How Real Estate Crowdfunding Works

Real estate crowdfunding is a modern way to invest in properties without needing a lot of money. Here’s how it works in simple steps:

1. Finding a Project: A company or platform looks for real estate projects that need funding. This could be anything from building a new apartment complex to renovating an old building.

2. Creating an Investment Opportunity: Once they find a project, they create an investment opportunity on their platform. This means they tell potential investors all about the project, how much money they need, and what the expected returns are.

3. Pooling Money: People interested in investing can sign up on the platform and contribute money to the project. The great part is that you don’t have to invest a lot. Many platforms allow you to start investing with just a few thousand or even a few hundred shillings.

4. Funding the Project: Once enough people have invested, the platform sends the money to the project developer. They use this money to buy, build, or improve the property.

5. Earning Returns: After the project is completed, investors start earning money. This could come from rental income if the property is rented out, or from selling the property at a higher price.

6. Reporting: The platform keeps investors updated about the project’s progress and finances. This transparency helps investors understand how their money is doing.

Real estate crowdfunding opens the door for many people to invest in properties they might not afford on their own. It’s a simple way to be part of big real estate projects and potentially earn money over time.