Fundrise launches tool for crowdfunding housing

Dive Brief:

Investor Fundrise is launching a new tool, which it calls an eFund, that allows the public to purchase shares in a limited liability company that develops condos and detached housing in their community, according to Fast Company. It will debut in Los Angeles.
Investors must purchase at least 100 shares, which currently cost $10 each. The money raised will go toward land and construction. It expects to build between 250 and 750 homes in the next five years. However, priced between $700,000 and $1 million, they won’t likely fill the inventory gap at the entry level.
Fundrise started in 2012 with the goal of using crowdfunding to garner a high volume of relatively small investments in commercial real estate projects located in high-density urban areas.

Dive Insight

Crowdfunding a housing development may seem odd now, but don’t be surprised to see more “out of the box” ways of generating new inventory in today’s tight market. Although Fundrise’s home investments are priced beyond the reach of many entry-level buyers, the technology in use plays to the interests of millennials.

This generation is more likely than any other to use the internet to find information about a potential home purchase. Of all living generations, millennials are the most likely to have found their home by searching online (56%) and are also the most likely to search for that information using a mobile device (86%), according to the National Association of Realtors.

Millennials’ embrace of technology to assist in house hunting is going beyond search engines, however. New tools are responding to their desire to understand how much a new home will actually cost and ensure they’re getting the best value. Zillow recently launched a website, RealEstate.com, that helps first-time buyers find homes based on their preferred down payment and total monthly costs. Those costs include property taxes, insurance and interest.

Social media is another way builders and realtors are using technology to reach home-seeking millennials. For example, a group of New York City real estate agents used the mobile image app Snapchat to show homes that were available to rent or buy. Their account, Snaplistings, gave followers a peek at available units and made it easier for them to get in touch with the agents to schedule a visit or ask questions.

Meanwhile, Realtor.com and Zillow have both added messaging capabilities to their listings apps, allowing users to save and share details about their potential purchase. Realtor.com also created an automated response application for Facebook Messenger that lets users select home criteria and sends them new, related listings at a pre-determined time each day.