Is Real Estate Crowdfunding Legit?
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Real estate crowdfunding has expanded to over three times the size it was in 2014, but as investors weigh the new marketplace one question abounds: is it gold or fool's gold?
Investors poured $484M into real estate crowdfunding projects last year and the US has more than 125 real estate crowdfunding sites, Bloomberg reports.
But how many of these sites are actually functioning as a marketplace? Ian Ippolito has been tracking the proliferation of real estate crowdfunding platforms, and after looking at more than 100 sites he’s concluded only one in five meets his transparency, low fees, active investment opportunities and venture capital backing qualifications.
And we can see why—when investors see Craigslist postings like this one, where an entrepreneur is seeking $50k to fund a real estate crowdfunding startup, they don’t usually reach for their checkbooks. [Bloomberg]