Property Investment Crowdfunding | 9 News Perth
Investors who can’t afford to fund development projects on their own are joining forces via a new crowdfunding platform.
In September 2015, Momentum Wealth Managing Director Damian Collins spoke to 9 News Perth’s Oliver Peterson on the topic.
Hear what he had to say in the video above and transcript below.
News Anchor: “There’s a new way to invest in property even if you don’t have much money to play with. Real estate crowdfunding is taking off in Australia, allowing mums and dads to team up and put their money into bricks and mortar, and already, the schemes are delivering big returns.”
Oliver Peterson (Reporter): “Eight units under construction in Doubleview, eight investors who have never met, like Tim Cell, put their money into the construction.”
Tim Cell (Investor): “It’s a really good fast way to earn some quick cash I reckon.”
Oliver Peterson: “Unable to afford the whole cost himself, he joined forces with other investors online through crowdfunding website CrowdfundUP. The lowest contribution was $5,000, the highest, $100,000.”
Tim Cell: “The big investors won’t really look at small time guys like me.”
Oliver Peterson: “Young Perth entrepreneur Jack Quigley has been working on the concept for two years.”
Jack Quigley, CrowdfundUP: “We’re giving people the opportunity to participate in property projects much in the same way as a bank.”
Oliver Peterson: “It took investors just two weeks to raise $500,000, and 12 months to construct these units, but all eight have been sold out, with the new owners moving in early next year, and the builder guarantees once all properties are sold, there’s an 11% return on investments.”
Tim Cell: “Eleven percent is just astronomical in today’s market.”
Oliver Peterson: “Right now that’s a better return than a banks term deposit or interest savings accounts. According to Canstar, the best term deposit rate right now is 2.96% with Ubank for six months, while the Doubleview development paid back the investors the 11% in just eight months. It all works online with no signup fee.”
Chad Scott, Megara: “It’s hard for people to get involved in the development space at a lower dollar value, and so I think that’s one of the main advantages.”
Oliver Peterson: “But like all new investment schemes, experts warn you need to do your research before parting ways with your cash.”
Damian Collins, MD, Momentum Wealth: “High returns means high risk, so I’d certainly be having a good look at the project behind it, what exactly they have the terms structured. Nothings for free.”
Oliver Peterson: “Real estate crowdfunding took off in the US after the global financial crisis because banks weren’t as quick to lend money. In the last two years, the industry has grown from 200 million dollars to over one billion. Even the Hard Rock Hotel in Palm Springs, California was crowdfunded. At the moment, CrowdfundUP is the only website of its kind in Australia, and it has opportunities all across the country.”
Jack Quigley: “What our platform does is really connect every investor with moldable projects, and they’re able to reinvest.”
Damian Collins: “Certainly for smaller investors, [it gives them] access to opportunities they might not otherwise get access to.”