Crowdfunding, an alternative source of financing construction and real estate projects. Guideline for Developers on how to use this tool in medium size projects.

Abstract

Real estate crowdfunding comprises the process of investing in a real estate projects using online platforms, specialized websites that can reach a large number of potential investors, changing in just few years the traditional approach of the real estate industry. This phenomenon has become a trend among small and medium project developers, which nowadays have this additional source of financing. However, many people still unfamiliar about this new business model. Therefore, it is relevant to create awareness among project developers, prepare a guideline on how to use this tool and take advantage of it. Hence, the use of this technology would become easier, understandable and more widespread within the construction industry. The understanding of the potential and practical application of crowdfunding as an alternative source of capital for construction and real estate projects would be possible through the study, comparison and analysis of the different projects listed in real estate crowdfunding platforms in Europe and North America. The steps in this study includes, first, the general understanding of this technology, secondly, the documentation of the current assessment process, and finally the formulation of a guideline, checklist and assessment matrix for medium size projects.