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.
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. Real estate 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
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.
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.
Raising capital for a real estate project is much easier when investors choose an established, experienced platform like CrowdfundUP to facilitate the crowdfunding process.
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.
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.