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EllenD

What are your thoughts about property crowdfunding investments?

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I ran one of these many years ago

It was for tradesmen only 10k in 10 people and everyone did their trade for free (labour only) I was the property expert

we bought run down properties.

It worked well for 3 deals then people started to see the pot grow 10k turned into 17k. 17k turned into 20k.

Then one person faked an emergency and wanted their money out even though everyone committed to 10 deals. We had a meeting and everyone agreed to buy them out and it folded like a deck of cards. Even though I made everyone 8k they still blamed me (one guy even tried to strangle me) that conversation went something like " you promised 10 deals we have only done 3 I only made 8k you tw*t" punch! strangle!

so my advice

These deals can work well and a lot of money can be made but make sure the group you join is / you do

a) established

b) have many deals under their belt

c) they are business people and understand business

d) due diligence due diligence due diligence due diligence 

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I'm very sceptical. I don't believe some of these rates being bandied about are either sustainable or without considerable risk.

Why would people borrow money at some of these stated rates when they can easily get an unsecured personal loan from Tesco or any one of a dozen well established lenders for 3%? 

The risk of default must be higher than stated, otherwise why not just borrow money at 3% and reinvest it into crowdfunding to get 7% and arbitrage yourself a handy 4%? 

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