eXp Realty California Inc DRE#01878277
Taunee English, Broker Associate, eXp Realty California Inc DRE#01878277
Email: [email protected]

Alternative Funding: Crowdfunding for Down-Payments

by Taunee English, Broker Associate 11/08/2020

Photo by Tumisu via Pixabay

In an age where collaboration is on the rise, it’s not surprising that some are looking to find an alternative source of funding for their home or business purchase. Crowdfunding has been a successful way to fund various projects and business propositions, but it seems that some have found a way to make it work when purchasing property. The only question is, where’s the catch?

Banking Institutions & Lenders

It’s no secret that crowdfunding may cut into the banking industry’s bottom line. And yet, some people are highly successful when it comes to utilizing it to secure their properties. How do they do it? Diligence and strategy.  

Each donation by patron, if the funds are to be used immediately, is considered a gift. These gifts require letters stating that the funds don’t have to be paid back and are, indeed, a gift.

If you only have a few people donating to your crowdfunding campaign, that should be apiece of cake. However, if you have multiple donors, you might want to start checking them off one-by-one as they give until you’ve secured letters from all of those willing to send them to you.

If you run into anyone who isn’t willing to write the letter, is unresponsive, or you simply have time to wait on your purchase, you can put the funds from your crowdfunding adventure into a different account, and leave them alone. After a few months, the funds will have aged and may no longer need a letter.

The success rate is still iffy on securing funding through crowdfunding sources, however. The biggest hurdle is whether your lender will approve this unconventional method of down-payment.

The Patrons

Most crowdfunding requests usually has a story or mission attached to them. Some ask for the money to help their parents out of the rent cycle because they’re retiring, while others might be looking to open a new type of coffee shop and need a little extra to get things up and running. No matter the reason, you’re selling your story, but will folks buy it?

If you choose to go the crowdfunding route, you have to remember that the people funding you need a reason to fund you. You’ll have to give them the perfect story and reasoning or you’re going to end up flat and without funding. Some find this task incredibly daunting, while others are silver-tongued pros. Either way you slice it, crowdfunding is about marketing and storytelling.

If you decide to go the crowdfunding route, be sure to do ample research, line your ducks up and ensure that you’re ready for the journey. If it seems like it’s a little too much but you still want to find an alternative method of funding, chat with your real estate agent. There’s a plethora of options available, and we’d love to help you find the right one.


About the Author
Author

Taunee English, Broker Associate

TAUNEE is

2019 Beverly Hills/Los Angeles REALTOR of the YEAR!

Taunee English is third-year award winning Real Estate Broker. She is the new Branch Manager of Beverly Hills, eXp Realty California Inc a ResiMercial Brokerage serving Greater Los Angeles and the 2019 winner of Los Angeles Real Estate Agency Award!

She is an U.S Navy Veteran, and she is as devoted to entrepreneurship and professional development as she is to our country. Taunee serves as Chair of Professional Development Committee at Beverly Hills/Greater Los Angeles Association of Realtors and also serves as a State Director, California Association of Realtors.

Taunee English is strong supporter of Women In Leadership and is one of the founding members and 2021 President of LA/Beverly Hills Women's Council of REALTORS®.

And most of all she devoted daughter to her parents - a mother that she plays Twinsie with fashion photo shoots at least three times a year and a father who has the onset of Alzheimer which prompted Taunee to obtain her certificate in Fiduciary Management from UC Riverside and to further her work with families in establishing trusts and avoiding probate.

Broker Associate of eXp Realty of California Inc. License ID: 01878277