What to Look for in a Commercial Real Estate Crowdfunding Platform


One of the most important parties that are involved in a commercial real estate crowdfunding is the platform. It is considered as the middleman or bridge between the investors and sponsors. They are responsible for a lot of things, such as advertising a deal to investors and collecting capital from them. They are also responsible for regulatory issues involving the deals, among other things. Also, since commercial real estate crowdfunding is considered as a relatively new financial solution, there isn’t a lot of data on previous deals, even with the largest platforms. But despite that, many credible platforms are getting an idea as to how they deal should be performed.

When choosing your crowdfunding platform, it is important to be careful. You don’t want to let your hard-earned investments go to waste. The following are some tips you can follow to get the right crowdfunding platform:

1. The Best Sponsors

When it comes to commercial real estate crowdfunding, look for a crowdfunding platform that has a sizable portfolioand has experience in making significant transactions based on asset types. No matter what kind of sponsors you are looking for, your best bet is a platform that contains the strongest and most diversified sponsors. The right crowdfunding platform must also make sure that the sponsors have a credible reputation. So, they must conduct thorough background checks. Platforms are also considered as buffers between sponsors and investors. They’ll be the ones working on the deal and analyzing it for you.

2. Financial Projections

When you pick a platform, make sure that they would be able to help you understand the financial projections on the deal. They need to be able to provide information regarding whether the project expenses are in line with historical expenses, for example. Or give you a report as to how much-projected cash flow is coming from the operations in comparison to the projected exit. The crowdfunding platform must be able to explain all of this information to you.

3. A Competent Team

A suitable crowdfunding platform must have an impressive staff. You must evaluate their credentials and research if they are the right fit for you. The platform must have rigorous processes in place so that they can filter out only the best deals. This means that the staff will determine and evaluate each deal thoroughly. Most highly-skilled team members can only do this. Thus, by the time the deal makes it to the platform, a competent team will have already analyzed it in various ways.

4. Volume of Deals

A platform can either have multiple listings or a few. You need to research whether you should choose a platform with more volume than quality or not. Some platforms are laxer with their guidelines, and so some deals are not evaluated as much they should be. A helpful tip is to compare the number of underwriting staff to the number of deals they are opening for investment.

5. Customer Service

Do your research and check whether they have established good connections with their clients. Their clients must have positive reviews about their services. It will mean that their reputation is excellent, and they have given them customer satisfaction.