Banker & Tradesman may have spotted a very interesting new trend: Crowdfunding for real estate deals.
The SEC recently OK’d new rules for crowdfunding, usually associated with tech companies and other hip projects in which hundreds of people offer to help pay for the venture.
But Jilliene Helman has something else in mind:
Helman’s company, California-based Realty Mogul, is planning to use the model to fund new commercial and residential developments.
“Non-accredited investors haven’t had the opportunity to invest in these private investments for 80 years,” said Helman. “To date, we’ve been limited to accredited investors. We’ve invested about $8 million over the past seven months, but that’s all been with accredited investors. So with this new law, we’ll be able to open that up to a wider market.”
Helman’s firm provides both direct equity to larger projects and maintains portfolios of loans secured by real estate.
“Our loans could be as small as $100,000 or $150,000, or even smaller than that. Sometimes we’ll have a pool of $8 million in loans, but we can provide access to an investor on a loan by loan basis,” she said.
It’s kind of wild when you think about it, yet also very logical.
And why use it for just new developments? Why not just use it to buy existing homes and rentals?
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Updated: January 2018