Crowdfunding is collective cooperation, usually online, carried out by people or organizations that develop a financing network for a specific project, where they seek the economic contribution of a group of individuals to fulfil the objective of said project.
There are many types of Crowdfunding, in this article, we will talk about the best known.
Types of Crowdfunding.
This type of Crowdfunding is the one that leads the market in the volume of the collection, some of the rewards can be products or services, in some cases experiences that attract funders or backers can also be offered (They are the people who contribute to the project).
Investment crowdfunding (Equity-based crowdfunding)
This type of Crowdfunding is the one that offers participation in the capital stock of a company seeking financing. In this case, the participants become part of the financial society in various ways. Once the project is launched, the investor is obtaining profitability.
Lending based crowdfunding
As its name indicates, loan crowdfunding offers an interest rate on the money received by the participants and must comply with returning the money received in an estimated time plus a certain interest rate that is stipulated at the beginning of the process.
This Crowdfunding is one of the best known, in it there is no consideration since they usually participate in them for the mere fact of being solidarity or humanistic project.
Donation-reward mix based crowdfunding
This crowdfunding model is the evolution of reward crowdfunding, the difference is that when a participant contributes money they receive a consideration that can be in the form of a product or service, this crowdfunding is widely used to finance artistic projects, record labels or video games.
How does Crowdfunding work?
To know how crowdfunding works we have to know what type we are referring to since its operation will depend on that. However, here we tell you which are the main phases of all crowdfunding.
The entrepreneur sends his project, to a company or crowdfunding platform, to apply as a candidate for financing.
The project is presented
An evaluation of the project begins.
Once approved, it is published on the platform for the indicated time of the application.
After the project deadline is closed and it is verified how much financing has been obtained.
Real estate crowdfunding.
Real estate Crowdfunding is a new, more accessible form of investment to be able to invest in the real estate sector since it is not necessary to invest a large amount of money.
The way it works is that you, along with other participants, jointly invest to buy real estate.
The purchase is made until the total of the property is reached. All participants can invest different amounts and continue to own a percentage of the property.
Real estate crowdfunding companies are in charge of carrying out all the procedures and analysis of these investments in exchange for a management committee for the services provided. This provides participants with a safe investment managed by professionals in the sector.
At MountX we work with 2 types of real estate crowdfunding projects.
The first are rented properties, these are high-yield properties with the plus of cash flow, this product is focused on investors who want to take advantage of equity and receive a secure income without management problems.
The second product is pre-construction properties, maximum performance, for those who want to get ahead. This product is aimed at investors who do not need cash flow and prefer to be patient to achieve better profitability. (Maximum profitability, capital gains, avoid paying 100% of the department and thus have more time to organize yourself)