Experience with Real estate crowdfunding platforms
Curious to know other’s experience with CRE crowdfunding platforms. 🙏
[{"id": "g4l9691", "text": "I\u2019ve always regarded them as a joke bcs why wouldn\u2019t a good deal be able to get capital?", "replies": [{"id": "g4lh2aj", "text": "Wait... you mean getting a 19% CoC return, 25% IRR, 2.5x equity multiple, and owning a stake in the Empire State Building isn\u2019t realistic?? I have to make some calls.", "replies": [{"id": "g4m5h55", "text": "I can get you that deal.  FYI.\n\nEdit: minus Empire State Building, plus new construction institutional quality assets.", "replies": [{"id": "g4ocbtq", "text": "I can too... on my own projects. Not when it comes to crowdfunding platforms. They have been proven to return fractions of what they advertise time and time again", "replies": [], "depth": 4}], "depth": 3}, {"id": "g57ey28", "text": "Hey, you're talking about the second deal Helmsley ever bought so it could happen!", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g4leaki", "text": "That makes sense.", "replies": [], "depth": 1}, {"id": "g4lpedi", "text": "Why are you crowdfunding real estate? Looking for hard cash? What are the numbers?", "replies": [], "depth": 1}, {"id": "g4lq3xu", "text": "How about a platform designed for mid size syndications who want to get connected to other accredited investors outside their own investor pool. More like a marketplace with realistic returns unlike many of the current platforms?", "replies": [{"id": "g4lu5au", "text": "Just my two cents: If it\u2019s a good deal, why wouldn\u2019t a PE shop invest before it goes to the crowd funding platform? Why would a sponsor want to deal with the crowd funding when a PE firm would offer a much higher level of surety of execution.", "replies": [{"id": "g4o2z80", "text": "The typical deal size of what you find on crowdfunding platforms is below the deal size most PE shops want. Plus, the Sponsors often don't want to give up control of the deal or jump through the other hoops they require.", "replies": [{"id": "g4o6kxx", "text": "Fair enough. Good point.", "replies": [], "depth": 4}, {"id": "g57f71o", "text": "Can't upvote the control thing enough.  I like it when I'm participating on the PE side.  As a sponsor? I'm not looking for a job.  On a very related note, the economics PE wants and fees they'll accept are completely different than other investors.", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "g4lv755", "text": "You need to first differentiate between the different types of platforms and what your goals are to determine what makes sense and what doesn't. Reg A+ = Fundrise. 506b=RealtyMogul. 506c=CrowdStreet/RealCrowd. If you're a Sponsor and want to raise equity from accredited investors and potentially get a relationship with them for future deals then 506c is the best option. If you simply need equity for a deal then Fundrise or RealtyMogul is the way to go. If you're an investor I would avoid Reg A+ and 506b because all you are getting is added fees and a middleman that can complicate things when a deal goes bad. \n\nJust because a deal is on a crowdfunding platform does not mean it is a bad deal and can't get funding elsewhere.  Don't get me wrong, there are A LOT of bad deals on them but Sponsors go to them for a lot of reasons.", "replies": [{"id": "g4ylf7p", "text": "Yeah in fact often times syndicators will work with these platforms for part of their capital raise and count it as pref equity. Equity Multiple has tried to invest in a couple of our deals and we just didn\u2019t have room for them.", "replies": [], "depth": 2}], "depth": 1}]