Fintech is a growing phenomenon in the real estate sector as industry players look for innovative ways to bring projects to market.
A few months back I had the pleasure to converse with Bob de Wit, CEO of the Greater Vancouver Home Builders’ Association (GVHBA), about the emerging option of real estate crowdfunding.
Bob had some frequently asked questions by developers and investors when discussing crowdfunding in real estate, so I have written this article to share these insights with readers. While there was some focus on regulations in B.C. in the article, the insights here are pertinent to developers and fintech enthusiasts across the country.
Bob: Why crowdfund real estate?
Bret: Investors are attracted to the returns, diversification, and access to new deals, flexibility and speed.
Developers see real benefits in a new pool of investors at a much lower cost than traditional funding avenues as well as the ability to obtain community support for projects.
Bob: How would you define the target audience — what’s the profile of the developer most likely to use crowd funding?
Bret: That is a great question. I’ve written another article for ITBusiness.ca that features a snapshot of the current traction in Canada today featuring insights from leading Canadian portals NexusCrowd and R2. Learn more here.
The experience in the U.S. is all over the place. Tons of fix and flips but also extensive multi-family residential, resort development, commercial and industrial. In other words, all sorts of developers are involved so the profile is broad.
I’ve also identified some developer profiles that would be most likely to use crowdfunding. For these and more, see the full conversation on ITbusiness.ca here. I hope you find these insights on financial technology’s application to real estate development interesting and I encourage you to reach out with any comments or questions related to this space.