By Lauren Keyson and Barbara Gesteira
Crowdfunding in real estate is allowing individuals to invest in real estate assets that in the past were only open to family offices, hedge funds and institutional investors
FundingPost ran its regular summer real estate conference a bit differently this year. It was not only focused on real state crowdfunding, but there was also a Regulation A workshop and a mastermind class. The event was made up of family offices, real estate entrepreneurs, real estate investors, crowdfunders and crowdfunding platforms. Everyone there had the opportunity to meet and discuss the new regulations that have come down, the new opportunities as far as crowdfunding and the different crowdfunding platforms that are available. We talked with Joe Rubin, founding member of the ARC Angel Fund, to get a feel for the event.
Joe Rubin: “We are not doing the traditional real estate event that I usually do, where I have the panelists on the stage and five hundred people in the audience. This time we really shrunk that down and put everyone around a giant board room table and let everybody participate. So we have a panel, but we’re making it very, very interactive for everyone in the room to ask questions, participate and give answers to other people as well: ‘What do you need? What are you working on? How can everyone in the room help you? Are you going in the right direction’?
One of the main questions asked was, ‘How can I get more money in a better way’? and ‘How can I get it at a better rate’? We also answered a lot of other questions like ‘Which platforms are the better ones to use? How long does this typically take? How can I make my crowdfunding offering attractive to other investors? What kinds of terms are they looking for’? Things like that.
Why Real Estate?
“Real estate and crowdfunding go very well together. Yes, there’s lots of crowdfunding out there, and you hear about the ‘Kickstarters’ of the world and about the equity crowdfunding itself. But real estate in crowdfunding is a tremendous opportunity – there are a ton of real state crowdfunding platforms — just a ton of money being raised for real estate all the time.
One of the reasons I choose this industry is that when you look at real estate, it’s backed by something, there is an interest rate involved and people are used to investing in real estate. I typically play in startup-land for tech companies. It’s a little riskier — there is nothing backing it, there is nothing behind it. But if the real estate play runs out of money, you can still liquidate it. But it’s tough to liquidate software. Tougher anyway.