Crowdfunding Real Estate: An Emerging Trend

We’ve all seen examples of crowdfunding in it’s various forms. Usually posts are circulated around Facebook and share the users story in order to gain some donation from friends willing to help. The tactic to raise money can be used to gain support for college tuition, gadget development, surgery costs, or even to buy a new bicycle! Crowdfunding can essentially be used for anything and when backed by the massive power of social media available at everyone’s fingertips, the trend is quickly catching on and taking new shapes. It’s newest face? Real estate.

So how exactly does crowdfunding work? Essentially it’s asking for funding for an idea, project, or virtually anything imaginable and giving back a small thank you contribution to those who support your crowdfunding proposal. Therein lies the challenge when it comes to real estate crowdfunding…giving back. But with this bigger challenge lies a possibility for a greater reward. When a contributor invests in a real estate project, they are given a piece of ownership to the business venture. In the event that the crowdfunded real estate project is successful, the benefactors could garner a major return.

Just in the last year alone, a handful of real estate crowdfunding websites have sprung up and raised massive amounts of supporters backing the projects. Even real estate pros are taking notice of the crowdfunding techniques and giving it a try on their own like Jay Massirman, who has been in the real estate business for over 30 years. Massirman decided to try his hand at crowdfunding for an Orlando project although it would be his first time using the technique to gain support. In the end, who’s to say that crowdfunding for real estate won’t be a massive success? Although it is too early to tell right now, the idea of owning a piece of a successful piece of realty is enough to drive influential investors to the idea.