11 Simple Ways to Save Energy and Money at Home


It takes a lot of money to run a home, but you could be spending more money than you really need to. Cutting back on how much energy your home uses can help you shave a huge chunk of money off your monthly utility bills, and it can be a lot easier than you may think. Small changes here and there can really add up to significant savings.

Here are 11 easy ways you can save energy in your home that are good for the environment, and your wallet.

1. Install a tankless water heater.

Having hot water stored on stand-by produces a lot of heat and energy loss. Instead, replace your traditional hot water tank with a tankless water heater that only provides hot water when it’s actually needed, which can save a ton of energy.

2. Turn the temperature of your water heater down.

If you’d prefer to keep your current water heater, consider turning its temperature down to about 120°F. In addition, turn it down even lower when you’re away for a few days.

3. Replace incandescent lights.

Conventional incandescent lightbulbs only convert about 10% of the energy used into light; the rest is lost in heat. Swapping these lights with more innovative LEDs can significantly cut back on energy that’s not being used for lighting purposes. Not only do LEDs use 75% less energy than incandescent bulbs, they also last about 10 times longer.


4. Skip the dishwasher.

The amount of energy dishwashers use to heat the water and dry the dishes is significant. If you can stand it, consider washing the dishes by hand. At the very least, switch off the automatic air-dry after the final rinse and open the door open slightly to help the dishes dry faster.

5. Turn off electronics when not in use.

All of your home’s TVs, computers, and other electronics are wasting energy when they’re left on and not being used. Plug your devices into a smart power strip that uses a lot less energy when they’re in standby mode.

6. Maintain your HVAC system.

Your heating and air conditioning systems should be maintained at least once a year to make sure they’re working optimally and not using up more energy than necessary to operate. About 50% of the energy used in a home comes directly from these HVAC systems, so the more efficiently they function, the less energy will be wasted.


7. Use less water.

Be careful with how much water you use when showering, brushing your teeth, and washing dishes. Shut the water off when not required, and try not to use as much hot water. These measures can help save as much as 50% less water.

8. Insulate your windows and doors.

Windows and doors that allow air leakage account for as much as one-third of energy loss in a home. Seal all these leaks with some caulking, and weatherstrip your windows and doors to prevent even further air loss.

9. Use less water and heat with your laundry.

Little changes that are made when doing the laundry can save a great deal of energy. Don’t do the laundry until you’ve got a full load, and wash each load in cold water to cut back on energy used to heat the water. Once the laundry is done, hang the clothes up to air dry rather than using the dryer.

10. Buy energy-efficient appliances.

If your budget permits and your current appliances are aging, consider replacing them with energy-efficient models that use less energy to operate and use hot water more efficiently.

11. Turn the thermostat down when you’re not home.

Instead of keeping the air conditioner running full blast all day long even when you’re at work, turn it down during daytime hours. Having a programmable thermostat installed can make this job easier for you. It’ll let you set different temperatures for various times of the day so that it will automatically adjust accordingly.

What Fiduciary Does a Mortgage Broker Have to a Borrower?

Under California law, real estate agents have a fiduciary duty to the buyers and sellers that they represent. That means the agent has a legal obligation to act in the best interest of their clients.

This fact is rather clear and widely known. After all, consumers expect that agents representing them offer accurate advice and make decisions that make the most sense for each individual client.

But what about mortgage brokers? Do they owe borrowers a similar fiduciary duty? The answer to this question where it pertains to the state of California is “yes.” Since 1979, California courts have held that mortgage brokers owe a fiduciary duty to borrower following a case taken to the California Supreme Court.

In the case of Wyatt v. Union Mortgage Co., the mortgage broker in question mislead the borrowers about the loan’s interest rate, and failed to point out the serious significance of the mortgage terms regarding late charges and the grace period in relation to late payments. Since this case, mortgage brokers have been bound by the law to provide a fiduciary duty to borrowers.


What Does a Broker’s Fiduciary Duty Involve?

