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Crowdfunding Transparency, Investor Draw

posted Jul 22, 2014, 11:40 AM by Siamak Ebarhimi

SAN FRANCISCO—Nav Athwal is co-founder and CEO of RealtyShares, a leading crowdfunding for real estate platform. Prior to foundingRealtyShares, he was a real estate and land use attorney at San Francisco based Farella Braun & Martel LLP where he represented developers, fund managers, nonprofits, governmental organizations and REIT's on some of the largest mixed use residential, commercial and renewable energy projects across the country. recently caught up with Athwal to chat about trends in crowdfunding, the types of investors in the space and anticipated trends going forward.crowdfunding marketing Can you tell us about a specific commercial deal RealtyShares has crowdfunded?

Nav Athwal: We recently crowdfunded Strawberry Creek, an approximately 63,000-square-foot retail center in Sacramento. The center is not only shadow-anchored by Target, but also has national and regional tenants such as Starbucks, Jamba Juice, Panda Express, Subway and Rubio’s.  For us, this was especially exciting because RealtyShares’ Investors had an opportunity to invest alongside and on the same terms as institutional investors through Pacific Castle, a very reputable Southern California-based investment company. The opportunity offered immediate cash flow to investor’s as well as upside potential at time of sale. Altogether, we had 25 investors in 13 states participate. crowdfunding advertising What are some other commercial deals you’ve funded and are you noticing any trends?

Athwal: We’ve crowdfunded over 40 investment opportunities across 10 states and with a total value in excess of $100 million through RealtyShares. In addition to Strawberry Creek, we’ve funded mixed-use assets in Phoenix, multifamily assets in Texas, Chicago and New Jersey and government leased buildings in California.

We’ve experienced that it’s easier to fund cash flowing opportunities through the crowd than blind-pool funds and construction and ground up development projects. Thus, we are currently not funding those types of investments.indiegogo marketing What types of investors are you seeing using crowdfunding to invest in real estate?

Athwal: One of the benefits of crowdfunding is its transparency and level of control. Unlike REITs, our investors can select a specific asset in a specific market to match their own personal investment strategy or portfolio needs. In addition, our investors are excited about direct investments in real estate as a way to diversify their portfolio while reducing over-exposure to highly-volatile public equities.kickstarter marketing

Currently, all investors using the RealtyShares platform to invest in real estate have been Accredited US Investors, which means they meet strict standards related to their income and assets as set by the US government. Our investors range in age, occupation and location.  We have doctors, accountants, entrepreneurs, engineers, C-level executives, lawyers and others from almost every state in the US using RealtyShares. We also support investments through Self-Directed IRA’s thus allowing investors to use tax-deferred dollars. kickstarter project

What’s even more exciting is that the JOBS Act, which was enacted in April 2012, will allow non-accredited investor’s to participate in our crowdfunding platform for the first time.  That means that anyone, anywhere, could potentially take part in these real estate investment opportunities, democratizing access to these investments. We hope to see this act become operable by the end of the year.CrowdFunding advertizing

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By David Khorram