Crowdsourcing an historic restoration?

Question

Investor newbie here, but not new to crowdsourcing or running my own business. I'm looking for creative ways to leverage my skills in social media, crowdfunding, and narrative storytelling to build up an audience for my flip before I ever start renovation.

I don't even have a property right now, but I have a short list and need to generate capital. I have a Shopify, so rather than go through something like Kickstarter, Indie GoGo, or BackerKit, I could make a custom collection of products for people interested in supporting my renovation funding campaign.

I'm an author-illustrator of cozy fantasy romance, and the flip will become a STR with special packages to support author groups looking for low-admin week-long writer retreats, or readers who want a taste of the Victorian era in which I write. The properties I'm studying are in Ohio near where I live, and I'm focusing on sale prices below $100k to avoid a large mortgage on top of my personal mortgage, which we will pay off in about five more years.

I searched the forums and didn't find anything about crowdsourcing. I feel like I can make this work since I design and produce stickers, key chain charms, bookmarks, ebooks, paperbacks, and hardcover books today for my pure author business. Restoration fans, upon buying my funding products, would receive this merch, the restoration diary with full-color images, and more. I'm even thinking of tiers that would unlock first-chance booking waves 1-3, and an extra tier where the backer proposes a name for the backyard patio experience. I've got it on my list to reach out to the local historical society for networking and research purposes. I really geek out about this stuff.

Here's my question: What's one (or more) thing I'm not thinking about, being an investor newbie, that should be a key consideration for my plans?

Sruly Goldschmied · Answer

Love this idea. A few things I'd look at before you buy, from the financing and closing side:

Historic district rules. If the house is inside a local historic district, exterior work like windows, siding, porches, sometimes even paint colors, can need approval before you touch it. That can add weeks to the project. Call the city before you make an offer, not after.

STR rules. A lot of Ohio towns have their own short term rental permits or limits. Make sure the town will actually let you run the retreats the way you're planning before you sell booking tiers.

Old houses hide things. Wiring, plumbing, lead paint, foundation. Get a real inspection and build extra room into both the budget and the timeline.

Backers and dates. Renovations almost always run late. If people prepaid for booking wave 1, decide now what you'll tell them if the house isn't ready on the date you promised.

Good luck, would love to see the restoration diary once it gets going

Belinda Kroll · Answer

Thank you, excellent points. First step is find the right town with the right STR actvity/rules and old house charm.... in the right budget... This is going to have a long lead time methinks.

Don Konipol · Answer

As I understand it, crowdsourcing is a way to raise money with the contributor having no expectation of getting either their money returned or a monetary return on their investment. BP is almost totally about for profit investing, so I doubt you’ll find any crowdsourcing insights here above what you can learn by an AI or even simple Google search.

Btw, once you enter the arena of for profit, any capital raise must either be a registered offering with the SEC or be able to utilize a specific exemption from registration.

Belinda Kroll · Answer

Re: SEC, ah, I see how I'm confusing the topic. In my plan, I'm the only investor. My book business will continue, but will have a special collection so if my readers and followers want to support this new project, they can, by doing what they already love to do: Buy my books and merch. This doesn't give them investor rights.

I'm thinking of this as creative cash fundraising rather than financing, where contributors receive merch for their support similar to a museum gift shop... but in my case, the gift shop exists online before the museum has opened.

I'm a multi-Kickstarter campaign success story and have yet to fail at delivering for my contributors. The amount per tier in this idea guarantees the contributor will receive their promised merch regardless of the house project failing or succeeding. So another way to think of it is, I'm creating a special collection of products curated for a customer base who would like an artifact to commemorate their contribution to an old home restoration. They're aware I'm pricing a little higher than normal because this is meant to support the restoration, not just receive the item.

Thank you for mentioning the SEC, as I'll need to make sure I'm not muddying the waters with this concept.

Crowdsourcing an historic restoration?

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