Real Estate to Benefit From Crowdfunding Boost

November 11, 2015

When businesses expand, real estate benefits. The U.S. Securities and Exchange Commission is publishing a final rule in January that will take a big step in making so-called crowdfunding a mainstream way for small businesses to raise money. That’s important for real estate, because one of the first things small businesses look at when they have capital to expand is their real estate needs. Should they lease or buy a bigger office, warehouse, manufacturing facility, or storefront?

How viable is crowdfunding as a capital source? Last year it was viable enough to generate $16 billion to small businesses. When you consider all venture capital funding in the U.S. last year was about $45 billion, according to some estimates, $16 billion stands up pretty well. Analysts predict crowdfunding is likely to get bigger once the SEC rule tales effect. And, in some respects, there’s no downside, because individuals who invest money though a crowdfunding platform are not necessarily the same investors who put money into more typical Wall Street and other investment opportunities. If that’s true, crowdfunding helps create a bigger pie, not a reapportioning of the pie.

The potential of crowdfunding is one of the top stories in the latest Voice for Real Estate news video. The segment talks about why NAR supports the January SEC rule and why real estate could be one of the beneficiaries as crowdfunding goes mainstream.

The new Upstream initiative is another top story. If you’re not familiar with Upstream, it’s an industry effort to build a single platform for uploading. managing, and controlling listing data. The initiative was conceived by a coalition of brokerages and other real estate companies; NAR was asked to get involved earlier this year to make it happen more quickly and effectively, to the betterment of the entire real estate industry. The effort is now formally getting started  with NAR, the Realtors Property Resource®, and UpstreamRE signing a final agreement.

Oher segments in the news video look at the drop in first-time buyers, as underwriting standards and inventories of entry-level homes remain tight, and what to expect this week in San Diego, which is hosting NAR’s 2015 Conference & Expo.

Watch the video: