Guide to Real Estate Crowdfunding for Property Developments
We know that real estate crowdfunding for property development is still a relatively new concept in Australia.So we thought we would put together an easy to digest and reliable reference for everything you need to know about a real estate crowdfunding platform.Whether you're just getting to know the space or are part of an expert team, we hope you can learn something new.We will outline a new property development finance options.
Guide to Property Development via real estate Crowdfunding
There are many people that are interested in the idea of property development. Real estate crowdfunding offers certain rewards to borrowers who need funding to complete a development or acquisition project. For instance, it’s possible to access a new investor pool and gain access to capital with fewer hurdles, all within a shorter time frame. Real estate developers need several things to be successful: land, capital, and knowledge.
Capital is often one of the most difficult to obtain for newer, or smaller developers. property crowdfunding platforms like CrowdfundUP can be a benefit to property developers looking for further sources of capital from qualified Investors.
There’s also an advantage regarding cost. Online platforms have lower overhead costs compared to a bank, which can translate to fewer fees and lower interest rates for borrowers.
Finally, real estate crowdfunding platforms can be more flexible regarding the types of properties they’re able to list to investors and the kinds of financing they offer.
Related article:Why you should use Real Estate Crowdfunding platforms in Australia
Property Market Statistics
Rapidly CrowdfundUP has identified that the Alternative Finance Lending Market has the potential to grow significantly in the short to mid term, as innovative financial technologies break into the market.
APRA states that the total addressable Real Estate Market in Australia is $300 billion and the RBA estimates that the Alternative Lending Industry accounts for 5 – 10 % of the total addressable Real Estate Market.
The value, therefore, of the alternative lending market for Real Estate is estimated to be around $20 billion. This represents an emerging opportunity that CrowdfundUP is geared to take full advantage of.
How to get started in Property Development
The CrowdfundUP platform works by inviting Lenders (Investors) to lend money to Borrowers (Property Groups) for property acquisitions or development purposes. The loan agreement obliges each Borrower to repay the loan principal together with interest and costs over an agreed term, set out by the Property Group for each opportunity.
Investors registered to the CrowdfundUP platform are invited to participate in the loan by investing their preferred amounts in it and once invested, derive income on the capital they invest through the payment of distributions, funded from interest payments made by the Borrower.
How to fund property development via Crowdfunding
Raising capital for a real estate project is much easier when investors choose an established, experienced platform like CrowdfundUP to facilitate the crowdfunding process.
- Submitted to online application
- Get Approval
- Discuss the property and loan details
- Create a funding project
- Investors browse and review
- Raise Capital via CrowdfundUP
- Get funded
How real estate crowdfunding benefits property development groups
CrowdfundUP handles all of the Investor communication, documentation, transfer of funds and distributions for Investors and Property Groups.
Bespoke technology handles all reporting and funds transfers, while the humans behind the technology are always available to answers questions about Investments and the processes.
- EXPOSURE: Gain significant exposure by being part of a combined ‘developer platform’ which drives significant traffic flow of qualified investors to your company profile.
- COMMUNITY: Investors from the local community are provided with an opportunity to quickly support projects in their own neighbourhood, which in turn assists the approval and support of developments.
- ADVOCACY: Expansion of the investor list immediately increases the number of strong advocates for the end product of any development.
- ACCESS: Obtain access to national qualified investor networks of CrowdfundUP and our strategic partner BDO International.
- COST EFFECTIVE: We provides a cost and time effective, user-friendly means of attracting, engaging and capitalising on an investor audience.
- MARKETING: Developer branding and project exposure will bene t considerably through CrowdfundUP’s own site traffic and extensive multimedia marketing campaign.
- COMMUNICATION: The platform provides an easy, cost effective way to communicate and engage with investors and prospective investors.
- PROCESS: CrowdfundUP has developed unique technology, including digital signature software, integrated AML and data analysis and automated o er-and- acceptance processes.
- SMSF’s: CrowdfundUP will position your business to allow for ease of investment from the burgeoning Self Managed Super Fund investor community.
- SUCCESS FEE: Only pay for projects where fundraising objective is achieved. No funding means NO COST.
Diversified Source of Funding
CrowdfundUP is introducing tech-based solutions and removing some of the most challenging barriers.
We offer across Australia that runs the gamut of property types – multi-family residential, retail shopping centres, office buildings, self-storage facilities, and just about every other type of commercial real estate.
It is also a viable platform for developers who would like a low cost, diversified source of funding, faster turnaround times, and increased marketing and branding exposure.
Related article
- Value of Construction Loans via Real Estate Crowdfunding Platforms
- Bridge loans through Commercial Real Estate Crowdfunding
- Why Property Developers are attracted to Crowdfunding
The information in this article is general in nature. Any advice it contains is general advice only and has been prepared without taking into account the objectives, financial situation or needs of any particular person.
The article content is not intended to be a substitute for professional advice and readers are urged to seek their own appropriate advice before making decisions.
Any reference to a particular investment is not a recommendation to buy, sell or hold the investment.
Oct 09. 2018 CrowdfundUP
