In a typical real estate investment scenario, business owners will ask for large amounts of funding from a single investor. Unless the business owner already has an established relationship with the investor, it can be a tall order and can take a lot of convincing. Not only does the investor risk their money, but also their reputation and their own credit.

Recently, we have seen a change in direction on how small business owners pool money for their latest real estate investments. Many have chosen to source their funding through crowdfunding, which is a means of requesting investments from multiple individuals or businesses at a much lower contribution amount. The key difference between crowdfunding and traditional methods is that it is usually done online.

Arguably, it is more work for the business owner, but it can reap extraordinary benefits if done well and can be valuable as you expand your business. If you think crowdfunding could help your small business, we’ve outlined some of the most advantageous aspects of hoping on the bandwagon.

1. Your access to capital just became easier. Instead of chasing down big investors, you can take advantage of a user-friendly investment platforms and find investors quickly, getting your business up and running more smoothly. By securing funding through multiple investors you have opened yourself up to more options than when traditional means are limited.

2. By promoting your fundraising campaign, you are marketing your business. Directly through these platforms, you can rapidly expand your investor network and grow meaningful brand awareness. Not to mention, you can receive valuable feedback from this online community to nip any outstanding flaws in the bud before moving forward.

3. You will foster loyalty between you and your investors. As with a majority of investments, when someone invests they are then invested in its ultimate success. With crowdfunding, you have that loyalty multiplied many times. When people want to see your business succeed they will go the extra mile to help you further this goal.

There are many ways to fund your next venture. At MGR, we have been managing investment portfolios for nearly four decades. We can help guide you on how best to invest in real estate.