Real Estate Crowdfunding: A Trend That’s Here to Stay

The playing field is becoming more level for small investors thanks to a slew of real estate crowdfunding websites sprouting up across the web.

The crowd-sourced investment websites have become an expansive trend in the industry. In the last year, an estimated half a billion dollars pooled into sites like realtyshares.com, realtymogul.com and realcrowd.com.

To keep it sweet, it’s the trend that’s here to stay for commercial real estate. And for the next week, MyNOI will be covering the details you need to know when getting involved.

Realty Shares commercial real estate crowdfunding

Just over a year ago the U.S. Securities and Exchange Commission (SEC) opened doors to permit the use of the popular investment platform in an effort to help small investors acquire capital and additional protections under the law.

Regulators adopted A+ Offerings, which in turn expanded asset classes to two tiers, ranked between $20 million to $49.9 million and $50 million and above.

Real Crowd commercial real estate crowdfunding

In a statement released near the time of the adoption of the final rules, SEC Chair Mary Jo White stated he following: “There is a great deal of enthusiasm in the marketplace for crowdfunding, and I believe these rules and proposed amendments provide smaller companies with innovative ways to raise capital and give investors the protections they need.”

And investors are noticing. For the first time, accredited investors — or, someone who’s valued at $1 million and makes equal to or more than $250,000 per year — aren’t the only ones who can have a stake in crowd-sourced campaigns.

Realty Mogul commercial real estate crowdfunding

The regulations have gone a long way. Based on my experience owning my own share in one of these sites, they’re growing in popularity because they’re reaping returns. By next year, I expect the number of dollars invested in these sites to double.

Now, I’ve already identified the top brass in the real estate crowdfunding sites today, but I’ll also recommend a valuable place to search for reviews and rankings as well as stats on fees or other features on the hundreds of crowdfunding options available.

It’s called realestatecrowdfundingreview.com and it offers readers the top 100 real estate crowdfunding sites on the web today. So if you’re looking for facts and figures, check it out.

commercial real estate crowdfunding review

You’ll find that many these sites have similar components. Often, you’re presented with several properties detailing the project, the developer or investment group as well as their investment and project history and return.

By law, parties leading the crowdfunding effort will need to disclose the amount of money they’ve put in as well as their intent for the property.  

As an investor, it’s your choice to drop a dollar in several properties or just one.

So take a careful look at your options and consider giving real estate crowdfunding a shot — I predict it’s here to stay.

Troy Muljat

Troy Muljat is a Washington State certified commercial appraiser and broker with over 25 years of experience in the commercial real estate industry.

He specializes in brokerage, leasing, property management, development, and commercial appraisal.