Source: My Mother Lode —
A lot has been made about crowdfunding lately. It’s a way for individual investors or buyers to pool funds with others in order to finance whatever it is they want to finance. With real estate, it’s also an opportunity to pool funds and financing together to invest with the assistance of others instead of flying solo on a particular project.
When buying and financing a property individually, the buyer assumes every single bit of risk associated with the purchase. The buyer must vet a potential renter by performing basic background checks. Tenants must provide copies of recent paycheck stubs and contact information for their employer.
Certainly, determining whether or not the potential tenants can afford the rent payments is an essential task. Bank statements should be reviewed to make sure what the prospect says he or she makes is reflected as deposits in a bank statement. Credit is reviewed. Rent is collected each and every month. Late payments must be tracked down. There are maintenance issues involved. When the hot water heater goes out, it’s the owner of the property that must stop and take care of the issue.