If You Were a Rich Man

You don't have to be rich to invest in a building. Yet another firm is tapping Joe Sixpack for real estate funding. GroundFloor has quietly launched with hopes to raise $300k for a small Midtown apartment renovation loan (748 Charles Allen Dr). And it's already raising $275k--with as little as $100 per investor via its Website--to refinance a Woodstock townhome cluster. GroundFloor's Brian Dally tells us the firm has garnered $56k in pledges toward 748 Charles Allen Dr, a quadruplex in Midtown. Local investor Pat Gilroy purchased the property out of foreclosure with plans to spruce it up.

GroundFloor isn't the first with the idea, but it is first to actually begin crowdsourcing funds for real estate investments, something that only registered investors were able to do until a recent change of law in Georgia. We recently spoke with CrowdVested's Grady Thrasher (pictured here), who also is looking for CRE projects to finance with as little as $500 down from investors. Brian says investors who buy in are promised a sliding return based on how early you jump in (currently at 8.75%) on their investment in a year, when the loan matures.

What next? Aside from 784 Charles Allen Dr (here) and the Woodstock refi, Brian says crowdsourcing could prove popular with mom and pop investors who want to get into real estate lending without much risk. "My sense is the Web has a broad appetite for secured lending. We're just cutting the bank out of the middle." (We hope banks have a hobby.) GroundFloor, which opened in February, will look for other projects to finance around metro Atlanta, Brian says.

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