The following are some of the latest types of crowdfunding investments we are following:
Crowdfunding Investments in Personal Fundraising
The most common crowdfunding investments involve independent websites set up to run a fundraising campaign. Of course, there are websites through which you can run your fundraising campaign, but in some cases, people want to go it alone. Perhaps they want the greater flexibility of setting up their independent website or ensure complete creative flexibility regarding how their pitch is presented. For one reason or another, they do not want to compete with other peer-to-peer lending or crowdfunding investment pitches and feel they can attract traffic and interest on their own. Enter personal fundraising websites.
What is a Personal Fundraising Website?
A personal fundraising website is exactly as it sounds: a site that you build yourself designed to raise charitable money for a mission-driven purpose. The word “personal” often suggests that an individual or family (as opposed to a larger group or business) is behind the pitch, and “fundraising” suggests that the goal is to raise money for a charitable purpose that does not have to be paid back.
Personal fundraising websites are a cousin of “white label crowdfunding,” the latter being peer-to-peer pitches made through independent websites, but are more traditional types of crowdfunding investments, including equity crowdfunding or other methods requiring payback. In both cases, you don’t necessarily have to start from scratch – Just because the pitch will not be made at an aggregate website, that does not mean that no products are available that help you get your start – pre-packaged websites and other crowdfunding platforms you can buy.
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Crowdfunding Investments in Mortgages
Could we see peer-to-peer mortgage lending shortly? Would investors pool their money together to offer home mortgage loans that compete with traditional bank financing? Of course, this type of crowdsourcing is possible, but a few hurdles may be hard to clear.
As of this writing, home mortgage rates are low. Fixed rates are around 4%, and variable rates are even less. For loans shorter than 30 years, rates available are even lower than that. For peer-to-peer mortgage lending to get a foothold, the rates would have to be high enough to make investors happy with the return. While a large bank may do well collecting 4% from a vast number of people, an individual lender may have other options, even within the peer-to-peer lending sphere, to get a better return. The problem is with the rate of return and the time until the investment is paid off.
Mortgage crowdfunding investments and time frames
The other, perhaps more significant hurdle for crowdfunding investments in mortgage lending is when most borrowers need to pay the loan off. Some shy away from other forms of peer-to-peer lending investing because it can take three or five years to get your loan paid back; crowdfunding investments in mortgage loans would likely need at least ten years, and even that would only appeal to a small number of borrowers.
All of the above said, could we find that a stable 4-5% payoff in an investment is something that does attract some peer-to-peer lenders? Could those who shy away from other fluctuating investments be attracted to crowdfunding investments that produce a steady payback? It is certainly possible and worth following mortgagee crowdfunding platforms to see if it ever gets a foothold.
Crowdfunding Investments in Student Loans
The cost of a college education has grown to the point that, in most cases, the more favorable student loans, subsidized to bring the rate down and may defer the accumulation of interest, do not nearly cover the cost. Many students must choose alternatives with higher interest rates or less favorable terms. This fact has opened the door to other possibilities, including crowdfunding investments.
Crowdfunding is achieved when a group of people feels that a person, product, or service is worth an investment, that the return on the investment is likely to be as good as their return on other investments, and that it can help round out their portfolio. In some cases, investors in crowdfunding are looking for an investment that may be a bit hit or miss, but if they choose correctly, they could end up with quite a return. Crowdfunding for education is slightly different, given that the returns may not be as significant, but there is a greater chance that even modest returns will occur.
With crowdfunding investments in student loans, the crowd identifies a promising student, often based on grades, other academic achievements, or their chosen course of study. For example, a student who has been accepted into medical school and has until now shown great promise in subjects that might forecast success might be an attractive investment for the crowd. Getting crowdfunding investments for educational expenses is often quite different from the process for more traditional loans, with more information needed.
Crowdfunding and Home Improvement
If you are considering a home upgrade that people might want to help you fund, you may turn to crowdfunding investments to get some or all the funds you need. Some, if not most, home improvement projects will only capture the eye of members of the crowd who are looking for a payback of some type. Your home improvement project may be worth going that route if you are having difficulty finding traditional bank funding or you are finding that that funding is too expensive. But what types of projects might be eligible for crowdfunding investments that do not require a payback or where the payback is heavily discounted?
Examples of crowdfunding investments for home improvement
1. Renewable energy home improvement projects may be something certain crowd members are willing to fund at a discount. These investors may be motivated by wanting to protect the environment or wanting to prevent climate change and, therefore, may give you a deal.
2. If you have a unique background, potential investors may want to invest in people like you, whether it is a cultural background, a salutation you went through, or a significant issue in your life.
3. If the reason for your need for home improvement resonates with certain investors, they may be willing to give you a discount. Was it a natural event or another challenge leading to this need? Some investors may be motivated to help rather than just wanting the most significant payoff.
There may be other examples as well of how you can get a discounted payoff schedule for your crowdfunding for home improvement, and again, even if you cannot, you still might find a better deal from the crowd than you do from the bank!
Conclusions and Our Services
As you can see, there are many ways that crowdfunding investments can work for you, whether you are looking for funding or are an investor. More and more ways to use crowdfunding investments are being rolled out all the time, and we can undoubtedly vet your project or purpose and connect you to the platform, website, or other path to get funded. If you are an investor, our services can help point you to the best platform to fit your goals with your funding.
Please feel free to contact us if you have questions about any of these crowdfunding investments or want to discuss our services.
