Are you ready for the market shifts that will define real estate crowdfunding in 2022?

This week, in the final September issue of “The GowerCrowd Real Estate Crowdfunding Newsletter,” we’ll look at several new deals up close, including a new Idaho farm offering from AcreTrader and a sneak peek at an upcoming webinar for a Houston multifamily development with solid risk mitigation and cost reductions. 

We’ll also look at a worrying trend in the Sun Belt, a market that’s been fertile ground for investors, both in the crowdfunding space and beyond, but which may be souring as home purchase agreements fall through at the highest rate in the United States. After that, we’ll examine new SEC fraud charges against a Texas real estate developer and two others for running a fraudulent crowdfunding offering that bilked more than 100 investors out of more than $26 million.

Later, we’ll look at a note from RealtyMogul CIO <add name> regarding inflation and its impact on real estate investing. Still later, we’ll review a piece at Crowdfund Insider that looks at the steadily growing number of FINRA-regulated funding portals. As is custom, we’ll finish with a look at a new podcast- Who Will Come Out On Top As Crowdfunding Shifts In 2022?

New Crowdfunding Platform Deals

First up is a new Idaho farm offering from the farm-focused crowdfunding platform AcreTrader. The Goose Creek Farm is a 390-acre forage crop farm growing alfalfa, corn, sorghum silage, and triticale in the heart of Idaho’s Magic Valley, a major American agricultural zone that boasts more than a million acres of productive farmland. Acretrader is hosting a live 30-minute webinar about the project on Wednesday, 9/28 at 11 am central. To watch it live, or catch a recording, head over to the Goose Creek Farm landing page on AcreTrader, here.

Next is a new deal from CrowdStreet, the Haven at Treeline, a Houston multifamily project with a favorable cost basis due to off-market land acquisition and repeat subcontractors. The sponsor, Guefen Development, has positioned the project to be completed at a fairly favorable cost basis when compared to other Class A luxury multifamily properties in suburban Houston.

Guefen has more than $600 million in assets under management, including 2,230,000 square feet of space and total portfolio activity north of $1.2 billion. The project has a targeted IRR of 24.7% and a minimum investment of $25,000, check it on CrowdStreet, here.

General Crowdfunding Industry News

Home purchase agreements in the Sun Belt are falling through at a higher rate than anywhere else in the country. In August 2022, more than 64,000 home purchase agreements fell through- which is identical to the 15.2% of homes that went under contract in the month of August. Read more at Benzinga, here.

On September 26th, the SEC announced charges against a Texas real estate developer and two others for operating a fraudulent real estate investment offering that raised $26 million in funding from more than 100 individual investors. SEC officials alleged that developer Timothy Barton, alongside home builder Stephen T. Wall and another man, Haoqiang Fu, also known as Michael Fu, enticed investors into buying securities issued by LLCs under the defendants’ control. 

The scam mostly targeted Chinese nationals, offering them an interest in specific real estate parcels for residential development. Loans would be repaid, with interest, in no longer than 2 years. However, according to the SEC complaint, this was untrue, with the defendants raiding investor funds for the purpose of making Ponzi payments to other investors, buying real estate in the name of Barton companies, and funding Barton’s personal lifestyle- including the purchase of a private aircraft. 

Read the complaint for yourself on the SEC site, here.

Crowdfunding Platform Updates

According to a recent report compiled by the folks at Crowdfund Insider, the number of FINRA-regulated funding portals continues to grow. These “broker-light” platforms have the ability to issue securities under Reg CF, an exemption brought to use by the JOBS Act of 2012. Right now, there are 77 approved funding portals, you can find a list on Crowdfund Insider, here.

Multimedia Links (Videos, Podcasts, etc.)

Last, but certainly not least, we’ll bring you another RE crowdfunding podcast you can listen to in the car, at the gym, or wherever you best digest the material. The podcast, Cash Flow Connections, features our very own Dr. Adam Gower, who holds the distinction of being a friend to the show. 

In it, Dr. Gower and host Hunter Thompson discuss new trends in the crowdfunding space, including the cost of leads going up and the fact that it is much harder to convert leads because investors are feeling the pain from the recent correction in the broader markets, as well as defined pain in the real estate space itself. 

They also look at how investors can overcome these challenges, what asset classes are outperforming the herd, and where Adam is finding significant discounts on real estate. Listen for yourself on Listen Notes, here.

That’s it for now- but we’ll see you next week with lots more real estate crowdfunding news, deals, platform updates, and more. See you then! Ciao!