By law, mortgage brokers cannot accept or charge any type of compensation that benefits the mortgage broker. All lawful instructions provided by the borrower must be carried out, and an accurate accounting of all monies received from the borrower should be provided to the borrower.

Last but not least, a mortgage broker needs to disclose to the borrower all pertinent facts of the loan that the broker knows would impact the borrower’s rights and interests.

Brokers Versus Lenders

It’s important to differentiate between a mortgage ‘lender’ versus a ‘broker’. Whereas a broker owes borrowers a fiduciary duty, a lender does not. The mortgage transaction between a borrower and lender is considered to be at “arm’s length.”

Buyers need to understand that the lender’s interests lie in making money, regardless of whether or not the transaction is beneficial to the borrower. After all, the more interest a borrower pays, for instance, the more money the lender stands to make. The lender isn’t too interested or concerned if the borrower winds up “house poor” as a result of an expensive mortgage. Lenders have the freedom to seek out economic interests in a home loan transaction.

On the other hand, a mortgage broker’s interests lie with protecting the borrower. A mortgage loan broker is in a fiduciary position to act in good faith toward a client, and  doesn’t put his or her own personal economic benefits over that individual. If this duty is breached, the broker is considered to be in violation of the mortgage broker’s license law in the state.

The disclosures that fall under the fiduciary obligations of mortgage brokers include the true interest rate, the financial penalty for making a late payment, and any other pertinent components of the mortgage package.

These duties were eventually codified thanks to Assembly Bill 260, which came into effect on January 1, 2010.

If a borrower believes this duty was not upheld by the mortgage broker, a civil claim can be brought forth. Before a claim for negligence can be established, a duty of care owed by a broker to the plaintiff needs to be settled. If a plaintiff is successful in the case, special damages can be recovered, including the actual monetary value of losses that the broker’s negligence caused. 

More Protection With TRID

Borrowers in a real estate transaction have had even more protection over the last year thanks to the TILA-RESPA Integrated Disclosures, or “TRID.” Commonly known as the “Know Before You Owe” act, the TRID mortgage lending rules are meant to offer borrowers more transparency when it comes to the decision-making process for mortgages.

Instead of having to sift through pages and pages of confusing documents and relying on the lender to disclose all pertinent information regarding the mortgage, TRID takes all the federal disclosures and consolidates it into all into two clear and concise disclosures: The Loan Estimate and The Closing Disclosure. That way, borrowers are able to make a more informed decision about a particular loan before signing on the dotted line.

The Bottom Line

Borrowers should always take their time to do the necessary homework about specific mortgage packages for a home purchase. Considering the magnitude of a real estate transaction, it’s in the borrower’s best interests to get firmly acquainted with this information. Luckily, mortgage brokers are legally obligated to look out for the best interests of borrowers. And with the recent TRID mortgage lending rules that help make the transaction even more transparent, borrowers are even more protected.

Renting? Here’s Why You Should Purchase Renter’s Insurance


If you’re renting, the dwelling you live in isn’t yours. You’ve got no responsibility to insure it; that’s your landlord’s obligation.

But what is yours – and what you should consider insuring – are the belongings you’ve got within your home. The dollar value of your TV, stereo system, jewelry, designer shoes, or anything else that has some sort of value should be protected in case of a fire, theft, and so forth.

Your landlord’s property insurance policy will cover losses to the actual structure, but any of your things within it aren’t covered by this policy. You’re responsible for taking out – and paying for – renter’s insurance.

You don’t necessarily have to get a policy, legally speaking – that’s totally up to you. But if your things are torched in a fire or stolen from a burglar, you’ve got no recourse to recoup your losses.

You might not want to assume an additional expense, which is understandable. Between your utility bills (assuming they’re not included in your rent), groceries, car loan payments, and student debt payments, throwing in another expense on the pile doesn’t exactly sound appealing.

But the truth is, renter’s insurance is probably the cheapest payment you’ll have to make at the end of the month. According to the National Association of Insurance Commissioners (NAIC), the average renter’s insurance policy is only about $15 to $30 per month.

