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Protecting Yourself in Crowdfunded Real Estate

August 5, 2014
Crowdfunded House

The burgeoning Crowdfunding platforms as they relate to real estate could be changing the game.

It’s difficult to read the latest tech or business news without hearing something about the burgeoning microfinancing system known as crowdfunding. The idea behind crowdfunding is simple a lot of people with a little money equals a lot of money. Once raised, the cash can be used for pretty much anything.

Kickstarter, the most well-known and popular crowdfunding platforms specializes in artistic projects and consumer goods. It can be your go-to to finance your indie movie or that video game you’ve always wanted to develop. Kickstarter also serves as a facilitator for amateur inventors to improve upon existing products. Ryan Grepper recently skyrocketed to entrepreneurial fame when his unique take on your average cooler exceeded its funding goal on Kickstarter by more than $8 million.

While there is always the danger of an unscrupulous project, the power of crowdfunding is growing by the day. The word “democratized” has been beaten like a dead horse in the internet age, but that is what crowdfunding has done for average people looking to contribute to a product or project they believe in.

While the majority of newsmaking crowdfunding projects are consumer goods or forms of entertainment (think Zach Braff’s controversial film Kickstarter project), platforms like Kickstarter are beginning to pop up in other industries. Real estate seems to be one of the areas most ripe for a foray into crowdfunding. The prohibitive cost of real estate investment makes the microfinancing aspect attractive to the average person. Think of it like a timeshare where you can actually make your money back and then some. In fact, crowdfunding is already happening in the real estate game.

Check back soon for more or read the full article on the LA Times Real Estate Blog.

via Gary Richetelli


From → Gary Richetelli

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