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How to Raise Real Estate Money Through the Crowd
How to Raise Real Estate Money Through the Crowd

How to Raise Real Estate Money Through the Crowd

2 minutes, 7 seconds Read

BY NOW, YOU’VE PROBABLY HEARD HOW CROWDFUNDING is changing the way people get and invest money for real estate. But did you know that the Statue of Liberty was America’s first major crowdfunding project?

WHAT IS CROWDFUNDING?

Crowdfunding is taking the power of a group of people (a “crowd”) to raise money for a real estate or business deal or project.

And that’s how the Statue of Liberty got the base on which it was erected.

THE STATUE ITSELF WAS A GIFT FROM FRANCE, but the U.S. didn’t have the money for a pedestal to stand it on. To get it built, publisher Joseph Pulitzer started a fundraising campaign in his newspaper The New York World.

THE STATUE ITSELF WAS A GIFT FROM FRANCE, but the U.S. didn't have the money for a pedestal to stand it on. To get it built, publisher Joseph Pulitzer started a fundraising campaign in his newspaper The New York World.

THE CAMPAIGN RAISED MONEY from more than 160,000 people, including children, business owners, and others, with most donations amounting to less than a dollar each. The total raised, at today’s prices, would be more than $6 million!

TODAY, PEOPLE ARE USING THE SAME CONCEPT to raise money to fund their real estate deals.

HOW CAN YOU GET STARTED WITH CROWDFUNDING for your company or real estate project?

First, you need to:

  • Understand that crowdfunding is carried out on the Internet, through websites known as crowdfunding portals or platforms (see list of top real estate crowdfunding platforms below)
  • Learn how the portals work and get to know the rules for participating (Since crowdfunding is relatively new, laws that affect it are still evolving. In early November of 2015, the U.S. Securities and Exchange Commission adopted final rules to permit companies to offer and sell securities through crowdfunding, as part of the JOBS Act. The new crowdfunding rules and forms will become effective later in 2016.)
  • Become familiar with the various real estate crowdfunding portals and find which ones might work for you (for example, some portals specialize in commercial real estate or in specific geographic areas)

ONCE YOU’VE DONE YOUR RESEARCH, take these easy steps:

  1. Prepare a written business plan for your deal or project
  2. Visit as many real estate crowdfunding websites as you can or contact them using the list of real estate crowdfunding portals below.
  3. Read each website’s “About Us” and “How It Works” sections
  4. If you like the way the site works, sign up (register) and continue with the following steps; if the site doesn’t meet your needs, move on to the next site
  5. Follow the website’s instructions for listing your deal
  6. Submit your business plan and funding request
  7. Monitor your crowdfunding campaign to see the crowd’s money coming in

Use These IW$ Resources to Master the Skill of Crowdfunding

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