Ignite FB Tracking PixelWhat You May Want to Know about Crowdfunding for Down-Payments - Georgina Patterson
Keller Williams Realty Petaluma, DRE #02104684
Georgina Patterson, Keller Williams Realty Petaluma, DRE #02104684Phone: (415) 342-6794
Email: [email protected]

What You May Want to Know about Crowdfunding for Down-Payments

by Georgina Patterson 08/01/2021

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

Georgina Patterson

Georgina was born and raised in Paris, France. She studied Mathematics and Biology at the University of Paris. She settled in Marin County where she and her husband raised their two children. She was on tour with Cirque du Soleil, managing and chaperoning her young daughter who was one of the show's featured performers. During this time, they worked and traveled throughout Canada and the USA. Georgina appreciates the beauty of the Bay Area and Sonoma. She especially enjoys the nice weather, diversity, and culture. She became a tax preparer and an Enrolled Agent. She decided to become a Realtor® and is pleased to join Keller Williams Realty. For fun, she enjoys traveling and playing the Piano. 

Realtor®

DRE #02104684

415.342.6794

[email protected]