Crowdfunding & Real Estate

Every hour in the month of March 2014, more than $60,000 dollars were raised via crowdfunding throughout the world. Yes, that’s right - $60,000 per hour, each and every day. Driven by the same forces as Moore’s Law (the observation that computing power doubles every 2 years) worldwide crowdfunding is currently doubling around ten times faster – nearly every two months. As crowdfunding worldwide continues to gain in popularity, more and more data has shown the industry’s vast potential. Not only did the month of March produce exceptional gains via crowdfunding, but the first three months of 2014 showed total amounts raised by crowdfunding of approximately $124 million. 

Real Estate Industry: Benefiting Most from Crowdfunding

As crowdfunding continues to reshape the present financial landscape, it has drastically reshaped one industry in particular. A little over six months after the Securities and Exchange Commission (SEC) lifted its decades-long ban on general solicitation, the real estate industry seems to have benefited more than any other industry. Since that change in the law, which fundamentally altered the way companies were allowed to raise capital, Crowdnetic reported that the real estate industry raised more than $17 million in investments in April 2014. The next most funded industry was consumer products, which raised $6.5 million – just over a third of what the real estate industry had raised. Today, Realty Mogul alone has raised nearly $22 million from its investors. The rule change, which was enacted as part of the Jumpstart Our Business Startups Act (JOBS Act), made it legal for entrepreneurs to publicly advertise their efforts to raise money. Across the board, investors are benefiting from the new regulation, but none more than investors in the real estate industry.

There are some explanations for the breakout success of the real estate industry. Real estate investments are familiar to many, but properties traditionally required a large upfront sum of money, and were historically mostly limited to one’s personal network. With real estate crowdfunding platforms like Realty Mogul, you can invest with a much smaller barrier to entry and also have far-reaching access to investment options across the country (or even world). While investing at Realty Mogul, investors can share in the potential upside as the building can appreciate over time, while rent can provide cash flows to investor in the interim. The benefits of real estate crowdfunding have clearly appealed to investors, and it will be interesting to see how crowdfunding continues to shape the real estate industry in the future.

Source: Realty Mogul