Real Estate Crowdfunding

, ,Alternative Finance Sector Report - October 2014

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PUBLISHED

October 2014

AUTHOR

Samantha Goins

REAL ESTATE

CROWDFUNDING

ALTERNATIVE FINANCE SECTOR REPORT

Rationale for the Report

Real estate is one of the largest and best understood asset classes in existence. The global real estate market is worth over $19 trillion

and investors are familiar with the concept of buying, owning and letting property. From an investment point of view it has been one

asset class that has been dominated by wealthy investors. High minimum investments, high transaction costs, restrictive regulatory

regimes and ongoing operating costs all make it difficult for ordinary retail investors to directly access real estate investment

opportunities.

However, crowdfunding could open up the real estate market to a much wider range of investors. Crowdfunding simply involves the

pooling of funds from a number of investors (the “crowd”) to fund a single project – a project could be a new business, a new product

or a new real estate development.

With low entry levels, easy to use on-line functionality and its status as an alternative to mainstream financial institutions,

crowdfunding has proven to be accessible and popular with early adopter investors. The market is expanding quickly, with over

$5.1bn raised through crowdfunding sites globally in 2013

. The idea has already begun to spread into the real estate sector, allowing

access to property in ways never seen before.

This report will be of interest to sophisticated investors, financial advisers, agents and intermediaries who invest in or are active in real

estate. The content is balanced and impartial and the intention is to educate the reader on the risks and benefits of investing in real

estate via crowdfunding platforms.

The contents will give readers background on real estate investment and how it works in the context of crowdfunding, take a look at

the established platforms and review some of the more popular investment locations. The risks that investors must be conscious of

in the market are looked at in context together with the different ways they can be mitigated and there is also primary analysis on the

latest activity in the market, the type of opportunities available and the different options investors have if they want to participate.

The overall aim is to provide readers with the knowledge they need to make an informed decision about investing in real estate via

crowdfunding platforms. This includes how to access the market, the level of returns they can expect, the risks they need to consider;

the pitfalls they should avoid and where to go for more information.

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