Case Study of a Real Estate Crowdfunding Investment

Case Study of a Real Estate Crowdfunding Investment

Last Update: / by Marco Schwartz

Real estate crowdfunding allows you to make real estate deals more often than using ‘classical’ methods. Indeed, you do not need to go through the long process of finding deals yourself, getting a loan, and then going through the whole paperwork. Just using some clicks on a website, you can instantly become a landlord. I usually make 1 or 2 property deals per month, and I wanted to share the process of making a deal.

In this article, I will share with you a case study of a real estate crowdfunding investment, using the latest investment that I made as an example. I’ll tell you about my selection process, and also show you how to make the deal so you can also start earning money from real estate crowdfunding. Let’s start!

Selecting The Property: Platform

The first step in my selection process is to choose a platform on which to invest. As I am based in Europe, my possibilities to invest are still limited at the moment. The best platforms for Europeans at the time this article was written are in the UK, so this is where I am usually looking at for investments.

A platform I really like is the House Crowd, as they usually good deals in good parts of the UK. For this investment, this is the platform I selected as they had good deals at the moment I wanted to invest.

Selecting The Property: Cashflow & Price

The second I look at before doing an investment is to look at the financials. After looking at all the offers available on the platform, I actually looked deeper into a property that seems to fit my criteria:

The property I was looking at to invest in was a townhouse with a 9% gross rental yield. This is quite high for property investing, and I am usually looking for properties yielding above 7%, so this was something I was comfortable with.

The nice thing about this property was also that it had an underwritten rent, which means that whatever happens during the investment period (here 3 years), the rent would be paid. That’s really nice as an investor, as it really reduces the risk put on your money.

The property itself was acquired at 137000 GBP, which includes some refurbishment work. I like to buy such properties, as you instantly build equity into the house with the refurb work. And thanks to real estate crowdfunding, you don’t have to do any of the work!

Selecting The Property: Location

The last thing I look at is the location of the property. I don’t want to invest in a property which would be in the middle of nowhere, even if the financials make sense.

Here is a picture of the property:

Case Study of a Real Estate Crowdfunding Investment

The property was located in Eccles, 6 miles from Manchester. I like to invest in suburbs of big cities, which means there should not be a lot of difficulties to find tenants.

Major highways are also nearby, and there are 3 train stations within 2 miles of the property. The property is also of walking distance from schools, and is located in an area with good rental demand.

Investing in the Property

As this property was passing all my criteria, I decided to invest. As for many real estate crowdfunding platforms,  it’s really easy to invest. I just had to fill out the form, and some minutes later I received an email saying my investment was accepted. I then just had to send the money over, and I just added a new property in my portfolio!

This is already the end of this basic case study, and I really hope it showed you how easy it is to make a real estate deal using crowdfunding platforms, and what is my process to select deals.

Have you already invested in real estate crowdfunding? What are your criteria to select deals? Please share below!

Learn How to Invest in Real Estate Crowdfunding!
Investing in real estate crowdfunding is a great way to create a passive income generating portfolio using your hard earned money. However, selecting the right real estate crowdfunding platforms & deals can be tricky. That's why I created a simple checklist that I personally use to select the best real estate crowdfunding deals. Simply click on the button below to get it for free!

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