Crowdfunding and real estate align on Sydney development

Online crowdfunding platform VentureCrowd has raised more than $900,000 for a Western Sydney residential project, with most of the money coming from self-managed super fund investors.

Investors put between $10,000 and $80,000 each into the 35-lot development in Riverstone East, acquiring a 49 per cent equity stake in the $10 million project.

The developer, ClearState, has invested the remaining equity, totalling $1.81 million with the rest of the funding coming from mezzanine and senior bank debt. Returns in of more than 100 per cent on the equity invested are anticipated upon completion of the development in mid-2017, which is forecasting $13.1 million in net revenue with 22 of the 35 lots already sold.

Some investors were keen to put in as much as $250,000 in the project, VentureCrowd chief executive Rob Nankivell told the AFR.

“We’re replicating the funding model used in the start-up world for real estate. Property is an easy to understand asset class for investors looking for alternatives to the choppy equities market,” Mr Nankivell said.

“We’ve already verbally agreed on a second development, one-and-a-half times bigger than this one, which will close at the end of the July.”

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Source: Crowdfunding and real estate align on Sydney development | afr.com