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Transactional & Crowd Funding, The Perfect Combination For Real Estate Investors?

by blogger1
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on Thursday, 19 December 2013
BestTransactionFunding

Crowdfunding for real estate is trending hot, while many consider transactional funding one of the best things to have emerged from the recent financial and foreclosure crises. So combined together could they be an even more powerful tool for real estate investing, and wholesaling properties?

While the implementation of Title II of Rule 506 didn’t really pan out the way many had hoped, the JOBS Act has still been very beneficial for both real estate investment and crowdfunding.

A whole buffet of real estate specific crowdfunding portals are now popping up on the web, and the media is doing a pretty good job of raising awareness around this democratization of property and investment. In fact, some may speculate that if left unchallenged by banks too long main street lenders may finally find themselves displaced, no longer needed, and finally feeling the pinch from decades of arrogance and horrendous customer service.

However, despite the endless and amazing benefits that crowd-funding brings to the game for investors, there is still a large gaping void many need to fill to leverage it…

It’s fantastic that smaller investors can now go to the crowd to raise millions for their real estate projects, and bring about development that would never otherwise be possible, while increasing the wealth and incomes of individuals and families everywhere. However, there is still often the issue of securing a property and taking control of it in between discovering the deal and being able to cash it out with crowdfunding.

Whether it is just a matter of a deposit to concrete the contract or short term acquisition funds, if investors don’t have the means to lock it up anything could happen by the time a crowdfunding campaign actually becomes liquid cash. Some don’t realize that even after a campaign end date it can take 20 days to receive funds.

This is where transactional funding can come to the rescue and save the day (along with millions in profits). Transactional lenders can become an essential source of flash funding to fill the gap and make bigger deals possible. Without it, many find their crowdfunding attempts end up a complete mess.

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