Earlier this year Mainstreet Property Group, via a partnership with CrowdStreet, offered accredited investor to participate in a offering of a senior care – assisted living facility in Indiana. While the bulk of the financing was accomplished via traditional bank financing (over $10 million) a portion of this amount was delivered via crowdfunding. Approximately $1.8 million was facilitated by CrowdStreet impressing organizers sufficiently to declare a crowdfunding record.
The dramatic crowdfunding success for a company that has been in the real estate development world since 2002 has caused the company to assess the shifting landscape of real estate finance. Recently Mainstreet CEO Zeke Turner was quoted in IBJ.Com sharing his perspective stating;
“What we learned here is that this mechanism works,” Turner said. “I’d be surprised if we don’t use something very similar to this” in the future, perhaps offering investors a stake in a portfolio of construction projects.
The report states that crowdfunding could “even help the company boost its annual construction of nursing homes from $350 million to $500 million”.
Turner shared he spent far less on leveraging the internet than he would have paid in broker dealer commissions if he had gone the traditional face-to-face, time intensive process of doing a private placement. The project attracted investors from California to New York – in a brief amount of time.
Turner states the obvious about crowdfunding declaring;
“It looks lie a more efficient form of fundraising”
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