CrowdfundUP will allow investors to put a minimum of $100 to work on the platform. Those investors are provided with background information on developers and their track history, project investment briefs, and key personnel behind each development. The platform is open to both retail and accredited investors.
Development partners for the platform are carefully selected and have to have a at least ten years experience in the project category, an extensive track record of successful projects and well qualified personnel.
Jack Quigley,CrowdfundUP’s Founder and MD, commented:
“Our mission at CrowdfundUP is to provide streamlined real estate investing for all Australians. We are here to make the investment process as transparent and accessible as possible for investors of all levels by reducing the time and capital needed to undertake the process.”
CrowdfundUP’s first partner is Megara, a Perth based property developer. It is seeking $500,000 in capital for the construction of an eight unit residential complex in Doubleview. Its Director Chad Scott explained:
“Partnering with CrowdfundUP provides Megara with a strategic opportunity to target a new realm of investors. As an established, yet dynamic Australian developer, it made sense to leverage technology and we anticipate some great results.”
CrowdfundUP is working with BDO as a strategic partner and they facilitated the introduction to Megara. CrowdfundUP’s Investment Manager Derek Barlow added:
“We are thrilled to launch with Megara’s support. As an experienced developer with a strong track history of successful projects, Megara is a prime example of the type of developer we are committed to partnering with.”
Some reservations about the crowdfunding model have been aired by Western Australia Property Council chief executive Joe Lenzo. He said he commended the innovation of the new site, but believes developers might have some apprehensions about dealing with a large number of backers each presenting small amounts of capital.
He explained:
“Typically they tend to prefer bigger capital backers, but having said that developers are becoming more open to the new technologies and are often looking for a new way to innovate.”
He also warned that investors should take responsibility for doing extensive research before investing in any project.
“Even if it’s just $100 that doesn’t mean you shouldn’t research the ins and outs of project, look at the legalities, ask plenty of questions and seek independent advice.”
Interest rates in Australia are currently at record lows of 2.25%, and this has led to a significant increase in house prices. And some are now saying that the market is currently stuck in a bubble. These high prices have prevented many people from accessing real estate investment, but crowdfunding platforms like CrowdfundUP can help them do that.
Jack Quigley weighed in:
“It opens the door for ordinary, everyday people to start becoming involved in property investment, without spending half a million dollars on a residential home. They’ll be exposed to opportunities they wouldn’t otherwise have opportunity to hear about and will give developers the opportunity to work with a large pool of backers.”
A couple of weeks ago Massolution published a comprehensive report on the real estate crowdfunding space. The report stated that real estate crowdfunding grew by 156% in 2014, just breaking through the $1 billion mark. And it estimated that real estate crowdfunding is expected to grow by 150% to $2.57 billion in 2015. This is a trend that CrowdfundUP is well placed to take advantage of.
