Crowdfunding brings real estate investment to the people

Startups pursue strategy to improve transparency, generate building buzz

New York /
Feb.February 19, 2014 03:10 PM

A number of new real estate startups are bypassing traditional banks and professional investors and instead taking to crowdfunding platforms to finance new projects.

The specifics vary from firm to firm, but all aim to use crowdfunding to make real estate investment more transparent and to generate buzz for their buildings. The funding format is new on the real estate front, as the Securities and Exchange Commission lifted a ban on private companies investing unregistered products in the fall of 2013. “Accredited” investors, or households with a head earning an annual income of $200,000 or a net worth of at least $1 million, may now join the fray — a specification the SEC is also expected to lift at some point, reports show.

“In the wealth management world there are only two big assets: bonds and stock, and this is the creation of a totally new asset class,” Rodrigo Nino, founder and chief executive officer of Prodigy Network, which is crowdfunding its current project at 17 John Street, told DNAinfo. “People have the opportunity to invest in something that wasn’t available before.”

Other crowdfunded projects include an apartment building at 151 Dupont Street in Greenpoint, Brooklyn, sourced by startup Fundrise, which has so far raised $225,000 of its $700,000 goal via accredited investors. On Fundrise’s next project, a boutique hotel in Gowanus, the company is aiming to raise capital from unaccredited investors with shares starting as low as $100, co-founder Daniel Miller told DNAinfo.

“We’re very focused on allowing everybody to invest in real estate,” his brother, also a co-founder, Ben Miller, told DNAinfo. “When you walk around your neighborhood, who owns the buildings, who’s profiting from it? Not you, and that’s not how it should be.” [DNAinfo] — Julie Strickland


Related Articles

arrow_forward_ios
84 William St, NY and 1400 N. Orleans St, Chicago (Google Maps, iStock)
Prodigy Network files for bankruptcy as lawsuits mount
Prodigy Network files for bankruptcy as lawsuits mount
AKA United Nations at 234 East 46th Street (Google Maps, iStock)
Bank forecloses on Prodigy’s AKA United Nations hotel building
Bank forecloses on Prodigy’s AKA United Nations hotel building
Photo illustration of Rodrigo Niño, with Shorewood's Larry Davis, 84 Williams Street and 331 Park Avenue South (Getty, Google Maps, iStock)
Behind the biggest real estate crowdfunding implosion
Behind the biggest real estate crowdfunding implosion
84 William Street with Vanbarton Group's Gary Tischler and Richard Coles (Google Maps)
Vanbarton takes control of Prodigy Network’s William Street hotel
Vanbarton takes control of Prodigy Network’s William Street hotel
AKA Wall Street at 84 William Street (Google Maps)
Prodigy Network’s AKA Wall Street hotel closes permanently
Prodigy Network’s AKA Wall Street hotel closes permanently
331 Park Avenue South (Google Maps)
Investors accuse Prodigy Network of fraud at troubled Park Ave development
Investors accuse Prodigy Network of fraud at troubled Park Ave development
PeerStreet co-founders Brew Johnson (CEO) and Brett Crosby (COO)
Crowdfunding platform PeerStreet launches debt fund for Covid-era opportunities
Crowdfunding platform PeerStreet launches debt fund for Covid-era opportunities
114 East 25th Street (Google Maps)
Troubled crowdfunding firm sells building at $10M loss
Troubled crowdfunding firm sells building at $10M loss
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...