Crowdfunding Grows as Source of Real Estate Investment

By Dan Weil, Crowdfunding is the hot new thing for startups trying to garner cash, and now people are using it to invest in real estate too.   Crowdfunding consists of a group of people financing a venture through the Internet.

When it comes to real estate, investors can use dozens of crowdfunding websites to put money in areas including single-family homes, real estate development projects and distressed mortgages, The Wall Street Journal reports. Investments can begin as small as $100.

Crowdfunding platforms have generated $135 million of investments in real estate so far, The Journal estimates.

The Jumpstart Our Business Startups Act of 2012 sparked much of the crowdfunding activity in real estate by loosening fundraising rules for small companies.

gI_85116_gold key
Crowdnetic, a crowdfunding research firm, tells The Journal that real estate is far and away the biggest crowdfunding sector it follows.

Real estate is “the hottest sector,” Richard Swart, who heads a crowdfunding research program at the University of California, Berkeley, tells the paper. “It’s getting the most interest and the most activity.”

However, some are concerned because many investors don’t know much about real estate and there might be unscrupulous landlords and developers using crowdfunding because traditional financing sources have turned them down, The Journal notes.

In fact, the paper points out, “at least three websites have folded or temporarily suspended operations as founders rethink their business strategies.”

Meanwhile, the Federal Reserve’s continuing low interest-rate policy is attracting investors to real estate investment trusts (REITs). Investors put $5.6 billion into REIT exchange-traded funds this year through June 3, according to Bloomberg.

“We live in a world where investors are thirsty for yield, and since REITs are required to dividend out most of their profits, they’re a good yield vehicle,” Jim Sullivan, managing director at Green Street Advisors, tells the news service.

Read Latest Breaking News from
Urgent: Should Obamacare Be Repealed? Vote Here Now!


Tags: ,


MarketWatchWhy a crowdfunding site is giving out $10000 scholarshipsMarketWatchCrowdfunding site GoFundMe announced Thursday that it will award $10,000 to 10 students with pages on their site that fundraise for education. The award is part of a contest the site held throughout Septemb [...]

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 [...]

Crowdfund InsiderBrief: GoFundMe Presents $100000 in College Scholarships to 10 StudentsCrowdfund InsiderTo qualify for the scholarships, each student had to create a crowdfunding campaign on GoFundMe, shared stories about the obstacles they had overcome in pursuing their education, h [...]

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 [...]

Smart From The Start: 3 Ways To Properly Establish Your Business When CrowdfundingCBS LocalConsequently, burgeoning entrepreneurs have turned to crowdfunding platforms to get the seed money they need to get business ideas off the ground. However, seeing as 98 percent of crowdfunding p [...]

Crowdfund InsiderTitle III Crowdfunding Might Not Be What Many ExpectedCrowdfund InsiderI have been immersed in the equity crowdfunding industry since late 2015 and have tried to collect as many different perspectives on the industry from as many experts as possible. And while it is h [...]

The RegisterHardware ain't hard, money is: Crowdfunding, bootstraps and startupsThe RegisterHmm, I think we call this bootstrapping in IT, or in our case crowdfunding. Raise enough money to get the first shippable product and ship it. (I did once work on a "big" defence [...]

Crowdfund InsiderSEC Schedules Open Meeting on Rules 147 & 504 Impacting Intrastate CrowdfundingCrowdfund InsiderMary Jo White October 30 2015 The SEC has scheduled a meeting to consider proposed amendments related to Rules 147 and 504 – securities regulations that impact intrasta [...]

ExtremeTechNew crowdfunding project promises an ATX motherboard for IBM's Power8ExtremeTechWe don't cover many crowdfunding projects at ExtremeTech, because most of the pitches we get are frankly terrible. While we can't make any promises about any crowdfunding project [...]

CoinTelegraphCrowdfunding vs. ICO: Experts Question Legitimacy and Guarantees of Initial Coin OfferingsCoinTelegraphOne major difference exists between traditional crowdfunding methods and ICO, and that is market value. When a product is introduced on crowdfunding platforms like Indie [...]

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 |