Here are some reasons why you should buy into a renter’s insurance policy.

It Covers Any Losses to Your Belongings

Aside from the fact that renter’s insurance is affordable, it also covers losses to your personal property. Even if your place is small and doesn’t fit much, the things you managed to cram in there may be worth a pretty penny when you add it all up. Even if it’s just your smartphone and high-tech headphones, that’s a few hundred bucks right there. You’d be amazed how much you would need to replace all the things you’ve spent years accumulating.

In addition to a fire or theft, renter’s insurance also typically causes losses as a result of damage caused by smoke, vehicles, explosions, lightening, the weight of ice or snow, windstorms, hail, and vandalism. It should be noted that damage caused by floods is not covered under a standard renter’s insurance policy. In this case, you’d need to take out an additional policy.

It Protects You From Liability

Not only are your belongings covered with renter’s insurance, personal liability is also covered. For instance, if someone comes into your home and is injured, they can legally come after you in court for damages. If you have renter’s insurance, you’ll be covered for any costs associated with hiring a lawyer and any judgments that are awarded to the plaintiff in court. The amount of money you’ll be given will depend on your policy limit.


It Might Be Required By Your Landlord

Before you even move into your unit, your landlord might want to see tangible proof that you’ve taken out a renter’s insurance policy. Some landlords just want you to have it for their own personal reasons. Other times their insurance provider may require it.

It Pays For Living Expenses

If your place is damaged beyond the point of being habitable, your insurance policy will cover living expenses to put you up somewhere else temporarily until your home is repaired and brought back up to par. Paying for a hotel for a few weeks or even a few months can really add up. Having a policy that covers these costs can be a real life saver. Every policy is different, so you’d be wise to check your specific policy to identify how long these additional living expenses will be covered for, and what the monetary limits are.

It Covers Your Personal Belongings No Matter Where They Are

Your belongings don’t necessarily have to be in your home at the time that they are damaged or stolen. If you take your things along with you when you’re out and about and they’re either stolen or become damaged, you may be covered for their losses. Inquire with your insurance provider about the specific details on what qualifies to be covered. 

The Bottom Line

For a few dollars a month, you can give yourself some peace of mind knowing that you’ll get your money back in case all of your things are damaged, destroyed, lost or stolen. Rather than being left having to start all over and paying out-of-pocket to build up your inventory of belongings, renter’s insurance can reimburse you instead. Just make sure that you are clear on exactly what is covered under your policy, and don’t forget to ask about any potential discounts that you might qualify for to ease the financial burden.

INFOGRAPHIC: Interesting Stats About Millennial Buyers


6 Tips For Finding the Right Interior Designer For Your Home

Your home may have reflected your style a few years back – but today, not so much. Now you suddenly realize that your puffy sofa looks crammed in your living space, or that flower-ridden wallpaper looks a tad on the tacky side.

The thing is, you’ve got no clue how to change it for the better, so you decide that a professional interior designer is the answer. But considering how many pros there are out there – and how different they all are – how do you go about choosing the right one for your home?


1. Understand Your Personal Style

Ideally, the interior designer you choose should be able to closely match your style. But do you even know what your specific style is?

Doing some prep work before you even start looking for an interior designer can not only save you time and hassle, it’ll save you money too. Look through some decorating and design magazines, and gather up some ideas of colors, furniture pieces, and accessories that you’re particularly attracted to in order to help you layout your style. Having these ideas ready to communicate with potential designers in the form of pictures will give them a clear sense of what you’re looking for, and what they need to do to bring that to life.

2. Determine the Scope of Your Budget

Unless you’re a millionaire and money is no object, you’ll need to decide how much cash you can comfortably set aside to pay for interior design services. And after you’ve got that dollar figure mapped out, you’ll also need to find out how the interior designers that you’re scoping out are paid. Some charge an hourly rate, while others charge a flat fee. Others may mix a bit of both, depending on the extent of the project.

