In this article, I will share what real estate investing groups or REIG are and how to make many with them. Plus, is it a risky investment for a beginner, or is it just a bubble, that everyone is talking about?
It’s not a REIT or not similar to one. It’s a different and new way to invest in real estate. Made especially for an average man who doesn’t have that much money to buy physical property.
What are Real Estate Investing Groups Exactly?
An REIG is a group of investors who invest in real estate and generate income for their investors. They invest that money in house flipping, rental property, and commercial real estate, just like a normal real estate investment.
If you don’t have a lot of money and proper knowledge of real estate investing, then those real estate investing groups are your best option to get started.
But they don’t allow everyone. There are some rules and regulations that you need to follow to invest in them. In this case, they are very strict. You can not fool them.
They also might charge you some annual membership fees, and maybe they require you to participate actively in those investments if you are a capable person.
If you think I will just give them the cash, they will generate income for me. Then know you are wrong. Sometimes you have to work with them to get the maximum profits. It’s a group man for a mutual fund. You will have some responsibility for these investments.
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Pros and Cons of These Real Estate Investor Groups
Here are some advantages and disadvantages. Keep in mind while investing with a real estate investing group. Otherwise, you might lose all the money. It’s risky dont take it likely.
The Advantages of an REIG
- An REIG does not need a lot of money to invest but has some bylaws that a member must follow.
- No personal experience or any knowledge of real estate investing is required here.
- You are investing in physical assets, which have far better advantages than any stock assets like a REIT.
- You will get a task shared by the group. When you complete it, there is no more work you can relax.
The Disadvantages of REIG
If we talk about disadvantages, these are the primary reasons why you should not invest in real estate investing groups.
- Your success will depend on the capability and knowledge of the whole group. That is why you must choose a good REIG.
- You are investing with other people, and they might not be trustworthy.
- They might charge some management fees, which may reduce your return on investment.
- Disagreements and maybe a fight ofter can happen. Be ready for it.
- And legal proems can also occur. Someone might sue you.
These are the main disadvantages of these real estate investing groups. Make sure you analyze the group before entering. But how to find and choose a good REIG group?
How to Find a Group to Join?
First, don’t search for it online. Those groups will charge you the most management fee. They are not as good as it seems online. They are just promoting their group in the search by paying google money.
You can visit LinkedIn, Meetup, or any other networking site that is trustable and good for network buildup opportunities. That’s where you can search for the REIG group.
Plus, you can check the REIA or National Real Estate Investors Association across the country. They hold monthly meetings, offers, and a lot of networking opportunities to help you find a good REIG with a good track record.
If you can not find any good group then don’t hurry and join any group. Be patient and search for more.
Points to Keep in Mind Before Joining
These are some real-life points you should keep in mind while investing in a real estate investing group.
- First, check REIG’s investment strategy. Are they flip houses or hold the property as a rental unit for a monthly cash flow? And will that suit your investment criteria? If yes, approach them after the due diligence is done on that REIG.
- Then analyze all the data and look for their projections. Are those projections close to the real performance? Look, you don’t want to invest with a group that promises some extraordinary things but delivers none. That is where people get scammed.
- What is their risk tolerance level? If it’s manageable, can you manage it?
- Never invest with a group whose goals and your goals are not aligned. Goals determine the end results, and you don’t want any troubles in your investment.
- And know this, the group will not allow you to pull the money off whenever you want. You have to follow their guidelines.
That’s all. If you think these are okay and ready to go, then find a great investing group, and start investing.
Last Words
In the end, I will say, when you see the agreement, analyze it carefully, the structure, their future plans, team members, and the whole investment property they are about to invest in.
All these are needed to be verified by an expert. Don’t hesitate to pay someone to analyze these. Go and hire a lawyer and tell him to verify all these. It can save you a lot of hassle, time, and obviously money.
Real estate investment groups are good if you can follow the rules. Otherwise, I think you should stay away. But it’s a good option for diversification and returns on yearly basis. Good luck. Invest wisely. Thanks for reading, see you soon.
