Real Estate Syndication/Private Placements Platforms

[Xavier Randall]

Is Syndication still a preferred/popular platform for investors? Has crowdfunding platforms become a more preferred vehicle or are most investors hesitant because of it's technology and still prefer dealing with someone directly? Are syndications more attractive to a particular type of investor (i.e.: Do the more serious investors with deeper pockets prefer established private equity firms?)

[Bryan Hancock]

There is a lot of bad information in this thread.  Be careful what you read on the internet.  

MOST of the portals are operating under no action letters from 506(b) and NOT 506(c).  That means that they could still, in theory, take in non-accredited investors.  Non-accredited investors can also be taken in under state securities regimes like what Groundfloor is doing.  This introduces a lot of complexity for the portal and states like Texas don't really know what they're doing yet with registered crowdfunding portals.  There are 6 state applications in Texas for a license as a TCP and 0 have been approved to date.  I have communicated directly with the SSB and attorneys who interact with the SSB regularly on these matters.  Introducing a portal that offers securities under both 506 and the state rules introduces a lot of complexity and problems.  That is why you don't see many portals using it.  Most portals are taking the long view too and will probably choose to operate under Title IV instead of devoting precious and scarce resources to adhering to individual state laws.  

Regarding the OP....The profile of most of the crowdfunding investors tends more toward more technology savvy folks.  The intersection of these folks and people that are old enough to be accredited is a small one.  Thus the industry has a long way to go to mature.  The vast majority of offerings like this are still done under the old rules using old methods.  However, just like online banking I think you'll start to see technology take over a sizable portion of the organization of capital.  Raising money online with the ability to generally solicit drastically increases one's scope and ability to find investors.  

Regarding net worth....This excludes one's primary residence.  All other assets and liabilities are fair game.  If the portal is using 506(c) a reasonableness check is needed from a professional like an attorney or a CPA.  However, as I stated above MOST of the portals are NOT operating under 506(c) and thus this accreditation check is not needed.  The industry has yet to mature to a point where accreditation reasonableness checks are done regularly and the technology is lagging behind what portal operators need to make things function properly.  There are firms like Accredify and Verify Investor that get it, but they haven't had enough time to develop proper APIs to embed functionality in sites yet to make the process seamless for investors.  Our team is working with these folks right now to implement these features to make the experience better for investors when they visit the site and invest.  Right now there are awkward hops to third party sites that confuse half of the people.  

I could go on and on and on.  Again, be careful what you read on the internet.  Crowdfunding is brand new and at least 90% of what I read online is either partially or wholly inaccurate.  

Any other thoughts @Herwig Konings ?