And then there’s the services that they charge extra for, or include in their overall price. Find out if things like purchasing services or consultations are included in their flat rate, or if they charge extra. Check to see if they charge an upfront retainer fee as well, and factor that price into your overall budget.

Don’t be afraid to flat-out ask them to clarify how they plan on spending your hard-earned money. Designers who are honest and trustworthy will have no problem answering your questions openly, and will stick closely to your budget throughout the entire project.

3. Check Out Their Credentials

Years ago you would have had a heck of a time trying to find out what type of credentials and training interior designers had before hiring them. These days, it’s a lot easier, as many states are now requiring designers to pass an exam from the National Council on Interior Design Qualification before they can legally call themselves interior designers.

Ideally, you want a licensed and experienced interior designer in your corner who’s undergone extensive training. You also ant someone who’s actually accumulated a lot of hands-on experience in the field so you don’t end up as a guinea pig for their portfolio.


4. Interview Your Candidates

So you’ve checked out a bunch of interior designers and narrowed down your choices. Now it’s time to interview those select few that have made your short list. It’s during this interview that you should be asking the right questions so you can get a feel for them and decide if one of them stands out above the rest.

What’s the size of their typical job? How will they be provide a visual representation of what the end result will look like? How do they go about choosing subcontractors? Who’s responsible for insurance? Is your involvement welcome or considered an obstacle? Can they provide references? Questions like these will help you narrow down your choices even further, right down the perfect one.

5. Identify Their Availability

Finding an interior designer who matches your style and can work within your budget is great. But does their schedule jive with yours? Have a chat with a few different designers about their schedules and when they’ll have the most time available to put the most effort into your project. If the designer you ultimately choose is too busy and can only dedicate a few hours here and there, it’ll take forever to get anything done, and will show in the final result.

Many interior designers have assistants that help with projects and keep their time schedule on target. In this case, find out exactly how much you’ll be working directly with the interior designer versus the assistants.

6. Check Out Their Portfolios

A portfolio can really come in handy to get a real sense of the caliber of work that the interior designer you’re considering is capable of. Make sure you ask to see a portfolio, and decide if the work done is both attractive and inspiring to you. You’ll know pretty quickly after perusing the photos whether or not the designer would work with your home’s decor.

Picking the perfect interior designer isn’t rocket science. But it is still an important process and decision nonetheless. Keep these pointers in mind, and you’ll be well on your way to working with the right designer who’ll transform your home for the better.

What’s the Difference Between a Mortgage From a Credit Union Mortgage Vs. a Bank?

When you’re ready to buy a house, you don’t necessarily have to depend on your bank to get a mortgage. These days, consumers have a lot more options when it comes to obtaining a home loan, including credit unions.

While these member-owned cooperatives haven’t exactly been very popular in the mortgage realm, they are definitely taking steps to boost their presence in this market. An increasing number of consumers are becoming aware of the services that credit unions offer when it comes to home loans.

Should you look to a credit union for your mortgage? What exactly is the difference between a mortgage from a credit union versus the bank?


Mortgage Fees and Rates

Credit unions are known for offering their membership base lower fees on their mortgages. Whatever savings credit unions are able to realize will be passed on to their members. They are not-for-profit organizations, which means savings for consumers come first before profits.

This differs from banks, which tend to be more focused on generating profits for investors. While your loan closing costs include expenses that are simply unavoidable – such as the cost of appraisals and title insurance – many financial institutions also charge origination fees that you need to pay for taking out a loan. These fees tend to be a lot higher with banks versus credit unions.

Interest rates also tend to be a bit lower with credit unions compared to banks. Many credit unions keep their mortgages in their own portfolios instead of selling them to outside investors like banks do. This gives credit unions more flexibility to offer better terms and rates.


Credit unions only give out mortgages to their own specific members. Each credit union has a limited membership roster. Certain unions will only allow members who work for specific companies, while others allow members based on geographical location. You can’t get a mortgage from a credit union if you can’t qualify to become a member.

