (“Dalmore”), a registered broker-dealer and member of FINRA/SIPC, You can review Dalmore's brokercheck for Dalmore. Banking services are provided by Evolve Bank & Trust, Member FDIC. By opening a custody account on the Platform, you agree to Evolve Bank & Trust’s Custodial Agreement.

Further, Landa Management LLC, a wholly-owned subsidiary of Landa Holdings, manages Landa Financing LLC (“Landa Financing”), and raises funds and facilitates the issuance of shares for Landa Financing through the Platform pursuant to Regulation A. All securities-related activity for Landa Financing is conducted through Dalmore Group LLC (“Dalmore”), a registered broker-dealer and member of FINRA/SIPC (for more information on Dalmore, review Dalmore’s brokercheck for Rialto.

You should speak with your financial advisor, accountant, and/or attorney when evaluating any offering of securities. Neither Landa Holdings, Landa App, nor Dalmore makes any recommendations or provides advice about investments, and no communication, through this website or in any other medium, should be construed as a recommendation for any security offered on or off this investment platform. Nothing in this material should be construed as investment or tax advice, or a solicitation or offer, or a recommendation to buy or sell any securities. The Site and/or the App may make forward-looking statements. You should not rely on these statements but should carefully evaluate the offering materials in assessing any investment opportunity, including the complete set of risk factors that are provided as part of the offering circular for your consideration. We urge you to review the applicable offering circular, available here.

All securities offered by the Landa Entities and Landa Financing are deemed “Shares”. Investing in Shares involves risks, and there is always the potential of losing money when you invest in Shares. Past performance is no guarantee of future results. Investments in Shares are speculative and involve substantial risks to consider before investing, outlined in the respective offering materials and including, but not limited to, illiquidity, lack of diversification, and complete loss of capital. An investment in Shares constitutes only an investment in a particular offering and not in Landa Holdings, Landa App, or any of the underlying asset(s). Investors should carefully review the risks located in the respective offering materials for a more comprehensive discussion of risks.

No money or other consideration will be solicited (and if sent, will not be accepted), and no offer to buy Shares of a particular offering can be accepted, and no part of the purchase price can be received until an offering statement filed with the Securities and Exchange Commission (the "SEC") relating to those Shares has been qualified by the SEC. Any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of acceptance given after the date of qualification by the SEC. An indication of interest involves no obligation or commitment of any kind.

Investment overviews contained on the Platform contain summaries intended for informational purposes only and are not complete. For detailed information, we urge you to refer to the applicable offering circular filed with the SEC. Neither Landa Holdings nor any of its affiliates offers refunds after an investment has been made.

You should speak with your financial advisor, accountant, and/or attorney when evaluating any Shares. None of Landa Holdings or its affiliates, Dalmore, or Rialto makes any recommendations or provides advice about Shares, and no communication, through this website or in any other medium, should be construed as a recommendation or investment advice. Nothing on the Platform should be construed as investment or tax advice, or a solicitation or offer, or a recommendation to buy or sell any securities.The Platform may make forward-looking statements. You should not rely on these statements but should carefully evaluate the offering materials in assessing any investment opportunity, including the complete set of risk factors that are provided as part of the offering circular for your consideration. We urge you to review the applicable offering circular, available here.

All Shares will be issued in electronic form only and will not be listed or quoted on any securities exchange. After a Series’ offering has concluded, we expect that the Public Private Execution Network Alternative Trading System, or PPEX ATS (the “Secondary Trading Platform”), which is registered with the SEC and operated by North Capital Private Securities Corporation (“North Capital”), will be the only venue available for the resale of Shares. Resales of Shares will be conducted by Dalmore, as a broker-dealer member of the Secondary Trading Platform; provided, however, any such resale of Shares will be subject to federal and state securities laws and the restrictions in the Series’ Operating Agreement, and there can be no assurance that an active market for any Shares will develop on the Secondary Trading Platform, that the Secondary Trading Platform will be available to allow resales of Shares to residents of all states, or that the Secondary Trading Platform will be available at all. For these reasons, investors must be prepared to hold their Shares indefinitely.

Disclaimers

Landa Holdings maintains this website for informational purposes only. All offerings of Series’ Shares (and information about each Series and its underlying property) are conducted exclusively on the Landa Mobile App.

All images and figures shown are for illustrative purposes only and are not actual customer or model returns. Landa is not a cryptocurrency app, all monetary values are in U.S dollars and available only to U.S. investors. All Rights Reserved © Landa Holdings, Inc.