Hot Topic Alert: Real Estate Crowdfunding

REALTOR Party

Hot Topic Alerts are occasional reports that highlight important trending real estate issues in state legislatures. The data contains a concise summary of information on a topic that has generated attention over the past six to twelve months. Hot Topic Alerts will include advocacy efforts of local REALTOR® associations. The latest alert has to do with real estate crowdfunding.

“Crowdfunding” is a term much in vogue recently. Traditional lending sources are bypassed with crowdfunded projects, allowing individual investors to directly evaluate a proposal based on their own criteria or financial interests. The system has populist appeal: in theory, crowdfunding enables those who would otherwise be denied access to capital to move forward with a crowdfunded platform.

Inevitably, crowdfunding grew to encompass real estate finance. The idea spread quickly: one estimate is that the number of real estate crowdfunding platforms went from 10 in 2013 to 75 by January of 2015. Another estimate is that there are over 100 self-described real estate crowdfunding sites (although the author of that piece notes that some crowdfunding sites may be “old-school real estate broker sites in disguise.”). Enthusiasts claim that crowdfunding has brought benefits not only for investors but also for real estate companies and for the real estate market as a whole.

Read the full report

Source: National Association of REALTORS(R)

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