ALTERNATIVE ANGLE
Investors Benefit from Transparency Data and reputation in the real estate crowdfunding space by Jason Fritton
T
he real estate crowdfunding space is a
important, as the real estate online lending
thing for borrowers and real estate investors
and have different goals and philosophies.
efficient and transparent offerings.
looking for others who have used the site and
at Crowdfund Capital Advisors, noted how
companies may choose to make this effort
than tripled [Cambridge University “Break-
borrower feedback, links to trade journals,
Finance Benchmarking Report”] between 2014
articles that mention the platform.
to a 2016 study by the University of Cambridge
proves difficult, third-party reviews are one
scores the outlook for online investing and
a platform. The Real-Estate Crowdfunding
booming industry. This can be a good
as online marketplace lenders provide fast, Bloomberg, quoting Jason Best, a partner
marketplaces may offer vastly different deals, Potential investors or borrowers will be
whether they had a good experience. Some
last year the U.S. online lending volume more
easier by directly offering some investor/
ing New Ground: The Americas Alternative
customer testimonials, and authoritative
and 2015 to more than $36 billion, according
If finding other crowdfunding customers
and the University of Chicago. This under-
way investors can gauge the reputation of
borrowing in the crowdfunding space.
Review ranks real estate crowdfunding sites
to find the platform that offers the services
its own methodology and includes hands-on
crowdfunding platforms doing to stand out,
backed by a venture capital firm has already
meaningful results?
fully vetted by an independent investment
Reputation
backing may want to highlight as this provides
The opportunity is for online investors
based on in depth reviews of each site using
best tailored to meet their needs. What are
testing of each site. They note that a company
attract borrowers and investors, and provide
had its business model and strategies success-
Like many investment vehicles, real estate
crowdfunding investments need to effectively
professional — something that sites with
some strong documentation on reputation.
Prospective clients will also want to know
communicate why these online investments
if a site is delivering on its promises and
way to tell their story on their website in
and borrowers will be looking for those sites
are trustworthy. Platforms need to find a
which ones have staying power. Investors
an “About Us” tab that is easy to find. Here,
they believe will be around for the long haul.
explain how they got started, who’s behind
Executive team
approach to real estate crowdfunding. This is
the show. Investors and borrowers looking
companies have a good opportunity to
the effort, the mission, and their business
22 PRIVATE LENDER
It’s also important to know who is running