Crowdfunding for REAL ESTATE…The Next BIG THING??

Posted on Mar 6 2017 - 6:22pm by Lance Edwards

cc-logo-04-300 Hey Gang:

Thanks for taking a few minutes to check out this information!

As many of you know, here at Capital Connection our business model is to invest most of our time, energy and resources into locating the best, most competitive and off the radar sources of capital in the Nation.

We have been very successful and are VERY excited about some new developments that you may not have heard about and I’d love to share.

That of course is today’s subject of Crowdfunding for MULTIFAMILY FINANCING, and is it the next big thing?

YES!  I absolutely believe this IS the NEXT BIG THING for lending in general!

I’ll get into all of the reasons shortly, but I find this to be an extremely exciting time to be involved in investment real estate whether as a borrower or a broker, things are looking quite bright indeed!

Crowdfunding actually first gained traction in the United States when Brian Camelio, a Boston musician and computer programmer, launched ArtistShare all the way back in 2003.

Fast forward a few years.

Many are familiar with sites like Kickstarter.com or Gofundme.com.  These sites are both relatively new starting in 2009 and 2010 respectively.

Also known as peer to peer to lending, these sites allow people from all over the world to put some money into a project or cause of their choosing.

Billions have been raised using just these two sites (Platforms) alone.

Then, we have peer to peer consumer lending sites like Prosper.com, Lendingclub.com or SoFi.com

Many sites of this nature offer personal loans, bad credit loans, business loans and debt consolidation loans.

These sites are much more similar in nature to the Real Estate Crowdfunding Platforms in some important ways that you will want to understand.

Here, like the real estate platforms, individuals have the opportunity to INVEST their money into the platform and ultimately the consumer loans of their own choosing.

So, every platform essentially has TWO sides.

The Investor side, (someone who is putting their money with the expectation of a return on investment),

And, the “Borrower” side where someone is applying for a loan.  (This is the side that we are very interested in and heavily focused on here at Capital Connection)

As mentioned there are many platforms for P2P consumer loans out there now and they all have different credit tolerance ranges, rates, terms, loan amounts etc.

Now enter REAL ESTATE CROWDFUNDING!

Getting its start in 2011, real estate crowdfunding platforms work much the same way as the consumer lending sites described above.

On one hand you have investors that can invest their money in the platform and ultimately, they can choose the project(s) that they wish to invest in.

The big upside here is that, depending on the platform chosen, an individual can potentially invest as little as $1000 into a given project.  So if they wanted to invest let’s say, $25K, they could potentially spread that out into 25 Different projects!

While this type of potential diversification is a fantastic opportunity for someone to be able to essentially passively invest in the world of investment real estate, until very recently, it was only open to the Rich- otherwise known as “Accredited” Investors.

(An accredited investor is an individual that has a net worth of over $1M, or earns $200K per year.  This is a simplified definition, but you get the idea).

So the big news here is that in late 2015 the SEC voted on and passed rules to implement Title III of the JOBS Act, bringing non-accredited investors into the fold for equity crowdfunding.

Let me say that again, in the spring of 2016, investing in real estate through crowdfunding became available to virtually ANYONE!

I believe this little change is the absolute GAME CHANGER for everyone involved!

It sets the stage for equity crowdfunding to continue its exponential growth over the next 3-5 years, on top of the existing market for accredited investors.

Real Estate Crowdfunding already surpassed VC in 2016 at $34 BILLION THAT YEAR in total crowdfunding online, across all types of crowdfunding.

By bringing in a new class of investors with Title III, we can expect further growth of the equity market as venture capital continues to move online!

On our end things are really opening up all over!

There are now real estate crowdfunding platforms for just about every type of project you can imagine!

From very small, 1-4 Unit Investment property lenders, Multifamily of every size, class, to very large commercial projects, to Equity participation.  The range is vast.

Most of the platforms also tend to be VERY competitive.  They are typically very high tech and their underwriting is precise and expeditious.

Not to mention that with the new rulings, access to endless capital inflows.

However, there are some down-sides that I must share.

First, this is all very stage.  There has been a flood of platforms rushing into the market.  It is our opinion that many will not survive as we’ve already witnessed some casualties.

At the time of this writing Capital Connection is deep vetting over 85 Real Estate Crowdfunding Platforms.

Here’s a tiny portion of the list to give you an idea.  Ask yourself how many of these you’ve actually ever even heard of- maybe one, two or three even?

For me, it was only three when I first began this research…and I’m immersed in this stuff every day…

1031CrowdFunding.com     AcquireRealEstate.com    ACrowdfundingRealEstate.com

AmericanColonialCapital.com     BecoVillage.com       BlackHawkCorp.com

BlockShares.com          Cadre.com        CarltonCrowdfund             CityFunders.com

Coassets.com      CreativeEquityGroup.com      CreEquity.com         CrowdFlipr.com

Our model is to find the cream of the crop, learn everything about them and them make them available directly though our online “Smart Filter”.

Again, Capital Connection is working hard to solve this particular problem through our business model.  Currently, to our knowledge there is no other consolidating source of sources like ours.

Summary:

Whether you are an investor, a borrower, or a finance broker this should be very good news.

Investors now have an excellent way to spread their risk and get the upside potential that investment can real estate represent!

This creates essentially an endless flow of capital to many real estate crowdfunding platforms (lenders)!

Borrowers now have MANY NEW COMPETITIVE OPTIONS!

We strongly believe that Real Estate Crowdfunding is absolutely the next BIG thing for MULTIFAMILY FINANCING.  In fact we believe that is very likely to be the way we all get our financing for literally everything we borrower in the future.

It’s THAT GOOD!

Well, I hope you’ve had your eyes opened even just a little to what is out there for you!

You now know about this world that many are not even aware of, or know very little about…

Do your homework!

Or if you like, we can help you figure this all out along the way; it’s a lot to keep up for sure.

Thanks for your time.

All the best,

P.S   Please see some current awesome and unique options we have direct access to are:

FHA financing UNDER $1M!!  This is the HOLY GRAIL of MULTIFAMILY LOANS AND IT’S EXTREMELY DIFFICULT TO FIND ANYWHERE EVEN UNDER $2M-  RATES ARE EXTREMELY LOW WITH TERMS AS LONG AS 35 YEAR, NON-RECOURSE, ASSUMABLE, CHECK WITH US TO SEE IF YOU QUALIFY!

Fannie and Freddie UNDER $1M!!  Same deal here- this is a highly sought after loan product and we have direct access to a lender that will do these under $1M on case by case!! Take advantage of these rates and terms NOW!

Best options for TURN-AROUND OPPORTUNITIES:   UP TO 80% OF PURCHASE AND 100% OF REHAB AVAILABLE!

Small Balance Loans:   Deal too small for the bank?  We have the BEST options you will find for deals both BELOW and ABOVE $1M Loan amount!  We can all the way down to $25K loan amount and anywhere above!

 

Lane