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Real estate’s new frontier: Crowdfunding

It’s worked for films, political candidates and disaster relief, so why not real estate? Crowdfunding, the act of soliciting funds from the public, most recently via the Internet, is already a powerful tool, but, until today, was difficult to do in real estate. Developers were restricted from marketing projects to the public. Real estate finance was largely limited to high net worth investors and private equity firms. Today, that restriction disappears, thanks to the Jumpstart Our Business Startups Act, or JOBS, passed in April 2012. Now developers can advertise and market their projects to so-called, “accredited” investors, or those with a net worth of at least $1 million and an annual income of at least $200,000. Mortgage rates moved down dramatically after the Fed announced it would not taper. CNBC’s Diana Olick has the details. Fred Glick, US Loans Mortgage, and David Lykken, Mortgage Banking Solutions, weigh in. It’s exactly what Washington native Ben Miller has been waiting for. He and his brother Dan founded Fundrise, a company that facilitates crowdfunding for local real estate development. The brothers actually started two years ago, wrangling through a little-known exemption in regulations. They found Regulation A, which allowed them to market to […]

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