Crowdfunding Your Down Payment For A Home
Crowdfunding has been an effective fund-raising tool for millions.
Whether a couple is trying to raise funds for their honeymoon vacation or to try and support a new product, start a business, or fund a charity, for many this method of fund-raising can be a very efficient tool.
These days you are able to crowdfund just about anything. There are sites helping people to crowdfund everything from weddings and funerals to charities and a great multitude of business endeavors, medical treatments, anniversaries, divorces, and more.
And there are a variety of platforms that you might be familiar with today that are popular for crowdfunding, like Kickstarter, Indiegogo, Plumfund, Crowdfunder, and others.
You can now even crowdfund the down payment for your home thanks to a recent site that was just launched by CMG Financial that's called HomeFundMe.
The site, HomeFundMe, is regarded as the first platform online that is enabling borrowers to use the crowdfunding method to raise funds for their down payment toward the purchase of their home.
Previously, lenders allegedly prevented borrowers from obtaining down payment assistance from this method, and they were only able to get help from places like close family members, their employer, a non-profit, or their local church etc.
Those who use the site are able to receive the funds as tax-free cash gifts and if successful, this program might be extended to other lenders in the market.
Global crowdfunding investments are expected to surpass $93 billion by 2025.
There are many reasons why people choose to opt for crowdfunding as a way to try and raise money for their diverse aspirations:
- It's a cost effective option that can cost practically nothing yet potentially reap a great deal in-return
- it's a great way to test an idea that hasn't been tested yet
- it offers market feedback, you can hear what people think about the product before officially even launching it on the market or producing a massive amount of the item etc.
- for some it's their last or only option to try and raise the funds for their home, honeymoon, funeral, business etc.
- it offers professionals a chance to build a following before they've even launched a product and they can build a demand for the product
These are just some of the reasons why someone might want to opt for crowdfunding as way to try to raise the funds that they need.
But not everyone who turns to crowdfunding has a success story, there are obviously many who weren't able to meet their objectives.
And even for those who do secure funds, it might not all be a success story afterward. They could still have problems later on with things like being late on deliveries or suffering development problems, and more.
It's not an easy process and some never seen anything in-return for their efforts. But it's exciting to see how big this space has grown over the years and to see now that global crowdfunding investments are expected to reach $100 billion within just a few years. And to see how diverse the financial endeavors have become that people are interested in using crowdfunding to try and solve.
Pics:
Pixabay
thinkstock via www.thestreet.com/story/13937268/1/here-are-4-somewhat-risky-stocks-that-may-deliver-explosive-gains.html
Sources:
https://www.entrepreneur.com/article/300816
https://www.forbes.com/sites/alisoncoleman/2016/09/14/crowdfunding-why-startups-are-ignoring-the-risks-and-betting-the-farm/#ef614074a507
https://www.bizjournals.com/cincinnati/news/2017/10/09/not-your-fathers-crowfunding-cincinnati-startup.html
https://www.cnbc.com/2017/10/05/a-new-way-to-buy-a-home-crowdfunding-the-down-payment.html
http://www.marketwatch.com/story/this-lender-will-now-help-mortgage-borrowers-crowdfund-their-down-payment-2017-10-05
Wow wouldn't that be great to get a down payment on a house ! Im still trying to make enough on steemit to bulid a small house on a piece of property that I have 1/2 paid off in the country , and hopefully retire early ! LOL! This actually sounds to good to be true , and you know what they say about that , it usually is !! it still sounds interesting enough to at least check into it , even though I have ever only blogged on steemit and have no Utube followers . Thanks for all the information , upped and resteemed !👍👍👍💙💙💙
The people I know who tried to crowdfund projects never got over $100. I think SOME people get great results, I think most people get ignored. If you do not already have a big youtube or facebook following, you will be basically asking your family and friends to send you money and they will probably say "No." They heard your sob story before... lol!
that's right! it's not as easy as it may seem :)
great post dear, thanks for your information . this post got upvote from http://steemit.com/@lighttheworld.
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Thanks for this information. What I don't understand about crowdfunding, is what do the investors get in return? Why would they give you their hard-earned money for something that does not directly benefit them? 😀 😃 😄 😁 😆I'm probably just missing something.
For personal events, like a divorce or funeral etc, they might help because they care about another person, and it's not about getting anything in return. They might see a family lost everything on the news and want to help them, or read about someone with an illness who needs help for treatment or bills etc, many different circumstances.
For business, usually for those seeking the funds for some business endeavor, they will often set some sort of terms and the investor gets a certain perk like first access to the product once it is built? if they help to donate etc also many ppl might come up with a cool idea that others like but not have the funds to get it off the ground and if enough people like the idea and want to see the idea come to full realization then they can contribute to making that happen. In this circumstance with the home, i think people who are getting married or having some other celebration might instead of asking for gifts from loved ones, ask them to fund their home downpayment via this method, many couples already do this with asking guests to their events to rather than give a gift, give them $ for a honeymoon or something etc. :)
OK makes sense. There is this artist in South Africa named Koos Kombuis. I went to one of his latest shows, it was actually at someone's house. Someone told me he was crowdfunding his new album. I think you then get a CD in return if everything works out.What I would probably do is give people a share in the company or a ts shirt or a car depending on how big their contribution was. I hope you have a WONDERFUL day!!! 😀 😃 😄
Often crowdfunding people will get something in return. Like the first production of the product being crowdfunded or something like that. But then there's cases like this where you just have to scratch your head and wonder. Like what's the benefit of contributing to helping buy somebody elses house? Practically Speaking? Like, do they get to come over on Saturdays and use the tennis court or something? 😂
haha I know that's exactly what I meant. Reminds me of that guy who did a ted talk on asking people for favours. He went to random people's houses and asked for favours, also to businesses. Like once he went to a random person's house in basketball clothing and a ball and asked them if he could play basketball in their back yard.
Another time he was at Krispy Kreme and asked them for donuts shaped in the olympic symbol. They actually did it and then even gave it to him for free. I actually just found it here it is
I do not have my own house yet. I am currently living in a rented house. Here, home mortgage services do not benefit its customers. I will read about HomeFundMe.
Me too!
I love the idea of crowd funding, even for residential rental real estate or developments. However, for the down payments to buy a home; Calling it right now, it's gonna be a hot mess in the end.
I always wanted to start a lottery that would pay off your house if you won.
Over a short amount of time, more and more people's houses would be paid for. It would help out the local people so fast, that it would make heads spin.
It would probably also destroy all the banks.
But honestly, borrowing $100 from a bunch of people and paying cash for a house would be so much better economically. There was one lady who did this. She borrowed $5 from everyone in town and bought a house. Then she turned around and started giving things to everyone. Which got her even more things given to her.
Everything is possible, just try and try and burn and try again.
There are a lot of people who are helping the inventors to make things for them. but crowdfunding for the house is little strange for me. But thank you for the information. I soon will have your help for my house ;-)
steem on!
Great however this doesn't solve the problem of the housing bubble. Houses are way to high paid for. Prices are artificially up and why should we pay so much for bad building quality?
the money is worthless, continually depreciating purchasing power makes it continually harder to purchase a house