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August 20, 2014

Property Managers Can Offer Clients a Piece of Crowd-funding Action

Posted: 19 Aug 2014 09:35 AM PDT

Don’t let the lazy, crazy, hazy days of summer lull your property management business to sleep. Wake it up with timely communiqués that you send to your clients and potential clients.

For example, why not ignite their imaginations with information about equity-based crowd-funding that specializes in real estate investment opportunities. I recently interviewed the co-founder of a company that has discovered such a niche.

Heather Schwarz Lopes, the Chief Strategy Officer and Co-Founder of EarlyShares , along with company CEO Joanna Schwartz are focused on the  growing U.S. real estate sector as one of the most exciting applications of the new capital-raising opportunities of the JOBS Act.

Now that accredited investors can access real estate investment opportunities through online platforms, EarlyShares is offering its own selection of carefully vetted real estate deals to investors through their EarlyShares Real Estate vertical.

When I spoke to Lopes she told me that EarlyShares is a good fit for investors who want fractional ownership of commercial properties. She specifically mentioned multi-family apartment communities.

There’s a growing interest in residential income real estate that’s sweeping the nation. Part of the credit goes to the Federal Reserve’s zero interest rate policy, aka “ZIRP” which motivates investment money to seek opportunities with better rewards.

EarlyShares offer individuals the chance to invest in everything from single-family fixer-uppers to ground-up real-estate developments and even distressed mortgages, sometimes for as little as $100.

Many of the new equity-based crowd-funding platforms were launched in response to the Jumpstart Our Business Startups Act of 2012, which eased restrictions on fundraising by small companies. These platforms have raised more than $135 million in debt and equity for real-estate deals, according to Wall Street Journal.

A big step towards reducing risk involves the same kind of screening techniques that property managers use for residents. Companies like EarlyShares know how important it is to know who is sponsoring the investment properties and whose behind the deals offered on their site.

Real estate is “the hottest sector,” says Richard Swart, who heads the crowd-funding research program at the University of California at Berkeley, who I also recently interviewed. “It’s getting the most interest and the most activity” Swart opined.

Lopes told me about a big boon for real-estate campaigns on EarlyShares involving its recent exclusive marketing partnership with Property.com. It’s one of the websites run by Miami-based eRealEstate Holdings, which operates Condo.com, Houses.com and Location.com.

With more than 5 million listings combined, these sites function as a national real-estate marketplace for listing, searching, buying, selling and renting single-family homes, condos and commercial property.

With real estate, “there is collateral, cash flow, a return and a projected exit time for the investment,” Joanna Schwartz, EarlyShares CEO told the Wall Street Journal. All except the “projected exit time” are the same reasons our clients own well-managed residential rental income properties.

If your clients own enough units yet want to diversify with a pool of other investors, educate them about the offerings made available through companies like EarlyShares. It may trigger a conversation that reminds them of why they own rental housing and manage their properties through you.

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