New SEC Regulations Open Online Syndications to More Real Estate Investors

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“If you can accept losing, you can’t win.”
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May 6, 2015 Adam Hooper

The U.S. Securities and Exchange Commission late last month approved new rules that should open the door for millions more people to invest in real estate.

The crowdfunding community has been waiting with anticipation for these rules, known as Regulation A+, because of the potential to raise capital from non-accredited investors (as well as accredited investors) more efficiently and more easily across state lines.

In just three years, the U.S. has witnessed a significant evolution in the functioning of private capital markets with the adoption of Title II of the JOBS Act and the creation of the 506(c) offering framework.

In commercial real estate, virtually all of the crowdfunding capital raised to date has been from accredited investors through platforms such as RealCrowd.

With this new SEC guidance that implements Title IV of the JOBS Act paving the way for companies (including real estate operators) to raise capital from non-accredited investors, millions more people will be able to participate in real estate syndications, including crowdfunded real estate investments.

Under the new Regulation A+:

  • Companies can raise up to $50MM per year from non-accredited investors (in other words, people who are not high-net-worth investors). That is huge.
  • Some offerings can be filed only with the SEC versus in every state, which is much less burdensome for issuers. The trade-offs are heightened reporting requirements, audited financials and a higher level of ongoing oversight. (View the new SEC regulations atcom/blog)

Ultimately, sponsors likely will take the path of least resistance to raising capital, be it by using the new regulations or others on the books.

Commercial real estate operators who have been on the fence about utilizing crowdfunding for online syndications now have reason to take another look at the benefits, which have multiplied with the SEC’s latest rulemaking.

Adam Hooper is the CEO of RealCrowd, the online commercial real estate investment platform with a track record of raising more capital for higher-value properties. Based in Palo Alto, Calif., RealCrowd enables real estate operators to raise capital for investment properties using a full-featured online platform that delivers time and cost savings versus traditional real estate syndication. RealCrowd exposes investors to opportunities for direct investment in quality real estate, and provides online tools for investors to manage their real estate investment portfolios.

SEE IT ALL:

http://nreionline.com/finance-investment/new-sec-regulations-open-online-syndications-more-real-estate-investors?NL=NREI-21&Issue=NREI-21_20150506_NREI-21_802&sfvc4enews=42&cl=article_2&utm_rid=CPG09000005957475&utm_campaign=2653&utm_medium=email

 

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I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years.  I am also a commercial land specialist in Phoenix and a Landspecialist in Arizona. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial /  Investment Properties in Arizona,  I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us. 

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Walter Unger CCIM

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