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“Vacation with an Education” on National REIA’s 18th Annual Cruise
et’s face it, the majority of con-
ferences take place at some convention center in a far off place, which may or not allow you to relax and have a good time while attending. That’s where National REIA’s annual cruise is completely different. The theme for 2016 is “A Vacation with an Education” and it is all that and much more. The ship departs from Ft. Lauderdale in late February embarking on an 8-day journey with stops in the Bahamas, U.S. Virgin Islands, and St. Maarten. Along the way will be a variety of educational programs, updates, insights and events all geared toward the real estate investor. Recently there has been a lot of talk about innovative ways to finance your property purchases- from
By John Notorgiacomo, REIFA
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Crowdfunding to Syndications. The cruise will cover not only these newer topics but ones you may have never considered – such as Be Your Own Bank, presented by financial planner Doug DeShield, covering the ability to use your Life Insurance to fund deals. This strategy takes some patience but has amazing capabilities!
The session on The State of Real Estate Financing will cover changes in IRA policies, Crowdfunding laws, the day-to-day use of private money, and syndications. Conventional financing will also be covered as well as the effect of credit scores, credit availability and more. The ever-popular Industry Update is back again with long
distance input from Chris Kuehl, an industry economist whose humor rivals his insight (see article on pg. 1). The Town Hall discussion after his outline is often the most anticipated session of the cruise. Everyone listens with great interest to what other members are experiencing across the country in their day-to-day operations. This pairs with the annual legislative update from NREIA. It was discovered at the 2015 National REIA MidYear conference that there were many developing hot industry topics that needed more attention. As a result, there are new rental topics to discuss in the “Not Your Father’s Rentals” session. Also covered will continued on page 18
Crowdfunding Your Next Real Estate Deal
ver the past decade, crowd-
funding has been growing bigger and better. However, it’s only really become a hot topic to the public in the past four or five years; I would postulate that this is because of the advent of platforms like Kickstarter and Indiegogo. These two sites really opened up the crowdfunding universe to the little guy, businessman and stay at home mom alike, allowing dreams like the “Exploding Kittens” card game and the “Coolest Cooler” to become a reality.
However, there seems to be a misconception among the general public as to how the process works and, if you look at some of the less successful campaigns, you’ll see why. For many, Kickstarter is where you go to post an idea you have, fill out some information about it, and then have people give you money (for free) to make that dream come true; Simple. If only, if only…..Because in reality, that only falls under step one, “creating Real Estate Journal · Winter 2016
your story.” Because in addition to having your product and your story, you need a good video, solid pictures, compelling and dynamic perks, your own website with additional information and, last, but certainly not least, you need to be doing constant public outreach within your niche or community. That is the step that so many individuals seem to underestimate and undervalue. Doing some positive marketing will not only gauge interest in the product before you go to the effort of launching it but it will also seed & grow interest in that community. In short, crowdfunding a product or idea on Kickstarter can be a long and tedious process. However, crowdfunding real estate on a platform like Patch of Land (as an example) is entirely different. There is much less involved when using crowdfunding for a real estate project. For starters, when listing a project on a REI crowdfunding platform like Patch of Land, the process starts by signing up as a borrower (if you haven’t already) and then applying for a loan. Once approved, you can then post your listing - which includes providing the usual information you would normally give to any investor to perform due diligence. That
information includes particulars about the house, APR, ARV, loan term length, etc. It’s as simple as that. At this point, the process becomes a lot like the fabled Kickstarter dream mentioned before, only you simply wait to be funded. Now, that’s not to say you couldn’t do some marketing if you wanted to. For example, if you’re a REIA or REIFA member, some REIA’s will post properties that their members are currently working on to their Facebook page or their Twitter account. Utilizing some positive marketing certainly wouldn’t hurt your chances of getting funded. However, the reason why crowdfunding your real estate project is a less convoluted process is because of its intended audience. These are people who are looking for a project to invest in, not browsing around to look for a cool idea with some neat perks/rewards just for donating. Your target audience does not need you to convince them to help crowdfund your property - the property can do that all by itself, especially if it’s a good deal - and why would you take a bad deal, anyway? The bottom line; Real estate crowdfunders have more long-term vision and are in it for the returns, not some flashy perks or a product.
If you’re interested in checking out some good quality real estate crowdfunding platforms, I would recommend taking a look at Patch of Land, Realty Mogul, Prodigy Network or Fundrise. Some of the biggest and most successful real estate crowdfunding deals done in 2015 have been on these platforms – and we’re talking beautiful, amazing properties. These are platforms that can take you places. In short, you should definitely consider using crowdfunding for your next property listing. Sure, there are some fees involved in some platforms, but as a real estate investor, you should be more than used to having to read the fine print and doing your due diligence. Try it out and, if you do, let us know how the experience went for you. We’d love to hear your feedback. For more information about crowdfunding, please visit www.reifa.org. ■
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