Investing in real estate today is not as it was ten years ago. Like many other services, this industry has expanded positively due to the use of Internet and technology. The case of real estate crowdfunding is the best telling evidence of this transformation, and its success is due to the following reasons:
Internet has allowed for all kinds of products or services to be known by people in the other side of the world. In the case of this industry, it suffices to type “Real estate investing in New York (or any other city)” in Google, for all kinds of projects in this market to be displayed, regardless of physical distance.
In Prodigy Network, we have seen that distance is no longer a limitation for this type of opportunities. To date, we have collected around 150 million dollars from investors in 23 countries, which has allowed us to develop real estate crowdfunding projects in trade markets as important as New York’s.
Investment crowdfunding (read more about crowdfunding categories) is characterized today as the ideal model for those investors interested in real estate assets. The main reason for this is its easy processing, which only entails accessing a platform to discover the multiple international opportunities available.
The increase in the amount of platforms is evidence of global interest in crowdfunding real estate investment. Times Realty News reported the existence, in 2014, of 70 platforms of this type in the United States, which contrasts with the 152 that were recorded in 2015; that is, an increase of 117% in just a year.
“Never invest in a business you can’t understand” (Warren Buffet)
Understanding an investment opportunity was complicated in the past. Professionals that worked as mediators were extremely important, for they were the few people who were able to thoroughly understand and explain an investment in detail. The different websites, communities, and platforms that are found in Internet have transformed the access to information and have multiplied the sources of knowledge.
A smart phone or a computer is enough to find the risks and benefits of any type of investment, along with the reports and indicators of different markets. Knowledge has been simplified and this has encouraged more people, on a daily basis, to participate in large-scale projects due to their affinity for them.
“Experts are being replaced by curators.” Statement made by the CEO of Prodigy Network, Rodrigo Niño, summarizing this transformation.
Leveraged by technology, crowdfunding is allowing, besides the investment, for projects to become the purposes of a group. In a recent article by Harvard Business Review, Professor Ethan Mollick, from the University of Pennsylvania, stated that: “One result of raising money over a platform is that it establishes a direct connection between the project creator and the funder. The community owning the project often comes to feel a sense of ownership for the projects that they support.”
In addition to the affinity an investor may feel for a project, constant and active communication –made possible through social networks and other digital tools– has empowered those communities that are working on crowdfunding projects.
These channels allow for platforms, such as Prodigy Network, to maintain a closer relationship with their investment community, through conversations about the projects and those industries with which they are involved. In our case, we have managed to become a referral network for real estate crowdfunding through Facebook, Twitter, Instagram, andLinkedin, knowing that each of these channels allow us to approach and interact with our community in different ways.