Mahi Sall, Advisor, Fintech-Bank Partnerships, Payments and Financial Inclusivity
January 25th, 2023
Mahi Sall is the CEO & Founder of FinXpair, a Berlin-based strategic advisory boutique firm focu[...]
What Are Some of the Best Canadian Real Estate Crowdfunding Platforms?
First National Realty Partners | Roni Davis | Jan 31, 2022
If you are looking for ways to invest in real estate, using a crowdfunding investment platform might be your best option. Luckily, there are a few Canadian crowdfunding investment platforms that act as a bridge between real-estate opportunities and eager investors. Before exploring different crowdfunding platforms available to Canadians, let's define some terms!
What is Crowdfunding?
Crowdfunding as an investment strategy has been around for a long time. An individual investor has a limited amount of capital to invest with. This puts expensive commercial real estate investments out of reach for all but the wealthiest of individual investors. However, a bunch of individual investors can pool their capital to invest together in a property. This is the crowdfunding investment strategy – it allows smaller investors to get a piece of larger investments.
What is a Real Estate Crowdfunding Platform?
Real estate crowdfunding platforms serve as the marketplace between investors and investment opportunities. Essentially, these platforms help investors find attractive opportunities to invest in.
What do Real Estate Crowdfunding Platforms do?
These platforms perform many of the critical tasks that are necessary to invest successfully in commercial real estate. Individual investors often do not have the time and resources to perform the essential research, engage in the grueling recruitment of other investors, and manage the legal contracts, paperwork, and other laborious details usually involved in commercial real estate investing.
Successful commercial real estate investing requires the dedicated labor of full-time, professional investors. Crowdsourcing platforms will charge investors a fee that pays teams of professional investment strategists and account managers to handle all of the hard work that commercial real estate investing requires.
These crowdfunding platforms make investing in commercial real estate much easier for the average investor because they handle the hard work.
What Are Some Canadian Real Estate Crowdfunding Platforms?
Canada generally has stricter regulatory laws than its neighbor down south. Because these regulatory laws are more stringent and can vary between province and territory, the landscape can be confusing to navigate for the average investor.
Many popular crowdfunding platforms do not operate in Canada because of these restrictions. This lack of foreign competition has led to some high-quality home-grown Real Estate Investment Platforms.
Let’s explore some of these options:
NexusCrowd
This crowdfunding investment platform is considered the most viable Canadian alternative to popular platforms like Fundrise and CrowdStreet. NexusCrowd partners with highly-vetted and successful institutional investment firms to offer their users high-quality investment opportunities.
NexusCrowd also has a significant role in professionally managing their investment opportunities. They only partner with institutional investors who meet their high standards and perform their own due diligence before an opportunity is posted on their platform.
See: $100M Crowdfunding Deal: Republic acquires the UK’s Seedrs for European expansion
The minimum investment is relatively expensive, coming in at $10,000. This puts NexusCrowd out of reach of smaller investors and acts as a paywall, ensuring investors are committed to their investments. Also, investors must be accredited, which means the average person cannot invest with NexusCrowd.
NexusCrowd only curates opportunities that have already reached 50% funding, making investing with NexusCrowd lower risk. Customers can also choose specific properties to invest in, giving them a tangible, physical quality to their investments.
However, if the $10,000 minimum puts NexusCrowd out of reach, there are other more affordable crowdfunding platforms to explore.
addy Invest
If you are more of a casual investor, then addy might be the platform for you. Investors do not need accreditation, which opens up investment opportunities for many Canadians. In fact, addy markets itself as an investment platform for everyday people who might otherwise not be able to afford to get into real estate investing.
Like NexusCrowd, users invest in specific properties, giving their investments a certain tangibility. The minimum investment amount is an astoundingly low $1. However, addy caps investments per property at $1,000 for unaccredited investors.
Addy offers an attractive deal for the average person looking to get started in real estate investing. It is a great foot-in-the-door option for new retail investors to explore the world of real estate investing.
Fundscraper
Fundscraper is a unique alternative to crowdfunding platforms like NexusCrowd and addy. The previous platforms allow investors to choose the specific properties they want to invest in, giving them more freedom but exposing them to higher risk in the process because investment portfolios are not diversified.
Fundscraper offers specific properties for users to invest in but also offers more diversified REITs and real estate ETFs. REITs and ETFs invest in real estate developers, management companies, and other investment companies. These companies are publicly traded and can be invested in like stocks.
See: 3 Trends in 2022 Predicted to Shape Investment Crowdfunding
The minimum investment for Fundscraper is $5,000, making it an attractive compromise between NexusCrowd and addy.
What Real Estate Crowdfunding Investment Platform is Right For You?
When deciding on a real estate investment platform, you need to consider your aversion to risk, how hands-on you’d like to be with your investments, and how much you can invest. You should never invest more than you are willing to lose, as there is always a level of risk associated with investing.
About the Author
Roni Davis is a real estate investor, blogger, and legal assistant who writes for First National Realty Partners.
The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org
 |  |  |
Support NCFA by Following us on Twitter!Follow @NCFACanada  |
Related Posts
KABN Network Joins the Trust Over IP Foundation
7 Elements of Highly Effective Fintech Companies
Heard in Toronto at #FFCON18: Blockchain is the Future, Alternative Finance is Now
President Xi Says China Should ‘Seize Opportunity’ to Adopt Blockchain
WEF’s Sheila Warren: blockchain is the door to new digital reality
Valkyrie Interview: Institutional Investors and Crypto Prices
Leave a Reply