Crowdfunding for real estate 'taking off' in Australia

by AB13 Aug 2015
While platforms like Kickstarter have become an accepted way for people to fund a wide range of projects, whether or not crowdfunding can be a successful way to invest in real estate is yet to be seen.

Accounting firm BDO and real estate crowdfunding platform CrowdfundUP could soon answer that question though, as they collaborate on a report into the state of real estate crowd funding in Australia.

The report is set to be finalised and released in the near future and CrowdfundUp founder and managing director Jack Quigley is looking forward to seeing its findings.

“I think there will be some interesting things in the report, I think we’re just starting to see it (real estate crowd-funding) start to take off in Australia,” Quigley said.

If Quigley’s CrowdfundUP is anything to go by, the Western Australian might be right about the direction of real estate crowdfunding in this country after a number of positive signs for the platform.

Developed in the two and half years before it launched in March, CrowdfundUp has already closed out the funding arrangement for its first investing opportunity, a development of a block of eight units in Perth, and this week launched its second opportunity giving investors the chance to be involved in the purchase of commercial properties in Ingleburn and Wetherill Park.

While only opening up two investment opportunities in that time may not seem like “taking off” Quigley said the pace Crowdfundup has been moving at is deliberate.

“We’ve been going slowly because we we’re being super responsible,” Quigley said.

“We’re about responsible growth, we’ve put a lot of time and effort into this so we’re being very pedantic with how we do things, we’re in this for the long haul and we see huge potential in this.

“We could have put up any number of opportunities, we’ve probably got $150 million worth of projects in our pipeline, but we want to make sure that we’re diligent in making sure that we’re working with good developers and good projects.”

Quigley said the platform was only working with developers who have “runs on the board” and a proven track record over at least 5-10 years.

While their current investment opportunity is only open to people who meet the criteria of a wholesale investor, Quigley said CrowdfundUP hoped to become a platform for all investors to benefit from.

“The area where we see ourselves having the most benefit is somebody who has something like $250,000 to invest and doesn’t want to have to borrow or mortgage their home to get the rest of the money they might need for an investment property.

“They can come to us with that money and choose where they want to invest it and spread it around as many investments as they want and get a diverse portfolio.

“We don’t see ourselves as a threat to the traditional way of property investing, we see ourselves as a way to streamline the process and put people in touch with a range of different opportunities they may not get otherwise.”