Recently i have met people in sydney that do crowdfunding property investment.
What that really is:
For example, a property cost $500,000. Developer wants the funds asap without going through bank for loan. So asks the middleman (agent or whatever you call them) to gather a number of investor to contribute ... Eg; 10 investors. So each of then paying $50,000. And the property is paid off in that case which skipped the banks for repayments or interests.
Say after settled, $500 pw rent earned , then it will distribute between the 10, $50 per week - on going costs .....
I found this method really interesting. And will only make money if sold price - capital gain / 10.
Can anyone tell me the downsides and why its not popular?
What that really is:
For example, a property cost $500,000. Developer wants the funds asap without going through bank for loan. So asks the middleman (agent or whatever you call them) to gather a number of investor to contribute ... Eg; 10 investors. So each of then paying $50,000. And the property is paid off in that case which skipped the banks for repayments or interests.
Say after settled, $500 pw rent earned , then it will distribute between the 10, $50 per week - on going costs .....
I found this method really interesting. And will only make money if sold price - capital gain / 10.
Can anyone tell me the downsides and why its not popular?