One of my favorite companies, EarlyShares.com, is the market-leader in real estate crowdfunding.
Yes, you read that right. A fortunate combination of new technology and new regulations has allowed commercial real estate investing to go online, and EarlyShares has the process nailed.
Heather Schwarz Lopes, CFP®, Co-Founder and Chief Strategy Officer for the company, came on the show recently to explain that in a yield-starved world, average leveraged cash flow for EarlyShares deals is 8% to 9%.
“We are asset agnostic. We facilitate capital for retail, hotels, multifamily. What is really important is looking at the clients raising capital on our site and making sure that they have the expertise in their area – making sure that the investment is structured properly for investors. They go through a significant due-diligence list,” she said.
“When you look at the core of what they’re offering and what we’re hosting on our platform, we are allowing accredited investors to participate in small pieces of commercial real estate deals.”
Now, I remember when commercial real estate syndication first appeared in the mid-1980s. I was convinced then that it was the future of real estate financing.
Guess I was right.
“If you look at EarlyShares, our platform is syndication on steroids,” Lopes said.
EarlyShares’ clients are professional real estate investors with experienced teams behind them, Lopes said. They want to leverage the power of the Internet to access equity and debt capital more easily.
In fact, Pillar Finance, an affiliate of New York-based Guggenheim Partners, has just offered the mezzanine piece of a huge multifamily deal for subscription on EarlyShares.
“Very simply put, I like to say we are in the digital pipeline business. We have a capital pipeline company,” she said.
In all honesty, I myself used to think that real estate crowdfunding was a gimmick. Boy, was I wrong. Lopes said the volume has reached the $1 billion mark and shows no signs of slowing down.
But not every online platform can make the process work, she said. There are a lot of moving parts to coordinate: financial services, education, marketing, legal, technology.
Lopes said EarlyShares has put together all of the pieces in a superior platform. They have a senior team in charge and an end-to-end transaction engine supplying debt and equity deals from $500,000 to $20 million.
All of it literally at your fingertips.
“Just like you can access your investment at Merrill Lynch, you can access your investments at EarlyShares,” Lopes said.
Click here to listen to the full interview with Heather Schwarz Lopes of EarlyShares.com. You can call her at 786-565-3344 or simply visit EarlyShares.com.
