Revolutionizing Real Estate Through Crowdfunding

Picture Courtesy of Intelligent Speculator

Picture Courtesy of Intelligent Speculator

The applications for crowdfunding are endless. Up until this point, we’ve seen sundry creative, technological and even bio-medical projects thrive, but one industry slow to join-in has been real estate. Unlike these other areas, it’s hard for entrepreneurs in real estate to get their foot in the door financially, as there are less programs, grants and basic funding options available. But this is precisely why crowdfunding real estate works, and now it’s beginning to catch on.

Crowdfunding real estate enables the public to invest in what used to be an exclusive market. Instead of several large contributions made from deep-pocketed investors and private-equity firms, hundreds of locals can pitch-in for ownership of a new property, splitting its rent and annual income. In a way, crowdfunding real estate transfers the power back to those in the immediate area. So, for example, those who want a coffee shop in the neighbourhood will see to it that it happens.

crowdfunding real estate

Thanks to the lift on the solicitation ban, real estate enthusiasts now have an easier time finding and promoting properties. With portals such as FundriseProperty PeersRealty MogulProdigy Network and Primarq, this process has never been easier. Primarq, specifically, is an interesting portal to talk about, as it uses equity-share financing for residential purposes. Most other portals deal strictly with commercial properties. Portals like Primarq give homeowners the opportunity to purchase homes otherwise outside of their price-range. By co-owning a house with an investor, the shares of the home may be divided, but both parties have still benefitted in some way.

crowdfunding real estate

The concept of crowdfunding real estate is subject to debate. For one, as Fundrise co-founder Ben Millier suggests, “The public will help you build your real estate, but actually over time you realize that the public is an incredible partner… [When] you democratize an investment in real estate, not only do you get capital, you actually get a social power that wasn’t possible before.” On the flip side of things, some specialists are concerned of scams, especially for projects not yet under construction.

Crowfunding real estate opens the doors to a lot of opportunities, but also to a lot of hazards. It will be interesting to see how these portals fare as the final SEC judgement nears. What are your thoughts?

Tags: ,


How Crowdfunding Has Changed the Startup GameSingularity HubCrowdfunding has become a multi-billion-dollar industry, funneling millions of dollars into thousands of projects. Technology in particular is one of the leading categories on popular fundraising platforms like Kickstarter an [...]

The GuardianCrowdfunding: the new buzzword for academics needing research moneyThe GuardianArchaeologist Dr David Petts, from Durham University, has also used crowdfunding, raising almost £25,000 to fund a project on Lindisfarne, off the Northumberland coast. The dig, in June, led to [...]

Airbitz, BitPay, and Wefunder leverage bitcoin and new US ...Brave New CoinEquity crowdfunding platform, Wefunder, recently started accepting bitcoin. On the same day, popular bitcoin mobile wallet provider Airbitz announced the ...Wefunder Launches 10 New Regulation Crowdfunding Offe [...]

CNNMoneyDorothy's fading red slippers saved by $300000 in crowdfundingCNNMoneyThe ruby red slippers worn by Judy Garland in the beloved 1939 film "The Wizard of Oz" are set to undergo a major conservation effort following a successful crowdfunding campaign. The Smithson [...]

Raise Money for Personal Bills on Crowdfunding SitesKiplinger Personal FinanceWhile crowdfunding is often associated with business start-ups, many people are finding it a fruitful way to raise money for personal needs. Sites such as YouCaring, GoGetFunding, GoFundMe and GiveForward ha [...]

Crowdfund InsiderReport: Title II Crowdfunding Data on Three Year Anniversary Tops $1.47 BillionCrowdfund InsiderFifty Dollars Money Grant Crowdnetic has published its annual Crowdwatch report on Title II investment crowdfunding as enacted under the JOBS Act of 2012. Title II, or Reg [...]

How The Fix Crowdfunding Act Continues To Help Improve The Success Rates Of Small BusinessesCBS LocalIn July of this year, Republican Patrick McHenry from North Carolina spearheaded two important bills. Both passed through the House in a landslide vote as part of The Fix Crowdfunding [...]

BloombergCouples Desperate For Children Turn to Crowdfunding FertilityBloombergCrowdfunding has become a popular mechanism for many couples who can't afford the high costs of IVF, or adoption and surrogacy. “It's not an easy thing to share publicly,” says Crystal Barrett, 33 [...]

City turns to crowd funding to help replace boardwalk over Flint RiverMLive.comFLUSHING, MI -- The city of Flushing has opened a crowdfunding campaign to replace a wooden boardwalk over the Flint River. The goal is to raise $50,000 in 60 days on Patronicity, a crowdfunding website, to [...]

AZCentral.comTiny companies lure investors under Arizona crowdfunding lawAZCentral.comInvestors who make bets under the state's one-year-old crowdfunding law certainly have the potential to get in on the ground floor, but they must be patient and might not receive any returns. Th [...]

CFB Finance

Press Release

Live Crowdfunding .tv

What's Next Step in Regulation A+ JOBS ACTS Title IIII :L Interview : Steve Cinelli with Brian Korn Securities and Crowdfunding/Peer-to-Peer Lending Lawyer, Watch more video library | Conference | Interview | Campaign Showcase | Research | Education |