Real Estate CrowdFunding OK — Wise Or Wild West?

By JOE GOSE, A new rule change lets private firms and investment funds widely advertise their securities offerings.
This promises to give individuals more opportunities than ever to invest in income-producing real estate. Or, depending on one’s point of view, potentially make them the target of swindlers.
The recent end to an 80-year-old ban on “general solicitation” advertising of private securities offerings lets real estate sponsors market money-raising efforts to the public via the Internet, television, newspapers, billboards and other means.
Design-led housing developer breaks world record for equity crowdfunding

The Jumpstart Our Business Startups Act of 2012 directed the Securities and Exchange Commission to end the ban, and the change marks a significant departure from the past. It used to be that private placement issuers could only quietly offer their securities to potential investors already familiar or affiliated with the company — or hire investment banks to find buyers.
“I think we’re going to look back three years from now and say, ‘Boy, did the way we do deals change,’ ” said Darryl Steinhause, a partner in the real estate capital markets group at law firm DLA Piper. “Is it possible that it becomes the ‘Wild, Wild West’ and that the pendulum swings back because of problems? Yes, it’s possible.”
Unlike shares of Boston Properties (BXP), Simon Property Group (SPG) and other well-known real estate investment trusts, private real estate securities aren’t registered with the SEC. So the private sponsors aren’t subject to reporting regulations meant to promote transparency and safeguard investors.
Crowdfunding Push
The JOBS Act mandate to lift the general solicitation ban was part of Congress’ effort to promote capital-raising through “crowdfunding.”

So far the rules only let private placement issuers sell to accredited investors: generally those with single or joint income of $200,000 or $300,000 a year, respectively, over the two prior years, or net worth over $1 million excluding a primary residence. The onus is on issuers to verify that buyers are accredited.
The SEC has yet to adopt broader crowdfunding rules letting anyone invest in private offerings, which was also required by the JOBS Act.
It took the SEC several months to lift the ban, but the change has already stimulated demand on some online platforms created to connect investors with private issuers.
Many of the online crowdfunding portals feature offerings from a variety of industries. But some now are exclusively dedicated to real estate deals, including Realty Mogul and RealCrowd.
The online real estate platforms typically review offerings and sponsors to verify that they’re legitimate, and then open them to investors for a minimum $5,000 stake. If the issuer fails to raise its goal, the portals return the money to investors.

Read More At Investor’s Business Daily:


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 [...]

hypebot.comAriel Hyatt On Crowdfunding, New Book [INTERVIEW]hypebot.comArielHyattBookcaseHiRes-1-672x372 In this interview Ariel Hyatt, founder and owner of Cyber PR offers her two cents on crowdfunding and success strategies, delving into personal experience as well as offering takea [...]

AZCentral.comTiny companies lure investors under Arizona crowdfunding lawAZCentral.comWes Harrington is the founder and chief executive officer of NewSleep, a mattress manufacturer. His company has benefited from Arizona's new crowdfunding law, which allows investors to invest mo [...]

newsBTCAirbitz Launches Equity Crowdfunding Campaign To Develop New ...newsBTCAirbitz is looking to raise a minimum of US$100k during this equity crowdfunding campaign. So far, just US$2200 has been pledged.Airbitz to Leverage US JOBS Act to Raise Funding for ExpansionBitcoinist.netal [...]

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 [...]

MarketWatchWhy a crowdfunding site is giving out $10,000 scholarships ...MarketWatchIt's another indication that families are struggling with college costs.and more » [...]

Huffington PostReal Estate Crowdfunding's Pathway of ChangeHuffington Post“Crowdfunding is just the Internet,” stated Attorney Mark Roderick as he opened last month's RealCap Chicago. RealCap is an annual conference that joins crowdfunding leaders and innovators to propel th [...]

Business Wire (press release)BizWireTV Accelerator Report: AltSchool Looks to Reinvent ...Business Wire (press release)On the latest BizWireTV Accelerator Report, AltSchool enters the next phase of its mission: to enable all children to reach their full potential.and more » [...]

Crowdfund InsiderMassive Rule 147 Amendments May Be On The Horizon Impacting ...Crowdfund InsiderAlmost a year ago, the SEC proposed certain amendments to the current Rule 147 which were intended to help foster, and increase the viability of, Intrastat.and more » [...]

Mountain XpressFaces in the crowd: WNC crowdfunding initatives | Mountain XpressMountain XpressEach week, Xpress highlights notable WNC crowdsourcing initiatives that may inspire readers to become new faces in the crowd. This week features a feature ...and more » [...]

CFB Finance

Press Release

CrowdFund Beat News

Hello @CrowdFundBeat's 17330 followers - thank you so much for following! Wishing you all a happy Monday! >>

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 |