Real estate crowdfunding platform Small Change is raising capital for a homeless housing project in Los Angeles.
As most people may know. Los Angeles has a profound problem with its growing homeless population and the city is struggling to come up with solutions.
To quote the securities offering:
“The Bungalow Gardens project offers an opportunity to invest in real estate while helping to innovate small-scale, privately-financed solutions to Los Angeles’ homeless crisis… Tenants for the project will be placed into Bungalow Gardens using the Los Angeles Coordinated Entry System(CES), a countywide system that identifies individuals in need of housing and services and connects them to available housing resources and services that best fit their needs. Licensed and certified Intensive Case Management Services (ICMS) providers will provide onsite wraparound supportive social services to all tenants at Bungalow Gardens.”
Under Reg CF, the securities exemption being used by Small Change, any investor may participate in the project. Thus, if you are interested, you may help alleviate the housing problem in LA while possibly earning a decent return. The offering is also using Reg D for accredited investors so wealthier individuals are not capped as to how much they can invest.
The structure of the project demands $1.47 million in total funding a loan and a city grant provides the bulk of the financing. Small Change is offering an equity position in the project which ends up being more like debt.
Bungalow Gardens is seeking up to $100,000 on Small Change. As it stands today, 22 investors have committed $31,000.
So what do you get when you invest?
Investors receive a straight 9% annual return on their capital. After 5 years, it is expected that the project will be refinanced which provides an exit for individuals. Small Change provides an example of returns – so if you invest $2500 you receive $3625 back – if all goes well.
A 15 year rental commitment by the County of LA should help mitigate some of the risk. The project says it should be ready to break ground at some point this fall.
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