Why Put Your Money in a P2P Marketplace?

Projects on commercial real estate tend to involve properties that are relatively large, such as, office buildings, retail centers, apartment buildings having over 50 units, etc. One of the main drawbacks for smaller investors competing in the market is often the enormous amounts of funding that companies sponsoring real estate could be expecting for their projects. For example, a company looking to raise $10 million will most likely not prefer to do business with an investor that is willing to put in only $300,000.

Peer-to-peer lending marketplaces for real estate allow investors to bring their smaller amounts of funds together to form one large investment pool that a sponsor may be interested in. An individual amount of investment implies that a large number of investors are able to participate in these bigger property projects. On the other hand, investors capable of putting in larger amounts of investment may prefer to opt for a more diversified portfolio. In essence, a peer investor gets the opportunity to participate in large projects which widens his or her opportunities.

For any type of investment, it is required that some due diligence is undertaken and legal agreements met right from the very onset. Once a property that is a source of cash is acquired, it would be impossible for all the tenants in the property to leave the property at once for any reason or catastrophe. Generally, the tenants pay their rent on a set basis, while the sponsor continues on improvement work on the overall operations of the property. This aspect of commercial properties to generate income is a plus as it allows for the property to be less volatile in comparison to assets, such as, bonds and stocks where price fluctuations impact the overall rates of return. Even during recessions, the business cycles in commercial real estates are often not too pronounced; the terms on rental lease assist in mitigating fluctuations in the economy and the impact on the revenue they bring in. Commercial real estates have over time exhibited relative stability when compared to stocks and bonds or other publicly traded secured investments

In a nutshell, if you are an investor or are seeking to start investing in real estate, it would be more beneficial for you to consider the peer-to-peer marketplaces. The fact that you can participate in large commercial real estate projects, which you would otherwise not manage to do so on your own, is one such advantage. The many other smaller investors in the commercial project you fund are a kind of security as they provide additional confidence that the project is indeed worth your while. Finally, the commercial project area guarantees that you get a stable return on your investment that is relatively resistant to a volatile financial market.

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