$8million commercial real estate raise in Colorado This is a good example of a real estate crowdfunding deal for apartment buildings in Colorado http://disclosurequest.com/form/0001668254-16-000003 Are Your Ready To Raise Capital? Call Laurie Thomas Vass 919 975 4856
As a beginning note of caution, the world of crowdfunding is in a great state of flux and uncertainty. There are no accepted terms of usage to describe this new industry, and very few commonly-held assumptions about what the term means. Participants and firms enter and exit the industry with alarming frequency, and some of the very best of the breed up and leave the industry, with no advance warning, as is the case with Fundrise, which left crowdfunding to focus on creating and issuing REITs.
Editor’s Note: The following was written by Laurie Thomas Vass, a registered investment advisor, and regional economist. Vass manages The Private Capital Market, a crowdfunding platform. Guest contributors’ opinions are their own and do not necessarily represent the views of Crowdsourcing.org
Seeing The Reg D Offering From Your Company’s Perspective as an Issuer of Private Securities
The reason that terms like “cap rate” and IRR are used in many investment documents related to real estate is that these terms have much more significance to real estate professionals than they do to investors.
Real estate professionals usually begin their analysis by trying to figure out:
- How to put as little of their own capital into the deal as possible,
- How to receive the same preferred return as investors on the firm’s own invested capital in the deal,
- How to structure the deal to receive a “promote” (carry) share of the remaining cash flow and profits,
- How to receive a commission related to property acquisition, plus fees related to loan financing and property management,
- How to receive some share of the tax benefits related to the real estate deal.
Editor’s Note: The following was written by Laurie Thomas Vass, a registered investment advisor, and regional economist. Vass manages The Private Capital Market, a crowdfunding platform. Guest contributors’ opinions are their own and do not necessarily represent the views of Crowdsourcing.org.
One way to view the topic of real estate crowdfunding is to begin the analysis by seeing the investment from the perspective of a potential investor. Imagining how the investor views real estate investments, compared to all other investment alternatives, is useful because it provides an insight into how investors may select either a real estate crowdfunding website or a direct corporate private offering to complete their investment decision.
Imagining the investment from the perspective of the investor is also an essential mental exercise for all commercial real estate brokers and CEOs who are contemplating a Reg D Rule 506(c) offering. The new SEC rules authorize the CEO to issue securities, on behalf of the company, and part of the successful raise requires that CEOs become the best securities salesperson the company has ever seen.