The evolution of crowdfunding as a new investment vehicle in the US real estate industry has been remarkable in the past few years. Since the JOBS Act was passed flourish across the country,which enabled the general public to receive equity in a company in exchange for financing, the prospects for crowdfunding have been limited. As a result of this, real estate has become one of the final frontiers for the movement.
Recently, crowdfunding has become a source of capital for real estate developments, and though initially used for small residential projects, the scope of real estate crowdfunding is continuing to expand, and it is even being used by real estate developers to raise equity and debt for larger commercial projects.
Many of the new platforms were launched in response to the Jumpstart Our Business Startups Act of 2012, which loosened the rules which contains 2 MAIN PROVISIONS:-
- Removes the ban on general solicitation:– Allows investors to access more deal flow and entrepreneurs can easily reach more investors.
- Removes the Accredited Investors Requirement:- Allows anyone in age of 18 to invest in private companies.
While many restrictions still apply, businesses are now freer to promote investments on the Internet to individuals who are known as accredited investors.
Minimum investment values on the platforms mentioned range from $100 – $100,000
At Past before JOBS Act was passed– 258k Active Accredited investors
After JOBS Act Passed(accredited investor restriction removed) – Estimate 233.7MM Active Accredited investors.
Massive Growth :-
Residential crowdfunding is expected to more than double worldwide
$2.7Billion in 2012
$6.1Billion in 2013
$16.2Billion in 2014
and is expected to raise a further $96bn till 2025, according to a report by Massolution.
If you get in now, you’ll be part of a GROWING market that gives power to the people, and that is already changing fundraising and investing as we know. Think it has massive potential.