Real estate has been one of the hottest areas of crowdfunding, although most of it is focused on wealthy “accredited” investors who put money into funds, known as REITs. (And let’s face it, accredited investors don’t lack investment options!) Just two platforms allow direct investing by unaccredited investors. One is Pittsburgh-based Small Change, which uses the Regulation Crowdfunding exemption. The other, Groundfloor, has used a variety of exemptions since its inception in 2009 to bring short term, high yield-real estate investment opportunities to the mainstream. (It has also recently tiptoed into institutional partnerships similar to other online lenders).
This week, Atlanta-based Groundfloor announced a greenlight from the S.E.C.to expand its offerings under Tier II of Regulation A (part of the JOBS Act) to investors in all 50 states—an estimated 150 million people. The company also said it is taking indications of interest for its own Reg A capital raise. We talked to Brian Dally, Groundfloor cofounder and CEO (pictured above, at right, with cofounder Nick Bhargava) about these development as well as the company’s commitment to retail investors—and how “they’re crushing it.”
Groundfloor was just qualified by the SEC under Tier II of Regulation A, opening up investments to individuals in all 50 states. Tell me about the path to get there.
Two years ago we were qualified by the SEC for Tier 1, which was a fine place to start. We were the first to use NAASA’s coordinated review process [a streamlined process for state review, which is required under Tier 1]. If you wind the clock back four years ago, we stated off smaller using the Invest Georgia [intrastate] exemption. So we’ve gone from being available in one state to nine states to now all 50. This is a pattern of patiently building the company over time. If we wanted to get big fast we would have gone for the quick money from accredited investors and institutions. We have so much demand, we felt that we’re ready to go national.
What kind of demand are you seeing? […]
The post For Real Estate Lender Groundfloor, It’s Slow and Steady and Open to All appeared first on Locavesting.
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