Commercial real estate is the ideal vertical for crowdfunding for several reasons, including the industry’s transparency, according to a new white paper from Atlanta-based commercial real estate crowdfunding platform CrowdVested. Real estate crowdfunding enables people to join with neighbors to invest in development projects in their communities. Most people have certain innate understanding of real estate because buying a home was their first major investment. And through access to public records and comps, real estate offers more information to everyday investors than virtually any other investments.
CEO of CrowdVested Grady Thrasher stated, “We are really excited to release this white paper today, which explains the history of real estate crowdfunding and breaks down how equity crowdfunding deals work. Perhaps most importantly, the white paper outlines seven questions potential investors should ask before participating in a deal.”
The white paper comes as CrowdVested gains momentum on its first campaign, which it announced in late April in conjunction with Atlanta-based Paces Properties. Paces seeks to acquire, renovate and lease seven largely vacant retail building in the East Atlanta Village of Atlanta. Paces is raising a piece of its financing through crowdfunding.
Mr. Thrasher noted, “This is an exciting time for CrowdVested because we are receiving such a positive response to our first campaign. It is an ideal time to educate investors about crowdfunding, how it works and how to evaluate deal. Commercial real estate crowdfunding is only going to become more mainstream, and therefore many everyday investors are interested in learning about it.”
Equity crowdfunding allows investors to pool their money to help fund a project or business in exchange for a share in that enterprise. Currently, only accredited investors – those with a certain income or high net worth – can invest in crowdfunding projects for equity, except in a few states like Georgia that have created intrastate exemptions.
CrowdVested operates under the Invest Georgia exemption, which allows Georgia residents, both accredited and non-accredited investors, to invest within the state. “Georgians have a unique opportunity to invest in commercial real estate and to participate in projects that improve their communities,” Mr. Thrasher explained. “We are pioneers in a new way to finance real estate deals.”