Crowdfunding: “The practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the internet.” Forbes.com
Typically, Crowdfunding has targeted and been appealing to small business owners, entrepreneurs and tech start ups. Why? Because it was an opportunity to showcase a business and offer the business owner a chance at success, without dealing with banks and their rules or spending time finding and convincing private investors.
In the past few years, some firms have carved out a niche by lending money to real estate investors who want to buy, renovate and flip a property. Here in California, firms like Patch of Land and Peer Street loaned about 100 million dollars last year to house flippers. Crowdfunding investors will have stringent income and net worth requirements and interest rates charged to flippers are typically high.
These firms are filling a niche, and that’s the key. If you are into flipping, you may want to check out the viability of using a crowdfunding firm for your next project.