Reuters on Crowdfunding.

“The idea of harnessing small-scale investors for real estate development is gaining momentum nationally, boosted by digital platforms and federal rule changes” writes Carey L. Biron, for Thomson Reuters Foundation.

Carey uses two examples of successfully funded Small Change projects to illustrate his article “Can crowdfunded property turn rundown neighborhoods around?”

Lyneir Richardson, CEO of social enterprise Chicago TREND, crowdfunded 50% of the equity needed for the purchase of the Walbrook Junction shopping center in a Black neighborhood of Baltimore. Those investors will receive 49% of all profits as the shopping center is revitalized and gains value. And Joanna Bartholomew raised capital for Aruka Midway, a 23-row house project in Baltimore, converting the long-vacant buildings into comfortable, refurbished homes. Bartholomew’s first try at crowdfunding brought her almost 80 new investors.

Equity crowdfunding platform Small Change has so far helped raise almost $11 million to build housing for the homeless, transform empty buildings into corner shops, put retail in food deserts and the rest. More than half of those developments were women- or minority-owned, and most would not have succeeded in seeking traditional financing.

Crowdfunding can not only provide previously unobtainable finance for unusual projects and marginalized minority and women developers but makes real estate available to a broader pool of investors.

Read the original article h ere.

Image courtesy of Thomson Reuters Foundation