Commercial Real Estate Basics: Finance Practices & Modern Real Estate Investing
In 2012, with the economy still recovering from the housing collapse of 2007 and credit severely constrained by consequent regulations, Congress signed the Jumpstart Our Business Startups Act (JOBS) into law, allowing companies to broadly market equity shares to individuals for the first time since the Securities Act of 1933, allowing businesses an alternate channel for raising capital, and affording investors access to alternative investment opportunities. The legislation was first seized upon by companies looking to raise operating capital for their startups, soon giving rise to platforms like SeedInvest and CirceUp. It didn’t take long for tech and real estate to converge — real estate proved to be a natural fit for the new regulatory environment, allowing real estate companies to offer access to their projects to a broader audience of individual investors, in much smaller increments.
At a basic level, “real estate crowdfunding” refers to a secure, online platform by which individual investors can participate in real estate projects that would have been out of reach prior to the JOBS Act.
This intro series aims to introduce you to this new paradigm for real estate investing, and provide some basic grounding in commercial real estate concepts, so you can best evaluate the opportunities on EQUITYMULTIPLE and other platforms and decide for yourself whether they might be a good fit for your portfolio. We hope you find it useful.