Crowdfund Your Next Real Estate Deal

By Paul Benson, How to Get Your Own Piece of a Million-Dollar Real Estate Deal, Since the Jumpstart Our Business Startups Act, or JOBS Act, was created in 2012, crowdfunding has been picking up steam. But what exactly is crowdfunding? By definition, it is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet.  Most successful projects receive about 25 to 40% of their revenue from their first, second, and third degree connections. These are friends, family members, work acquaintances, or anyone related to the owner of the business.  But because anyone can contribute any amount of money to a project or venture through crowdfunding, a compelling message must be created so as to draw a large audience. Now, there is a misconception that crowdfunding is just useful for small businesses and start-ups. After all, it’s extremely popular where smaller investments are required. However, crowdfunding is also booming in the real estate industry. Benefits of Real Estate Crowdfunding .  Before crowdfunding came along, traditional real estate investing was reserved primarily for high net-worth individuals and private equity. Illustration-by-André-da-Loba-300x200 (1) But today, there are a number of crowdfunding platforms for real estate that have raised more than $100 million for individual properties all over the United States. Similar models are now also being used in China, Japan, Australia, Canada, and France. Crowdfunding on these real estate platforms allows investors to participate in individual deals involving the financing of apartments, hotels, office buildings, and other commercial real estate. They get to work directly with real estate developers and have a voice in the process. Investors can also choose the projects in which they want to invest their money, purchase a percentage of the project, and, in return, share in a portion of the operating profits associated with those real estate projects. Sounds easy, right? Technically it is. However, you want to be careful about which crowdfunding platform you choose.

5 Real Estate Crowdfunders to Know

Typically, you want to look for a platform that is well capitalized — meaning you want to watch out for platforms created by a couple of students who just graduated from college and don’t have more than two pennies to rub together.

According to crowdfunding expert Zack Miller, the top five crowdfunding platforms for investing in real estate are:

  1. Realty Mogul
  2. Fundrise
  3. Groundbreaker
  4. CrowdStreet
  5. GroundFloor

Realty Mogul has completed 58 deals in 14 states, totaling over $14 million as of the end of March 2014.

Fundrise has a $100 minimum and has invested in over $10 million in real estate investments since the start of 2014.

Groundbreaker works closely with real estate companies, so real estate firms interested in crowdfunding can work with Groundbreaker’s technology to grow their investor base.

CrowdStreet was founded by CEO Tore Steen and VP of Business Development Darren Powderly. Both have negotiated over $200 million in commercial real estate transactions since 2003.

And GroundFloor uses state crowdfunding rules, meaning those living in the states where GroundFloor does business don’t need to be accredited investors to participate in the deals. Investors can contribute as little as $100 per project.

Of course, while crowdfunding is quickly becoming a popular choice for real estate investors, there’s still nothing better than having a qualified broker in your corner — someone who can help you negotiate the best deals and seek out the most lucrative real estate opportunities in the market.


Tags: , ,


This RSS feed URL is deprecated, please update. New URLs can be found in the footers at [...]

TechCrunchHow hate speech crowdfunding outfit Hatreon crept back onlineTechCrunchIf you want to make a living creating white supremacist content, you're probably not going to do it via sites like Kickstarter and Patreon, which prohibit hate speech. Fortunately there's Hatreo [...]

TechCrunchFormer Gawker employees are crowdfunding an effort to buy Gawker.comTechCrunchWhile Univision acquired most of Gawker Media's sites last year (and renamed them as the Gizmodo Media Group), the deal didn't include Gawker itself. In fact, BuzzFeed reported last month [...]

ForbesCrowdfunding Do's And Dont's From iFundWomen's Karen CahnForbesDuring our conversation, she was transparent in sharing that her first software company, VProud, failed because she “did everything backwards” and spent too much time trying to perfect the product. “Pe [...]

New York TimesCrowdfunding Giant Indiegogo Opens Platform to ICOsCoindesk (press release) (blog)The startup revealed today that, through an existing partnership with MicroVentures, it will begin offering services around the blockchain funding model. The first sale is for the Fan-Contr [...]

Financial TimesCrowdfunding a mission to save capitalism from itselfFinancial TimesJeff Lynn is on a mission to save capitalism from itself at a time when millions feel locked out, and unable to foresee themselves better off than their parents. His answer: to democratise capital. That [...]

VentureBeatAtaribox preorders and crowdfunding campaign open on December ...VentureBeatAtari will start taking preorders for its Ataribox game console starting December 14. The New York company will also start its crowdfunding campaign on Indiegogo at that time.Ataribox Preorders And [...]

Crowdfunding For French CastlesNPRYou too can own a French chateau, in part, anyway. Romain Delaume, CEO of Dartagnans, tells NPR's Scott Simon about a crowdfunding effort underway to preserve La Mothe-Chandeniers. SCOTT SIMON, HOST: What if I told you that for about $60, you cou [...]

DeeperBlue.comCrowdfunding Campaign Underway To Establish Freediving Lanzarote DestinationDeeperBlue.comFreediving Champion Marianna Krupnitskaya has set up a crowdfunding page to help her set up an amazing freediving destination in the Canary Islands. The Freediving Lanzarote project [...]

CurbedHistoric French chateau now has 13000 owners from crowdfundingCurbedThe Chateau de la Mothe-Chandeniers has had many owners since its construction in the 13th century. Now more so than ever. Over 13,000 strangers have recently banded together to save the fairytale home—which fea [...]

CFB Finance


  • Crowdfunding
  • Crowdfund
  • Peer to Peer Lending
  • FinTech
  • Reg A+
  • Reg CF
  • Crowdfunding USA

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 |