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Group Investing

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What is crowdfunding? 
Crowdfunding is a method of raising money through the collective efforts of friends, family, and individual investors. A group of people pool their money together to build and complete a specific property. Then that property will be listed for sale or leased, and once sold, the profits and the initial investment will be returned to the group. Rental properties will produce and pay dividends.
Crowdfunding example
Let's break down exactly how crowdfunding real estate works in this very simple explanation.

The example: Robert (project manager) wants to build a house for $100,000 and sell it for $200,000. He found two people, Ashley and Kyle, that wanted to invest in this project by funding the cost to build the house.

Ashley can provide $75,000 and Kyle can provide $25,000 towards the house. Which now means that their combined money equals the cost to build the house. 

Now it is clear that Ashley has more money invested into the house than Kyle, but when the house sells, their percentage of profit will be the same. If the house sold for $200,000, which is a profit of 100% of the initial investment, then Ashley's investment would increase by 100% and so would Kyle's.

To simplify, Ashley and Kyle both doubled their money in this example investment house. Ashley put $75,000 in and got $150,000 back. Whereas Kyle put $25,000 in and got $50,000 back.

As for Robert who is the project manager, he would take a percentage of the sale price as his pay for the investment. So a more accurate and in depth senorio from the example with Ashley and Kyle would look like this:

The house sold $200,000 and the following happened:
Robert made $6,000 for managing the project which is 3% off the top
Kyle was paid out $48,500
Ashley was paid out $145,500

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