Real Estate With Crowdfunding?
The crowdfunding space has been growing rapidly during the last decade. What started out as a fad, turned into a billion dollar industry that has turned the world of finance upside down. For decades, real estate purchases have been beholden to large banks and lending institutions in order to secure financing and capital for projects. This bottleneck of funding options created barriers to entry that are impossible to overcome for most real estate buyers. Thankfully, today there are multiple options that didn’t exist prior to the crowdfunding revolution.
Long term players in the crowdfunding space like Go Fund Me and Kickstarter were the first to pioneer the concept. Essentially, small donors could finance large projects through he collaborative effort of crowdfunding. Like magic projects that would have never seen the light of day began emerging all over the world. Charitable projects are especially popular on crowdfunding platforms because the general publics see’s the benefit to the community, and not just an individual. In my opinion, the future of capitalism will be more than just projects that benefit one specific person.
Imagine a world where projects worked to the benefit of the general public, but were funded by large amounts of small donors. Of course, traditional capitalist like a restaurant, grocery store, and other services have there places. These times of services are the backbone of the economy, but unfortunately they monetarily only help the owners and staff. Crowdfunding is beginning to change the way we think and expanding our collective bargaining power. No longer will we be at the whim of a small minority of people who have access to large amounts of capital. Entrepreneurs utilizing small donations for a predetermined cause have the same access to capital that a rich developer or financier would have.
At this point you may be asking, how does crowdfunding for real estate purchases work? Here’s an example of how this revolutionary process would benefit the economy. Imagine a small undeveloped vacant lot in the middle of a town. this piece of property would be perfect for a neighborhood dog park, but the city does not have the funding or the inclination to buy the land and develop it. Residents in the neighborhood could start a equity crowdfunding campaign through SmashFund and begin raising funds for the purchase and development of the parcel. The campaign could specify the exact cost of the land, plans for the development, and approximate total cost.
For example, if the total development costs are $50,000 including land acquisition, then the crowdfunding campaign would explain that. When people donate to the project they would know exactly how much funds they would need and where these funds would be allocated. Potential backers can read over the entire campaign and decide whether donating to this cost is a worthwhile venture. Raising money from crowdfunding for real estate is no different than raising money for a cause or passion. In most cases, if the general public feels like the campaign is worthwhile, then the project will be funded. In next few months SmashFund will be launching a real estate crowdfunding service that could revolutionize this industry.
If you would like to learn more about SmashFund I also found a great and honest review here: http://smashfund-review.com They gave a real and honest review as compared to a bunch of other sites that bashed them only to promote their own product.