A few weeks ago, we wrote about crowdfunding and how it could affect the commercial real estate industry in coming years. As a quick recap, crowdfunding is the collective effort of individuals who network and pool their money, usually via the internet, to support efforts initiated by other people or organizations. A great example would be a band that starts a crowdfunding project in order to raise money for studio time and release an album; in return, the people who contributed money would be sent a free t-short and CD once the album dropped. Until a few weeks ago, crowdfunding was just an interesting concept to Atlanta investors, in part because SEC regulators are dragging their feet in passing the laws and regulations necessary to make crowdfunding work.
Things have changed, though. CrowdVested’s Grady Thrasher has introduced this concept to the Atlanta market and is actively scouting development deals in Atlanta that his firm can use as a “debut” for their crowdsourcing model. It seems as those Thrasher has found a loophole in the system – Invest Georgia exemption. The Invest Georgia exemption allows people to raise money from people who are consider “non-accredited” investors (anyone who has a net worth of less than $1 million or cannot afford to regularly invest $10,000). With Thrasher’s model, people could be become investors in new development for as little as $500 down.
Thrasher has realistic expectation of this business model. He knows that it will not change the way real estate financing is done, but he hopes that it will help to create a new source of capital for different kinds of commercial real estate projects.Share