These types of limitations don’t apply to banks. There’s no need to become a ‘member’ of a bank in order to get a mortgage, as long as you meet all the lending qualifications.

Qualifying For Home Loans

Since the housing crisis in 2008, lenders have really tightened the strings on home loans. These days, it’s much more challenging to get approved for a mortgage compared to a decade ago.

However, banks tend to have more stringent underwriting standards compared to credit unions. Borrowers with less-than-perfect credit scores will be more likely to get approved for a home loan with their credit union compared to the bank.

Potential homebuyers without a spotless financial history and excellent credit history can benefit from getting a credit union home loan. That means members with poor credit stand a better chance of getting approved for a mortgage from credit unions than banks.

Availability of Services

Banks offer just about every loan service under the sun, but credit unions might not have the same extent of services. Highly specialized loans products, such as investment commercial property mortgages, might not be offered at some credit unions. They may not be well-versed or outfitted with these particular transactions. Banks, on the other hand, may be the better option if a very specific type of loan is necessary.

Level of Service

Since the consumers being assisted at credit unions are direct members, they usually get more personalized and intimate service at these financial institutions versus banks. You’ll have the opportunity to get to know your lender better.

That’s in stark contrast to banks, which tend to sell their mortgages to investors. That means the home loan is no longer with the originating bank. Many borrowers don’t even know who’s servicing their loans after they’ve signed on the dotted line with banks. With bank mortgages, the company that collects your mortgage payments can change a number of times over the lifespan of your mortgage.

This isn’t typically the case with credit union home loans. By working with the same loan provider, you may be able to avoid late fees that could result from uncertainty about where your payments should be sent.

The Bottom Line

You can get excellent home loan services from both credit unions and banks, but it’s helpful to understand the differences between the two. Lending options vary from one institution to the next, and there are advantages and disadvantages to home loan options available through banks and credit unions.

Adverse Possession in California: How a Trespasser Can Take Part of Your Property

As a homeowner, you have the right to keep trespassers off your property. You likely wouldn’t allow complete strangers let their kids play on your lawn or use your amenities for their own amusement without your permission.

These are more obvious signs of trespassing, which require some level of vigilance on your part to make sure trespassers keep off your property. But did you know that trespassing can go so far as resulting in your loss of ownership on part of your land?

It’s called adverse possession, and it occurs when a trespasser uses another’s property as an owner would use it, occupy it, and eventually gain ownership of that portion of the land. The amount of land taken over can be as little as a few inches to as much as a few acres.


How Does Adverse Possession Happen?

Sometimes trespassers are intentionally occupying someone else’s land for their own pleasures, while many times they are using the portion of the land unknowingly.

In the state of California, certain elements need to be present in order for adverse possession to be legitimate. The possession of the property of another must be:

  • Hostile – the true owner must not have granted permission, and the possession must be against the right of the owner;
  • Actual – the trespasser must have physical possession and act like an owner would, unlike how visitors would treat the property;
  • Exclusive – the trespasser to the land must not be sharing the land with the owner or with the public;
  • Open and notorious – the trespasser must act as the owner and use the property as would be expected of the owner;
  • Continuous – the trespasser’s use of the property must occur during a specified time limit before any claim to the land, which in California is five years under Cal. Civ. Proc. Code § 325;
  • Under claim of right – the trespasser must claim that the property is his or hers based on a legal error, which leads to the belief that he or she is the true owner of the property.

In addition to all these elements, trespassers need to prove that they’ve been paying taxes on the property for the entire five year period in the state of California.

If you, as the owner of the property, do not evict the trespasser before the five years expire, that individual can legally claim title to that portion of the land. 

To illustrate how adverse possession can happen in California, let’s say John and Jill are next door neighbors. Relying on faulty surveys or property descriptions in a deed, John builds a fence that actually encroaches on Jill’s property by two feet. Jill doesn’t say anything about it, because she doesn’t realize that this piece of land is actually hers.

