Property crowdfunding has exploded over the past year or so, with many people taking advantage of the new and alternative way of jumping onto the property ladder. With real estate being a market that may have posed a number of problems for many people before, this new-fangled way of investing in property has opened doors to the masses.
As an increasing number of companies launch their forays into property crowdfunding though, it’s all too easy to see that competition in the area is growing stronger. For potential investors, this could pose a problem. How do you find a platform that works best for you when a vast number of companies are offering virtually the same thing? With crowdfunding taking off in the real estate world, a select few companies are breaking away from the pack and introducing new concepts to their platforms.
One such company is Fundrise, a commercial crowdfunding platform based in Washington, D.C. It’s true that a vast amount of platforms out there are offering buyers a share in residential properties, so the commercial sector hasn’t seen as much of the spotlight focused on it. However, Fundrise takes the opportunities afforded to its investors a step further.
The platform offers investments from as little as $5,000 for equity stakes in real estate development projects. With such an innovative platform, investors – whether individual or institutional – have already been taking full advantage of the properties on offer. Fundrise features both public offerings available to local investors and private offerings available to accredited investors. Since its first offering in 2012, the company has raised a total of almost $40 million for 45 separate projects across the US, with a total of nearly 50,000 investors.
As with any property crowdfunding platform, potential investors are encouraged to sign up to the website at no cost, giving them the opportunity to browse through the projects on offer. Each listed development gives the buyer information on its risk rating, project financials, market summary and management track records. An investment can then be made on a desired listing, and as with any platform, earnings can be monitored via the website. And while the return on investment differs between projects, the average rate of return for Fundrise investors is about 12 to 14 percent. The company also offers rolling maturity dates of one to three years on average.
While Fundrise has seen considerable growth since its first offering back in 2012, company co-founder and president, Daniel Miller also has big plans in mind for this year. “We hope to do $100 million in 2015, scaled to 25, 30 cities across the country. We’re also looking at Europe, starting in London“, he commented in an interview with the New York Times.
In the world of property crowdfunding, it seems clear that Fundrise has a goal in mind of being at the top, both locally and internationally. And with the amount of interest that the sector has garnered recently, the company has the potential to achieve that exact status.