Real estate crowd funding; Title III, Reg A+, 506(c):
What are your thoughts on the scalability of real estate crowd funding? Especially the indirect method some crowd funding firms are using by using borrower payment dependent notes where the firm is essentially lending borrowed money to the issuer. The real estate crowd funding industry is estimated at around $3.4B. Thoughts about this investment management business model as well as real estate crowd funding in general?
One word REfund. Jk who knows. I think a lot of people will get owned. I can't imagine why you would give someone with less experience $ for crowd funding when you can buy a REIT share (traded on the NYSE) for a few bucks. And the guys that work at a REIT traded on the NYSE actually (at least should) know what they are doing.
REITs do not provide equity ownership in the properties the REIT invests in. Transparency is a huge advantage.
Look if you want transparency fork over $1 MM and call the principal at an REPE firm about how your investment is doing once a month. "Investing" (read donating) $100 to some 8 unit multi value add deal is not the same thing. Just my opinion you may think it's legit and that's fine but I don't.
Fundrise has high level executives with impressive resumes. I have some contacts at the deal level. I sent them a deal that neaded PE. They turned it down. I think it's a good thing to know they turn deals down.
RichUncles is a private REIT here in SoCal and their ownership has ponzi scheme written all over it.
Agreed. FundRise is a great firm. Strange though that they use a 3(c)(1) fund but do not abide by the 99 shareholder limit. What do you think about that @PacNumber?
What I am unsure about is they claim to be an eREIT. Is it functioning essentially as any other REIT?
This article says crowd funding "poured" $484 MM into properties last year. Even using leverage that gets you 1 nice office building in manhattan. http://www.bloomberg.com/news/articles/2016-05-09/inside-the-real-estat…
Crowdfunding in my mind is focusing on mid-market deals ranging from $1mil to $10mil. I believe institutional PE will put up capital to companies like Fundrise to spread out their risk.
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