As mentioned in these pages last year, recent SEC deregulation has cleared the way for commercial real estate investments to seek capital from individual investors with fewer requirements than before. Add the internet to this new playing field and you get crowdsourcing of real estate investment: where property-based offers are thrown open to anybody with a web browser (and sufficient capital).
Among the early wave of startup companies in the crowdsourced real estate investment business is Realty Mogul. If this startup is any indication, it appears the new crowdfunding sector is getting off the ground: the company has announced $10 million in property acquisitions totaling 27 properties.
The properties include multifamily, retail centers and storage facilities. As reported by Globe St.’s Kelsi Maree Borland, one thing that characterizes each of the portfolio’s properties is cash flow:
“Our early success confirms that people are frustrated with the low returns offered by banks and are looking for alternative ways to invest,” says Realty Mogul co-founder and CEO Jilliene Helman. The company has invested inmultifamily properties, retail centers and storage facilities with cash flow, offering investors a quick return on their investment.
The web-based platform simplifies the investment process. Participants can do everything through the website from browsing opportunities to viewing transaction details and signing legal documents. “We’ve made it easy to participate in real estate investing via the Internet by creating a fantastic user experience,” says Helman. “Crowdfunding is going to revolutionize capital formation in real estate. It is here to stay.”
These thoughts are echoed by the SEC who unanimously voted in October to approve Title III crowdfunding proposed rules that allow businesses or investor groups to participate in securities-based crowdfunding. That means that unaccredited investors could make private investments, something that has been banned for 80 years.