Flip Tip Summary
Dan Miller joins us today on FlipNerd.com to discuss how Crowd Funding is not just creating new fundraising abilities for real estate investors, but liberating all investors and giving them options they never had before, many of which are in your own backyard. Check it out!
Flip Tip Transcript:
Mike: Hey, it’s Mike Hambright from FlipNerd.com and we have a quick VIP tip to share with you from Dan Miller who’s going to share a tip on how crowd funding is going to change the shape of our investing landscape.
Dan: We’re in the midst of the biggest regulatory shift around fundraising, capital raising since the initial rules were written in the 30s and 40s, so right now most of the rules around fund raising were written in 1933 and 1934. As you can imagine, there’s been a lot of big shifts in the market since then. The idea of the internet obviously wasn’t apparent then. So the jobs that passed in 2012 eased most restrictions around raising capital in terms of accessing individual investors, marketing publicly using the internet.
We’re in the midst of those changes being put in place by the SEC but there’s really a fundamental shift happening of allowing people to raise capital directly online from large networks and investors. It’s called crowd funding, but it really is much bigger than that. It’s restructuring the centralized financial model where all capital went hand-to-hand to New York and then back out to places in the country to digital networks that can connect online for almost no cost, distribute investments, manage the whole process efficiently.
We always say we came into crowd funding, funding our own deals by being early, by learning about process, by signing up for crowd funding websites, obviously like Fundrise, by investing in a few deals, by raising capital for your own projects. I think there’s just enormous advantage to the early adopters of online fundraising, of crowd funding, who are aware of the regulatory shifts
Similar to people that were early with Twitter and blogs, now have a dominant network followings, I think you’ll see similar process for real estate for crowd funding. People that are early on building a brand online, raising capital, returning money to investors, will over time have a dominant source of funding that will be a very hard for late entrance to compete with. So it’s really a fundamental shift in capital raising being put in place as we speak and I think people should be very aware of it.
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