on Dec 20 2013
We are enabling individual investors to directly own a stake in institutional quality commercial real estate assets. To directly own a multi million dollar retail/office/residential building in a major metropolitan area before RealCrowd you had to both be ultra rich and know the people that were making the offering. We are doing traditional real estate syndication, but using the efficiency and scale of the internet. By keeping the minimum investment threshold low we are able to attract investors that have both never had access to this asset class and would like to diversify their real estate portfolios.
At the same time we are enabling our real estate partners to do their jobs more efficiently, as we are managing the investors. Real Estate operators we have talked to often spend 40% or more of their time communicating with investors, and we make that process much, much easier. It's analogous to the startup world. Real Estate operators see fundraising as a distraction to doing their business, and would rather focus on creating value.
Our strong focus on education and transparency are unparalleled in a traditionally opaque industry.
We've been in the industry for the last 10 years and have experienced both the painful inefficiency that is fundraising for real estate assets and the lack of access for your average investor. We saw that investing online and especially "crowd investing" was becoming mainstream for other asset classes, but commercial real estate investment was stuck in the 1970's.
Accredited investors in the US control $11T of net worth. Commercial real estate in the US is an $250B per year transaction market. The ultra high net worth and institutional investors such as endowments and pension funds have significant allocations in commercial real estate The Yale Endowment, for instance, keeps at least 20% in commercial real estate and its Chief Investment Officer recommends every investor do the same.
We are positioned to collect both transactional and annual management fees for both assets that we raise money for and assets under management by real estate operators today that want access to our investor management tools.
We have a few startup competitors with varying levels of overlap. These include Realty Mogul, Fundrise, iFunding.
The RealCrowd founders have existing relationships with institutional quality real estate organizations across the US. We are providing an unmatched level of deal flow with exclusive transactions in major metropolitan areas that are usually unavailable to the individual investor.
It is a relationship oriented business that has a very high barrier to entry. Not only do you have to be respected in the network, there are sometimes hundreds of moving parts that have to line up for each transaction. We understand these pitfalls and are uniquely positioned to overcome them.
Our biggest risk is not being able to fund deals, sending our real estate partners looking for other capital partners.
We are a two sided marketplace, so we acquire our two sets of customers in different ways.
We acquire investors through PR, inbound marketing with blog posts, internet advertising, print advertising (testing soon), and word of mouth.
We acquire our real estate operator partnerships through industry events and networking and by introductions from our already large network of contacts from a combined 20 years of industry experience. We have also been successful with cold calling these partners. These relationships are very high touch, often requiring multiple in-person meetings, much like enterprise sales. Leveraging our existing network is a huge advantage here.
2500+ that have marked themselves as being accredited. We have grown this base at an average of 32% week over week.
So far we have seen an average of $26,000 across 45 investors for our first fundraise that is in progress.
Our first two are in process right now.
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