Five years go by, with John using that extra two feet of land as his own, and actually paying taxes on it during that entire time period. Under California’s definition of adverse possession, John would stand a good chance of claiming ownership to that piece of Jill’s property. The courts in California would probably hesitate to force John to rip down the fence after all of the elements described above have been met.

Don’t confuse adverse passion with easements, however. For instance, there may be a legal easement on a deed that allows a neighbor to use your driveway to access his or her property. An easement is a shared right with another person over a portion of the property; on the other hand, adverse possession involves a total switch in title.

What Can You Do if Another is Claiming Ownership of Your Property?

The first – and most obvious – action you should take is to ask the individual to stop entering your property, and remove all of his or her structures from it. The person will most likely agree if it was an honest mistake.

Should the individual continue to trespass on your property, you’ll need to speak with a real estate lawyer. Most likely an action to quiet title will have to be brought forth, which is a legal strategy to determine who the rightful owner of the property is.

With an action to quiet title, you will be asking a judge in a California court to issue an order stating that you are the real owner and hold title to the land, and are not the trespasser. If you plan on selling your home in the near future, you will probably have to take this route in order to give the buyers reassurance that the portion of the land will eventually be transferred to them.

The Bottom Line

As a homeowner, it’s important to be vigilant of other people using a portion of your land as their own. It’s also important to have an accurate, detailed survey or property description so there’s no mistaking what portion of the land is allocated to you versus your neighbor. When in doubt, contact a real estate lawyer who can advise you on what course of action you can and should take to make sure another person doesn’t claim title to your rightful piece of the land.

6 Ways to Prevent Water Damage in Your Home

Water can do major damage to your home if it’s not contained. It can weaken your home’s structure and foundation, cause mold and mildew, and invite unwanted ants and termites. If your home experiences a leaky appliance or a burst pipe, it’s best to get the issue under control as soon as possible before all that water wreaks havoc on your home.


Here are some steps you can take to protect your home against water damage.

1. Keep Trees Under Close Watch

Landscaping is a must for any home, but you’ve got to keep growth under control. Trees that are too close to the home can grow really long and deep roots that can actually wrap around your pipes and rupture them. Before you even plant trees and shrubs, find out exactly where your pipes are, and make sure not to plant any large species to close to them. If necessary, eliminate any large trees that have grown way too big and are dangerously close to your pipes.

2. Identify and Fix Leaks Right Away

Obviously, as soon as you see water spurting from your faucet, toilet pipes or washing machine, you’ll want to act on the situation right away. But other times leaks aren’t so obvious. It’s important to keep an eye out for any leakage that may show itself as strange moist spots or musty smells.

You may even notice on your water bill that your home is using an unusually large amount of water, yet you haven’t been doing anything different. If you ignore moisture damage or don’t take immediate steps to make repairs, you’ll be dealing with a lot of damage to your home’s structure.


3. Install Water Detectors

Water detectors can be installed near major appliances or water heaters to detect if there is any water leakage. They are small electronic devices that set off an alarm when the sensor comes into contact with any moisture. These are especially helpful in the event of slow leaks that are tough to notice until major damage occurs.

4. Keep Tabs on Your Water Pressure

The pipes and hoses in your home can buckle if the water pressure is set too high. You can easily determine water pressure by attaching a water pressure gauge to an outdoor faucet and turning it on full blast. The device will then provide you with a reading of the water pressure in your home. If it’s too high, your pipes are more vulnerable to bursting under the pressure.

Typical water systems in residences are able to withstand water pressure as high as 70 psi. If your water pressure gauge detects a number over and above 70 psi, you may need a regulator installed to keep the pressure down.

5. Replace Your Washing Machine Hose

After a few years, your washing machine hose will become dry and brittle. Not only does this make them more susceptible to leakage, it can also eventually lead to a full-on burst. Replace your washer’s hose on a regular basis so it’s able to do its job without allowing any damaging water leakage.

