Real Estate crowdfunding platforms
Crowd-funding for real estate is slowly gaining traction among the gurus of both the industries. The entire concept is a hybrid between capitalism and the modern culture. With a market cap of $30 billion per year, crowdfunding platforms seek the approval of real estate gurus to enter and raise its stakes furthered. This article will provide you with ample knowledge of these platforms and their mode of operation.
Real estate crowdfunding platforms:
Crowdfunding—is not something unheard of. It is a place where new startups or entrepreneurs turn to in order to source capital. Crowdfunding can be labeled as a platform where general public can buy off their share of the pie by investing money at their own discretion. The funding can vary in magnitude, but it has been declared legal by the government of United States of America. In the past crown-funding campaigns were only limited to startups and other fancy projects that caught the masses’ eyes. But things have changed. Now, crowdfunding has also tapped the real estate market and many people are buying real estate by concentrating their funds into a pool and owing rights to a share in the profit. Real estate crowdfunding is also called peer-to-peer crowdfunding. This helps the investors to bypass the banks altogether. This is also a good platform for people who are trying out as investors in the real estate market. These funding can prove to be a practice ground for them, as there is less money involved.
There are several real estate crowdfunding platforms. The top among these platforms are
- Go Fund Me
- Kickstarter
- Indiegogo
- Teespring
- Patreon
- YouCaring
- Crowdrise
- DonorsChoose
- Kiva
- GiveForward
Real estate crowd-funding evolution:
With huge sums of money involved in crowd-funding; possess a lot of potential for the newbies to try out their luck. Many of the real estate and construction firms have stated looking at these platforms as potential investment market. Moreover, this allows these firms to go global and source more investment to funnel their projects in the US.
During the year 2007, many banks tightened their loan approvals and mortgage underwriting, this resulted in smothered of small investors and people had to rely on these banks and middlemen. With the inclusion of crowd-funding in the modern real estate market, more people are turning to it for help against the oppressive system. Crowd-funding disallows any sort of bank or middleman involvement and as a result has gained attraction from the new or small investors.
The JOBS Act 2012:
In the year 2012, the US government introduced JOBS (Jump-start Our Business Startup). The creation of the JOBS (Jump-start Our Business Startups) Act in 2012 was the first true catalyst for the start of real estate funding opportunities on a large scale here in the USA by way of crowd-funding platforms. Crowd-funding for real estate is akin to a hybrid between venture capitalism and social media. Interestingly, crowd-funding platforms for real estate are on pace in 2015 to potentially surpass the latest annual venture capital (VC firms) numbers of $30 billion per year.