crowdfunding became more
broadly available to investors in 2012. That year, the Jumpstart Our Business
Startups Act (JOBS) was passed. It relaxed the eligibility requirements for
individuals who want to invest in crowdfunding realty; a net worth of $1
million is one of the criteria. Conventional real estate investing often required
a commitment of hundreds of thousands, if not millions of dollars. The average investment size for crowdfunding real estate projects is several thousand
Landlords and developers are also benefiting because it gives them another potential source of capital besides banks and more traditional financing options, which typically have more stringent requirements. According to a June 2014 Wall Street Journal article, a number of real estate
crowdfunding websites had collectively raised $135
million in equity and debt for a wide variety of owners and developers.
One of the big benefits of real estate crowd funding is the diversification it provides on many fronts.
Some real estate markets are booming and others are depressed. Through
crowdfunding, investors have no
geographic limitations and can pick and choose the part of the country in which
they want to invest.