Real Estate Financing and Marketing is getting transformed by Crowdfunding.
In 2015, approximately $2.6B was raised in real estate crowd funding offerings outside of Canada, primarily in the US. The majority of funds raised were for residential property development, and fix and flips. Crowd funding is relatively new to Canada. This deck overviews how crowd funding may fit into their financial and business plans.
The Sharing economy is having a big impact on many industries and real estate finance is starting later but will be impacted in a significant manner. Another key input in Vancouver is the impact of foreign investment and we are already seeing the introduction of crowdfunding sites in Asia specifically targeting North American real estate investment opportunities.
Projects of real estate developers, homebuilders and renovators do not always fit within the requirements of traditional bank lending and financing sources, or at times such loans or financing may only be available at sub-optimal terms.
Real Estate Crowdfunding provides an alternative funding option with investors who want to participate in the upside of this asset class.
Real Estate Crowdfunding also increases the efficiency and transparency of capital raising for developers and homebuilders who are already accessing funds from accredited investors and retail investors using an offering memorandum.
