Dec
31

Crowdfunding: The Next Big Thing in Real Estate?

December 31, 2014

CrowdfundingCrowdfunding has become a popular way for those with big ideas and small bank accounts to find needed funding. Websites such as Kickstarter have made the practice increasingly popular, as it allows entrepreneurs to connect with a large pool of potential backers through the Internet.

The most recent industry to take advantage of crowdfunding is real estate. Multiple investment websites have sprung up, allowing individual investors to participate in real estate deals that large organizations or corporations were previously the only ones privy to.

Now, real estate crowdfunding websites allow potential investors to start with as little as $100. However, many of the sites require at least a $10,000 investment, while most make investors be accredited. This means that investors must make more than $200,000 per year, or $300,000 with a spouse, in each of the two years prior or have a net worth greater than $1 million. The net worth amount does not include the value of a primary residence.

To allow more potential investors to participate in real estate crowdfunding, the Securities and Exchange Commission (SEC) is trying to change the definition of ‘accredited investor.’ Until that definition is changed, there are some crowdfunding websites available, such as Groundfloor.us, that are open to non-accredited investors.

To learn more about crowdfunding and how it works in real estate, read “

Using Crowdfunding to Invest in Real Esate,” an article on the Equifax Finance Blog.

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Courtney Rogers

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