Crowdfunding Real Estate- Advice Needed

4 Replies

Hi I'm developing a Hotel/Hostel called the Surf House Barbados.  We are looking to use crowdfunding as a way to acquire the land.

Has anyone ever tried this? 

We've decided to do this because it's been hard to get financing because the property is outside the US. Our concept is very needed in the Caribbean, but our first goal is acquisition of the land.

Please take a look at what we are developing, any advise is welcome :O)

www.thesurfhousebarbados.com

thanks

Keva

@Keva Niver

That's a triply hard sell. Developers usually acquire the land with their own cash, own it free and clear as their skin in the game. Then they'll raise capital thru syndication, and leverage with a bank loan at no more than 50% LTV.

Using a crowdfunding site is using general solicitation and advertising in most circumstances, so the offering must either be a registered securities offering, or comply with Reg D 506(c), the safe harbor private offering exemption of the SEC code.

While successfully concluding a deal in which the principals have none or little of their own mo eye invested makes great reading, the realism is that it’s extremely difficult to do.

@Keva Niver  

Have you considered leasing the space to build your hotel?! I mean who said you have to buy it. 

Also, I'd encourage you to speak with a number of different lending firms as there're options beyond just the typical financing. Experience and  the track record are of course essential to get some creative ideas, but if that's present you may be surprised as to what's available out there.

Hi thanks! I come from years of construction/renovation and design but this will be my first development project. Because we are a new company we’ve been having funding issues and property is outside US.