While “real estate crowdfunding” is getting more attention in investing circles, it’s important to realize that, like REITs, there’s a fair amount of variety among individual real estate crowdfunding assets and the platforms that offer them.
Preferred equity investments offer a happy medium between debt and higher-upside equity investments; preferred equity is subordinate to debt, but preferred equity investors are entitled to payment before common equity investors receive returns.
The highest upside, but most risky variety of commercial real estate investments, these investments offer individuals the chance to co-invest alongside real estate firms that pursue opportunities for high yield based on micro and macroeconomic factors.