Sunday, 19 November 2017

How The Real Estate Industry Is Being Shaped By Crowdfunding Revolution

Written by Posted On Wednesday, 03 August 2016 06:03

 

Presently crowdfunding is fashioned as a buzzword  amongst investor  and its been well received within the real estate sector. Although in its early stages, crowdfunding is quickly shaping the way people locate and invest in properties. This change has triggered benefits not just to investors but also to property development firms and also for the real estate sector as a whole. However this quick growth also implies essential considerations for  real estate investors when looking out for a platform to invest their money with

Within the  pre-crowdfunding age making investments in the real estate was all about  knowing  the right people  In the Securities Act of 1933, individual securities investments could not be promoted publicly which meant that access to private investments was restricted to people who had the ability to get them via connections within their personal networks. In other words ,it was based on the old fashioned model of locating and investing in the real estate

The moment a person was able to find a private investment, he would then have to supply the necessary funds and the minimum requirements to gain entry into these special real estates which could quickly run into the six figure range. These expensive buys in prerequisites along with the ban on public solicital of these investments shut average investors away from  big segment of the real estate sector. Besides ,it also meant that access to funds for deals was also limited to people they knew thereby making capital very ineffective

How crowdfunding changed everything

From an investing point of view, crowdfunding sites are  fairly  new concepts but have made tremendous strides in the real estate sector this far and with the passage of “jumpstart our Business startups Act” four years ago, most of the barriors which were witnessed in the past  for people who sought a stake in real estate have been eradicated

This meant that limitation on general solicitation was eliminated and for the very first time in 90 years,start ups and small businesses had the ability to  raise funds and promote their products in a more public way. That idea fast snowballed to the real estate sector and real estate crowdfunding rocketed off with millions of dollars raised via crowdfunding for real estate in 2014 alone

According to PlumFund, an online crowdfunding platform, investors can easily access real estate deals right in the comfort of their homes without having to rely on connections. It also means real estate crowdfunding platforms can give people better prevetted deals and make it possible  to start making investments as little as 1000 dollars thus creating a window of opportunity to most people in 2016 and beyond

 

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