“Here’s an interesting idea: invest in the home you’ll want to buy in five years today.
That’s the crux of a new model being rolled out this week by real estate crowd funding startup Fundrise. The Washington D.C. based company is selling shares in funds dedicated to building and remodeling single family housing in urban locations. They’re calling the new vehicles “eFunds.”
Fundrise will launch the concept with two $50 million eFunds, one for Los Angeles and the other for Washington D.C. They received SEC approval last month and have been building up portfolios of projects those cities, 100 in all. By the end of this year, Fundrise hopes to have eFunds in major cities across the country.
Moreover, the goal is for a subset of the fund investors to become owners of the very places their money is helping build. Fundrise calls these “homebuyer investors” or HBIs, and argues these people will save by cutting out middle men like traditional real estate agents. A secondary goal of the model is to turn investors into to advocates for changing cumbersome urban building regulations.” Forbes
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