Investing In Land - Buying Land Through Crowdfunding
In the Internet age the concept of raising money in small amounts from a wide network of investors has crystallized in crowdfunding websites such as IndieGoGo, Kickstarter, and GoFundMe. Millions of dollars are being raised every day in support of knick knacks or inventions or YouTube projects. If you can dream it, you can raise money for it through crowdfunding.
In 2012 Congress legislated the JOBS Act into existence which made it possible to raise corporate equity. It was not like you could pony up $100 and grab a piece of the next hot start-up, however. Only accredited investors with a net worth of one million dollars or a verified income of $200,000 per year could participate. Now the equity markets have embraced crowdfunding for real estate. In the past year more than $100 million has been raised to purchase properties
across the United States. Crowdfunding outfits that cater to everyday land shoppers are beginning to sprout up like weeds in a vacant lot.
And why not? Crowdfunding may have gotten its start with a real estate deal. When France gave the United States the Statue of Liberty as a present the gesture was certainly appreciated but there was no place to put Lady Liberty. It took a newspaper publisher, Joseph Pulitzer of prize fame, came up with a solution. He initiated a fundraising campaign and promised to print the name of every donor in his New York World newspapers - regardless of the size of the donation. Pulitzer was able to raise the necessary $100,000 to construct a pedestal on Bledsoe's Island in New York harbor. He had to print 120,000 names, 100,000 of whom had pledged less than a single dollar.
The crowdfunding platforms perform the due diligence for the buyer including checking references and tearing down the financials. Most deals require a holding time of at least three years and the most popular properties to finance are worth between one million and four million dollars but requirements are changing on this fast-changing playing field. If you want to begin investing in land but lack the financial resources or experience to go it alone and still want to invest in real property
crowdfunding can serve as a bridge to the future.