Crowdfunding Accelerates House Flipping

Flip or Flop?

House flippers are using real estate crowdfunding sites to buy, renovate and sell homes at an accelerated pace.

One investor has raised over $9 million in the past 2 1/2 years on 9 deals, with one $1 million raise taking only 12 hours on RealtyShares (for accredited investors only).

Borrowing rates compare to hard money lenders at ~14% but the buyers don’t have to share the upside when the homes sell. The flippers have leveraged their crowdfunding with private equity money, some at a 3:1 ration.

Anecdotally, defaults remain low, so far. And some web portal lenders are maintaining funds in bankruptcy remote entities to protect their customers.

About JeffKoeppel

I am a corporate/securities attorney in the Washington, DC area. Prior to joining the firm, I was a Senior Attorney Advisor in the Division of Corporation Finance at the U.S. Securities and Exchange Commission. I am a member of the Bars of the States of Maryland, New York and the District of Columbia. You can also follow this blog on LinkedIn at:
This entry was posted in accredited investor, Banks, Crowd Fund Act, Crowd Fund Act of 2012, Crowd Funding At the Margins, Crowd Funding Platforms, Investments, Jobs, Legislative Intent, SEC, Small Business, Wall Street and tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

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