Thoughts on Working for RE Crowdfunding Investment Platform

Question

Monkeys,

I am just curious about your thoughts on working for crowdfunding RE platforms (Fundrise, RealtyMogul, CrowdStreet).

Do you guys think it will disrupt the traditional PE? Some of the platfoms have insane deal flows (deal sizes are smaller) and these deals get subscribed relatively fast with low fees. I personally really like the idea of crowdfunding and investment management. I believe institutional investments should be made available to retail investors.

RE-PE · Accepted Answer

RE crowdfunding's biggest issue is that the target demographic is retail investors who aren't necessarily as strong of underwriters or re investors in general. Even if they are, an re deal rests upon the sponsor's ability to execute. To invest with enough confidence means that you have enough faith in the sponsor--and how would you trust them if the first time you've heard of them is through an online platform?

Another obstacle for RE equity crowdfunding is the difficulty of underwriting these deals, as aforementioned.

teddythebear · Answer

Multiple RE crowdfunding platforms have went under. ifunding is gone, then realtyshares got taken over by some servicers since it could not sustain the model. I dont see it lasting long except a few players might stay for an extended period such as realtymogul. However if you look at all the platforms there have been less and less deals coming. Even fundrise has now switched to a reit like model which doesnt make sense since I'd be better of just buying a public reit that I can liquidate easily. The industry has already matured and multiple players have begun dying out.

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Thoughts on Working for RE Crowdfunding Investment Platform

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Thoughts on Working for RE Crowdfunding Investment Platform

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