How To Use Crowdfunding To Finance Your Phoenix Investment Property

How To Use Crowdfunding To Finance Your Phoenix Investment Property

Are you ready to invest in Phoenix real estate? Using crowdfunding to finance your investments can open many doors for you that you hadn’t previously thought possible. Learn more about how to crowdfund your real estate investments in our latest post!

Using other peoples’ money (OPM) to grow your investment portfolio is the secret of many top investors’ success. Crowdfunding your deals will help you make investments you may have never imagined otherwise. Below, we offer some tips to help you crowdfund your investments and build a portfolio to set you free in Phoenix real estate.

Creating Your Business Plan

As in any other business, you need to have a plan and strategy to create investments success. You will want to create a formal business plan that covers your goals, funding, strategy, and exit should the need arise. In order to attract the right investors, you’ll want to be as detailed with your plan as possible. Hi-light what you know, how you plan to execute on it, and your projected outcomes.  This will help earn the attention of some of the savvier investors you can partner with. If you aren’t sure where to start, seek the help of others who have been where you are.

Finding The Right Investors

A team is only as strong as the weakest link. If your investment partners are silent, much of the decision making will be left up to you. However, if you will all be working together as a team you’ll really want to make sure you are working with people with similar investment styles as yours. You should have similar goals and aspirations for your business, as well as a shared vision of how to get there. You should have clarity on outcomes and what the right partners look like; this is critical to your success. This is no different when crowdfunding your real estate investments in Phoenix.

Creating A Legal Agreement

This is when it is time to get the lawyers involved. Before crowdfunding your investments or partnering up to buy real estate in Phoenix, all agreements should be reviewed, if not drafted up, by a lawyer with a real estate specialization. Your agreement should include who pays what, when, and what will qualify as a  good investment. The agreement will clearly state how profits are paid out and what your fellow investors should expect when working with you. This is where you really need to cross your t’s and dot your i’s. Making a mistake on this agreement can cost you in ether penalties or profits, and sometimes both.

Creating An Entity

Your investment company can be formulated as an LLC or LP or a number of other structures. You’ll want to review with qualified attorneys and accountants your goals and structure for some guidance on which formation will be in your best interest. Setting up your business in this manner not only helps when it is time to pay taxes, but it will also help to protect your personal assets from being seized in the event of a lawsuit. Many investors choose to set up their investment businesses in this manner because of the extra protections provided.

Following The Rules

When using crowdfunding to finance your investment properties in Phoenix, make sure you are familiar with the JOBS Act and The Securities Act. These acts will provide guidance on what you can invest in, how much you can invest, and how frequently you can invest As your company grows and you are utilizing crowdfunding to finance more and more deals in Phoenix, you’ll want to be sure everything you are doing is right under the eyes of the law. Avoidable penalties and fines can negate thousands of dollars in profits from homeowners in Phoenix.

Using crowdfunding to finance the purchase of investment real estate has become more mainstream now than ever before. Whether you are collecting funds from only a few trusted partners or hoping to get thousands of people involved, it is important to always play by the rules. Violating the rules in these areas can result in fines, jail time, and sometimes even both.

We can help you learn more about how to use crowdfunding to finance investment properties in Phoenix. Get in touch to get answers to all of your questions regarding crowdfunding, potentially partnering with us, and how to find the best investment properties currently available in Phoenix and the surrounding areas.

Ready to buy an investment property in Phoenix? Learn how you can use crowdfunding to finance your purchase! Reach out to us today to learn more! (866) 969-8102

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