1st Crowdfunded Real Estate Investment Trust

LOS ANGELES--(BUSINESS WIRE)--RealtyMogul.com, a leading online marketplace for commercial real estate investing, today announced the launch of its first commercial real estate fund, MogulREIT I. Structured as a real estate investment trust (“REIT”) with a minimum investment of $2,500, the fund is open to nearly all* investors and offers the potential for consistent cash dividends and equity appreciation.

MogulREIT I has been designed to offer investors a number of distinct advantages. By investing in the “REIT,” investors will gain access to a diversified pool of commercial real estate investments with one single investment. The fund intends to invest in a variety of commercial real estate, including multifamily, retail, self-storage and office.

The fund is also designed to have low fees. Traditional non-traded “REITs” employ a highly manpower-intensive sales method, resulting in upfront sales commissions of 7 percent, on average, and total expenses of up to 15 percent.** By offering MogulREIT I exclusively on its platform, RealtyMogul.com affords investors direct online access to the product with no sales commission and offering expenses capped at 3 percent.***

“Beyond the zero commissions and lower fees, the fund’s strategy is exciting because it allows us to leverage RealtyMogul.com’s hundreds of inbound inquiries for financing on commercial real estate and curate them to find suitable opportunities,” said RealtyMogul.com CEO Jilliene Helman. Read More

Crowdfunding Continues to Change Real Estate Investing By Empowering Investment

Great insights into the changes crowdfunding is bringing to real estate...

The Power of Crowdfunding in Real Estate

Within a decade, they expect online fundraising to become not just accepted, but ubiquitous throughout the industry, as part of a multi-channel approach that will include both traditional sources such as banks and private equity firms, and a direct-to-investor channel.

 “What we’re really talking about is the modernization of how you fund commercial real estate,” said Darren Powderly, co-founder of CrowdStreet, a three-year-old Portland, Oregon–based firm that provides an online platform for real estate developers and managers to raise capital from investors. “Ten years from now, it’ll be a no-brainer. People will be saying, ‘Of course, I raise money online.’ ” 

In some ways, CrowdStreet exemplifies the conceptual evolution of real estate crowdfunding. The venture capital–funded startup’s main thrust has been building a marketplace in which institutional-quality real estate investments—both debt and equity—are offered to a database of accredited investors. In that fashion, CrowdStreet has done 40 deals with an average raise of about $850,000, Powderly said. “We could have done 400 deals, but our marketplace is highly curated,” he said. Last year, CrowdStreet debuted a new product called Sponsor Direct, a “white label”—that is, rebrandable—version of its software that allows developers to do crowdfunding on their own websites as well.

According to GeekWire, more than 20 real estate firms already are using it. “Clearly, technology is dis-intermediating, disrupting,” Powderly said. “This is happening in every industry. It’s shocking that it isn’t happening even more rapidly in our industry, commercial real estate. But it is happening.” Panel moderator Martin S. Burger, chief executive of New York–based real estate development, investment, and management firm Silverstein Properties, said that one of crowdfunding’s advantages is the potential ease of providing investors with documentation.

As an example, he cited the platform developed by Fundrise, which allows investors to pull up information such as construction budgets and commitment letters for projects. “You could touch the transaction,” Burger said.

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Crowdfunding Real Estate Platforms Continue to Evolve With Propellr Becoming Broker-Dealer

Crowdfunded real estate platforms continue to evolve. As Crowdfund Insider is reporting, Propellr Becomes a Broker Dealer Raises $1.6 Million in Convertible Debt.

Propellr, an accredited investment crowdfunding platform focusing on the real estate sector, has now registered as a broker-dealer. Simultaneously, via a small group of existing investors, Propellr has raised $1.6 million in convertible debt. Proceeds from the new funding will be utilized for business expansion including compliance and engineering.... Propellr, while having focused solely on real estate, said it intends to broaden its approach and is in the “process of rolling out multiple innovative alternative asset classes previously limited to a select few.”