RealtyShares raises $10M for real estate crowdfunding

Steven Loeb · April 7, 2015 · Short URL:

RealtyShares lets accredited investors to invest with professional developers in private real estate

If there is one thing you can say about the Internet, it is that it has opened up the world, and lifted barriers, in ways we probably could not have imagined. That has meant allowing people to communicate from across the world, but also to gain entry into worlds they might not otherwise have had the knowledge, or connections, to enter before.

I'm talking specifically about crowdfunding, a model that had democratized all kinds of investing, from venture capital to real estate.

RealtyShares, a crowdfunding platform for real estate that allows accredited investors to invest with professional real estate developers, has raised a $10 million Series A round of funding, it was announcedon Tuesday. The round was led by Menlo Ventures with participation from previous investor General Catalyst Partners.

The company had previously raised a $1.9 million seed funding round from General Catalyst and 500Startups, bringing its total venture capital to just under $12 million.

RealtyShares is an online marketplace for real estate investing that gives accredited investors the ability to purchase shares in private real estate investments. The company screens each investment and offers a range of opportunities including both loans secured by single family homes and equity investments in residential and commercial assets.

To make an investment, all a user has to do is sign up with RealtyShares, which is free, browse real estate investment on the site and then invest directly through the site. All paperwork is signed electronically through DocuSign and funds are transferred electronically.

Like all other crowdfunding sites, each investment has a unique funding goal and funds are maintained in escrow until that goal is reached. If it is reached, that user then owns a share of that property. If the goal is not reached, 100% of their money is returned.

Each user gets access to a secure Investor Dashboard where they can monitor their investments and returns, receive regular updates and manage their investor documents.

RealtyShares launched in November of 2013, and in the 15 months since it launched the company says it has already helped thousands of investors from across the country invest in hundreds of residential and commercial properties worth more than $300 million. Those properties span 17 states, 60 cities and offer investors average returns ranging from 8 to 20%. 

It is currently receiving close to 1,000 applications a month from borrowers looking to raise capital through RealtyShares

For developers, RealtyShares, which is currently focused on single family, multifamily and retail properties, can fund anywhere from $50,000 to a few million dollars of debt and equity capital for specific properties across the U.S.

The company says it will use the new funds to build and grow its team, to expand its product and technology, and to forge new partnerships as it continues to scale its investment platform.

In addition to the funding news, it was also revealed that John Jarve, Managing Director of  Menlo Ventures, will be joining the board of directors at RealtyShares. Jarve also sits on the board of automated investing service Betterment. 

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RealtyShares is an online investment platform that uses crowdfunding to pool investors into private real estate investments. Accredited Investor members can browse a variety of investment opportunities, review details on the investment and invest as little as $1,000. Execution of investor documents and fund transfers are handled securely through our platform, allowing investors to complete the entire transaction process through our site.

RealtyShares targets both residential and commercial investment opportunities. Today we offer both fixed-income investments in the form of first-position loans secured by 1-4 unit residential properties usually yielding between 8-10% as well as equity investments in apartments, retail and office properties. Each investment property is professionally operated and managed by a dedicated Real Estate Company making the investment completely passive to investors.