6. Shut the Water Main Off When You’re Away on Holidays

When you’re home, you’ll be there to detect any signs of water leakage and therefore take immediate action. But if you’re gone for an extended period of time, anything can happen, and no one will be there to deal with it. Before you take off for holidays, make sure to shut off the water main. This will prevent any water entering your home through its pipes, and therefore minimize the odds of any water damage in your home.

Water damage can be extremely detrimental to the integrity of your home. It can result in really expensive repairs and cumbersome homeowner’s insurance claims. By taking the above steps, you can drastically reduce the odds of water seeping into areas it shouldn’t be in, and prevent a soppy, costly disaster.

California: A Popular Spot For Real Estate Crowdfunding

Real estate investors love snatching up good deals and letting their purchased properties make money for them over both the short- and long-term. There are plenty of ways to invest in real estate, and one of them is crowdfunding.

This method is certainly a hot method in California among real estate investors, who are pooling their money with other investors to buy properties in various parts of the state. California has been one of the most popular states in the whole country for crowdfunding.


Online Crowdfunding Platforms Making Crowdfunding More Streamlined

RealtyShares, an online marketplace that helps institutional and accredited investors to network with other like-minded investors for real estate investment opportunities, recently released information about crowdfunding in California.

Over $53 million has been raised across 90 properties in California on this online platform, connecting more than 20,000 investors that have poured money into various types of real estate properties, including fix-and-flips, multi-family residences, and commercial equity investments.

L.A. Leads the Pack

While investment deals involving crowdfunding are happening all over the country, the Los Angeles area is the most active, with 46 deals crowdfunded for over $28.8 million on the site.

The majority of those funds have honed in on fix-and-flips and residential debt deals. Not far behind L.A. is San Francisco and the Bay Area with 24 deals for $17.6 million, and coming in third is the Sacramento area with more than eight properties for $3.8 million.

These number are reserved just for RealtyShares; there is plenty more money pooled with other investors on various other real estate crowdfunding sites, including FundRise, Money360, and Realty Mogul.

Why is Crowdfunding So Prevalent in California?

The demand for California real estate has been strong for years, due largely in part to the lack of inventory. With such a strong demand for real estate in California, good deals have been tough to find. Crowdfunding has been a viable way to effectively deal with this scenario. By tapping into the financial resources of investors, the possibility of snagging profitable investment properties across the state is much stronger.

Californians have been among the first in the country to make use of crowdfunding in real estate. The tactic has already been used in other industries with great success for decades, and visionaries have seen the real opportunities for crowdfunding to work quite well in the real estate sector, particularly in California. And with technology making these efforts much easier, such as online platforms like RealtyShares and others, crowdfunding has become even more convenient at bringing properties and investors together.

In particular, there has been plenty of opportunity in California for cost-effective, sub-institutional equity products in the commercial sector, and crowdfunding channels such as RealtyShares are offering real opportunities to fill this void.

Another reason for such a preponderance of real estate crowdfunding in California is the prevalence of these accredited investors in the state. While about 7 percent of the entire US population is considered accredited, that number is higher in California. Orange county, in particular, has 12% to 15% of these types of investors.

What makes an accredited investor? According to the Securities and Exchange Commission, an accredited investor is one with an annual income of at least $200,000, or net worth totalling $1 million or more (not including their primary residence).

The Appeal of Crowdfunding Versus REITs

Before crowdfunding in real estate became more mainstream, investors used to focus more on putting their capital in real estate investment funds (REITs), which involve buying stocks to get a piece of a portfolio of large-scale investment properties. However, investors don’t typically know  which projects are in the works.

On the other hand, crowdfunding allows investors to choose a specific property to invest in, instead of purchasing a piece of the pie of the company that’s developing the property. This gives them a little more knowledge power when it comes to choosing the best type of property and entity to invest in.

The Bottom Line

Like any other type of investment, crowdfunding has it risks. Yet California seems to have the right mix of factors to make crowdfunding a real money-maker for investors in the state. Investors would be wise to work with a crowdfunding platform that is made up of a team of experts in the real estate world to closely asses each and every sponsor and opportunity.