New Crowdfunding Laws Change Illinois Real Estate Investing
Just like quirky inventions and medical bills, crowdfunding now offers new options for real estate investing in the state of Illinois. Crowdfunding has been gaining importance in the last few years, as 2014 saw total “global equity” crowdfunding rise to $1.1 billion. The number represents a threefold increase from 2013 numbers, and is likely only a fraction of what’s to come following the passage of favorable crowdfunding laws in 2015.
Eager Crowdfunding Investors May See Meager Returns
Crowdfunded real estate investments may be eagerly anticipated by those looking to take on new, unproven investment ventures. The new law allows Illinois companies to turn to non-accredited investors to raise funds, with the maximum allowed to be raised set at $4 million. These investors are not required to meet typical requirements regarding net worth or income, allowing a much wider range of people to take part. However, experts warn that the returns may be meager, or even non-existent, at least for several years.
Crowdfunded Investments May Boost Community Spirit
This type of investing gives individuals an opportunity to invest in community or neighborhood projects, but such investing would likely be the result of community pride and public spirit. This is not the traditional motivation for real estate investing, with most investors expecting a monetary return from the project in which they invested. Such crowdfunded neighborhood projects could become increasingly important for the civic-minded groups, giving them the ability to easily support local businesses in exchange for a bit of equity.
Buying and Selling Illinois Real Estate
Making the decision to invest in a crowdfunded real estate project may be simple, but buying and selling real estate can be frustrating and confusing, especially for those who aren’t familiar with the local laws and ordinances covering residential real estate. Buying or selling residential property can be just as exciting as investing in crowdfunded real estate projects, but both carry the potential for serious financial loss.
It’s essential to talk to a Chicago real estate lawyer before making real estate decisions. Without the proper guidance, a dream home (or dream investment) could turn into a nightmare of gargantuan proportions. Contracts, ownership responsibilities, negotiations, financing options, and brokerage fees are all part and parcel of buying or selling real estate in Illinois. Without the advice of real estate lawyers in Chicago, it’s easy to make costly buying and selling mistakes.
