A US crowdfunding real estate investment platform Realtyshares recently raised $20 million bringing its total funds raised to over $130 million for over 1600 properties since its launch.
The site, which offers a mix of fix-and-flip loans, preferred equity and mezzanine products, joint venture equity and commercial loans alongside its capital partners boasts it therefore one of the largest real estate investment platforms in the US.
The San Francisco-based company makes its investment products available only to accredited and vetted real estate market operators.
The latest capital, raised less than a year since a $10 million financing round, was led by a new investor Union Square Ventures along with previous investors Menlo Ventures and General Catalyst Partners.
It will be used to market a new diversified equity fund targeting institutional investors as well as sales and marketing for its existing business lines.
According to Tech Crunch, RealtyShares Chief Executive Nav Athwal says the company’s current small-deal commercial real estate market of properties valued under $50 million is under-served by current investors.
Tech Crunch says Athwal is hoping by unlocking the market and allowing big investors to back small developers through RealtyShares he will successfully start building up the earnings.
The 500 Startups-incubated company makes money by linking investors with real estate development projects, taking a 2.5 per cent to 3 per cent origination fee on the debt it raises for projects and on equity investments.
The company takes a cost reimbursement and makes a one-to-two per cent management fee.
“RealtyShares will likely become a ‘one-stop shop’ for capital for real estate transactions – whether debt, equity, or mezzanine financing,” Athwal says.
“Our preferred equity products have already begun to exploit a real void in the marketplace left by the dislocations of the Great Recession, and we expect that such products will soon lead to an expansion of our commercial lending business as well.”