Why You Need P2P for Passive Investment

Posted by SEO Team on March 22nd, 2016

This implies separating their income from investment from any considerable commitments on time. This is similar to the way bonds and stocks investments work. The investor does not actively work with the company he or she invests in neither does he form part of their daytime job; rather, the investment helps in financing their growth. On the other hand, investors who are active may opt for a new financing source, especially one that is similar to their business.

Real estate peer-to-peer marketplaces solve each of the aforementioned situations. Investors in real estate requiring a bridge loan to finance their renovation project can access these marketplaces. However, they must have the the knowledge that in most scenarios, the money is sourced from people similar to them. Accredited investors wanting to simply assist in financing the loan or participate in positions of ownership (hence an upside on potential equity) in commercial properties may do that too. Commercial properties may be self-storage facilities, shopping centers, office buildings, as well as other types of commercial real estate properties that most investors lack access to. Tax benefits linked to such properties equity investments can be provided to real estate P2P investors without the usual management complexities.

Active investors in real estate are often handling property rehabs whereby the financing is made for renovating or purchasing properties. Traditional financing institutions such as banks are no longer the best alternative for these types of investors. The traditional lenders often have set underwriting guidelines which are not at par with these projects and often fund purchase of property only, leaving the sourcing of funds for renovation to the owner. Most P2P investment marketplaces specialize in these loan types. This kind of investment can also be significantly useful to investors going for the long-term and who require fast financing before opting for traditional sources. The rehab loans take care of the costs of rehab as well as the purchase of the property. For the purpose of protecting both parties, most times, the loans are disbursed in certain amounts over time as the repairs of the properties are completed.

The superior peer-to-peer marketplaces utilize advanced technology for fixing and flipping the rehab loans in a fast and simple manner. These marketplaces also tend to have application processes that are simple and straightforward: the borrowers are required to provide a few simple key parameters, such as, the property’s location, price of purchase, budget for rehab, personal net worth and income, and other items. Once achieved, technology does the rest of the work. Processing computer algorithms utilize the parameter inputs, and a letter of intent is immediately generated. Underwriters review the application promptly and commence work with the investor to garner additional necessary information and then proceed to work on the project with the aim of closing the loan deal as fast possible.

For more information please visit P2P investment