6 words you should know to invest in real estate Crowdfunding
1️⃣ Real Estate Crowdfunding Projects:
These projects are investment opportunities in real estate offered by real estate Crowdfunding platforms and financed collectively by different investors. Through Brickfy you can find a great variety of real estate offers. For example, you can invest in Argentina, Chile, Mexico, Spain, Italy, and more countries, and get returns from 3% to more than 25%.
2️⃣ Real Estate Crowdfunding Platforms:
Real Estate Crowdfunding Platforms: are companies that are responsible for showing investment opportunities in real estate Crowdfunding. They are in charge of finding, publishing, and managing the life of Crowdfunding projects. There are many types of platforms.
3️⃣ Annualized Net Profit:
The annualized net profitability shows the net profitability of the project if the investment period is beyond 1 year. With this system, we can evaluate investment opportunities with different terms of permanence and thus buy projects between different real estate Crowdfunding platforms. For example, if an opportunity offers us a net profit of 10% with a permanence of 6 months and another offers us 45% with 3 years of permanence, in order to be able to compare which one offers greater performance, we annually analyze its profitability. Thus, although the second opportunity seemed to offer greater probability, we see that the first opportunity is more profitable. Regarding net profitability, it is important to point out that all the opportunities shown on Crowdfunding platforms give profitability figures that are always estimated, projected, or objective values. The investor should always keep this in mind and also consult all the information offered by each platform as the calculation process sometimes differs from one platform to another. This parameter is equivalent to IRR or Internal Rate of Return.
4️⃣ Holding Period:
The holding period, also called the estimated holding period, it is the period of permanence of the investment until its sale or divestment. Some Crowdfunding platforms limit the transfer of shares during the life of the investment by contract so that the investor can not undo its participation until the end of said period of permanence, and the platform proceeds to the sale of the asset. Many others do allow their transmission, but in the absence of a secondary market, the most likely is that the investor can not resell his share unless he accepts a large discount. Therefore, it is important that the investor takes into account this period of permanence since for practical purposes, he will not be able to sell his participation and therefore he must consider his investment as illiquid during that whole period.
Diversification it is an investment strategy that is based on not investing everything in a single opportunity, but in dividing our investment into smaller ones, in order to minimize the risk exposure and try to maximize the joint profitability of our portfolio. In addition to dividing our portfolio into small investments, it is also advisable to diversify the type of opportunities in which we invest, trying to have different types of real estate, platforms, cities, residential areas, and types of Crowdfunding.
6️⃣ Minimum ticket
Minimum ticket is the minimum amount that can be invested in an opportunity. In investment Crowdfunding, it is the minimum investment that each platform establishes to invest in an opportunity or project. It is often referred to simplay as a ticket. This value usually oscillates between €50 and €50,000, and is fixed by each platform depending on the type of investor to whom your project is run.