The Los Angeles Times recently posted an interesting piece about a family-run property business that has turned to crowdfunding for their financing needs. The relatively new phenomenon of crowdfunding enables businesses to publicly solicit investment from individual investors online.
Berneman’s family business, Golden Bee Properties, borrowed $1 million to buy a West Los Angeles home that he plans to renovate and expand before putting it back on the market. The money didn’t come from a bank but from 44 small investors, some of whom put in as little as $5,000.
Today’s crowdfunding platforms enable flippers to tap into a much larger investor network. The platforms are open to accredited investors, who have to make more than $200,000 annually or have a net worth of at least $1 million.
For more information about Crowdfunding visit the Real Estate Investment & Funding Association (REIFA).