The passage of the JOBS Act in 2010 had a major impact on many different components of the economy. One of the most influential components of this Act was the allowance of crowdfunding within the commercial real estate industry.
With the introduction of crowdfunding for commercial real estate firms, it became possible for many people who had been previously excluded—namely, anyone who was not previously a “qualified investor”—to begin participating in the broader real estate investment market. Rather than needing to have more than a million dollars in available equity or an income greater than two hundred thousand dollars a year, anyone with a small amount of cash could suddenly invest.
As expected, the allowance of crowdfunding immediately changed the real estate industry. The number of possible investors available to any given commercial real estate enterprise grew from a list of probably about a dozen to millions overnight. Furthermore, with properties recovering from their post-crisis dip, 2010 seemed to be the perfect time to invest.
However, while the introduction of real estate crowdfunding was promising, there has never been anything such as guaranteed success. With more than two million commercial real estate enterprises in the United States alone, those who want to take advantage of the new right to crowdfund would need to find ways to outshine their competitors. By using technology, firms can scale their crowdfunding efforts and, ultimately, gain access to the capital they need.
Social media plays an important role in real estate crowdfunding, especially when aspiring real estate syndicates are trying to target new investors. There are many different platforms that a firm might consider using. “Fun” branding platforms, such as Instagram, Snapchat, and YouTube, are great for building your fund’s identity. Professional platforms, like LinkedIn, are great for developing a network of possible investors. Others, including Facebook and Twitter, also serve an important function.
The content you post across these many different platforms will often be very similar (or identical). Using a multi-platform posting tool can help you automate posts, schedule future posts, and broadly coordinate your long-term marketing plan. Building this network and infrastructure early will help make it easier to meet your crowdfunding goals.
The best real estate crowdfunding strategies will typically require a certain degree of specialization. In an era characterized by an increasingly decentralized and digitized economy, specialization is usually the precursor to outsourcing.
Gig or small-scale specialists are perfect for real estate companies with niche crowdfunding needs. Hiring a social media specialist, a content specialist, a crowdfunding specialist, a developer, or any other type of specialist can now be done with just a few clicks (and, usually, for a reasonable price). Using technology to improve your current outsourcing practices will make it much easier for your firm to effectively address niche needs.
Onboarding is an important component of the fundraising process. Onboarding, ultimately, is what turns a potential investor’s aspirations to invest into an actual investment. If the investor onboarding process appears to be too lengthy or complicated, an investor will very likely take their capital and look elsewhere for opportunities.
In many cases, the onboarding process can now be entirely (or at least mostly) automated. This includes automatic form generation, automated guidance and instructions, and an automatically generated secure capital transfer. In theory, the entire process of attracting investment and getting that person to become an investor should only take a few minutes. Thanks to technology, this process has considerably accelerated.
As a real estate syndicate—particularly in the crowdfunding era—you will generally want to build a broad, accessible, and reliable “crowd” of interested investors. With each prospective crowdfunding project you propose, only a fraction of these prospective investors will hear about it, and an even smaller fraction will take any sort of action.
Empowering your crowd to “qualify” themselves will help make it easier to maintain their interest and find the right investment opportunities. If somebody “opts-in” and qualifies themselves as a “small-cap investor interested in multi-family property ownership”, you can be much more confident in your decision to send them directly related information. Through the right-click funnels and qualification platforms, you can help interested investors find the investment property that is right for them.
Search Engine Optimization
New technologies have also helped significantly improve the process of search engine optimization (SEO)—something that is absolutely essential for your fund to get noticed and placed on the front page of Google. With the right combination of keywords, useful content, and special web features, your firm can position itself to be among the first that comes up when people search for “best real estate crowdfunding opportunities.”
With the right SEO tools in hand, you can find the optimal keywords to use, find ways to improve your current website (or platform) and be able to create the sort of content that actually generates value. Simply throwing up a website and hoping it will continue performing will not be enough, especially with many tech-savvier alternatives available to choose from. A sustained SEO campaign, on the other hand, will help get your firm noticed.
In the fast-paced real estate crowdfunding space, delays in communication can be very problematic. Anything your fund can do to help eliminate these delays will help streamline the process and deliver better fundraising outcomes.
Artificial intelligence (AI) and other technologies can be used to automate almost every type of digital communication. Emails, responses to comments, solicitations, and other communications can be automatically generated, using a natural-sounding tone. Automation can also be used for generating essential crowdfunding reports, forecasts, and updates. While your firm should still be transparent about which communications have been automated, implementing any automation efforts will save you quite a bit of time.
Utilize a Capital Raising and Investment Management Platform
Ultimately, the best way to improve outcomes is to utilize a comprehensive management platform, like SyndicationPro, that helps you control every element of your broader campaign all from one convenient location. SyndicationPro makes it easy for sponsors to complete a variety of essential tasks, such as creating customized landing pages that are tailored for each social media platform, expedite the onboarding process, and also efficiently transfer funds as needed.
Having a cohesive platform offers a variety of distinct advantages. Not only will using a platform helps your syndicate operate more efficiently, but it will also significantly improve relationships with prospective investors. Being able to quickly, securely, and accurately manage all interactions will lead to sustained investment partnerships, increased momentum, and better outcomes overall.
We are in the midst of a new era: for the first time, real estate firms can raise capital via crowdfunding, and technology is better than ever before. By investing in new technologies—specifically automated technologies—your firm can operate at a larger scale and reach a larger audience. Ultimately, these technologies will be essential for reaching your fundraising goals.