About a year ago, RealtyShares launched as a new way for investors to put small amounts of money into real estate projects, kind of like a “LendingClub for Real Estate.” Now the company is launching a way for them to focus on investing in specific markets around the U.S.
RealtyShares works to crowdfund available real estate investments, allowing investors to put in as little as $5,000 into single-family homes, multi-family homes, and even commercial real estate projects. The cost of those projects ranges from $100,000 to the tens of millions.
For developers looking for funding, RealtyShares provides an easy way to quickly raise money for their projects. It funds about 10 to 20 projects per month and it takes an average of just four days for each RealtyShares investment to be funded. That compares to weeks or months for more traditional funding sources.
In the past year, the company had amassed about $300 million in real estate property value through more than 200 different properties across 59 different cities and 17 states. According to founder and CEO Nav Athwal, average return on investment has ranged from between 8 percent and 29 percent, depending on the type of project funded.
Athwal says most investors that have joined the platform so far have been IT professionals who are looking for new investment opportunities. As a result, the company has rolled out a new product that will allow them to focus on the areas that they know best — that is, the cities they live in.
RealtyShares has identified five specific markets with burgeoning tech and real estate sectors where it sees opportunities for investment. Those markets are Seattle, Dallas, Austin, Miami and Chicago, where the company hopes to more efficiently connect borrowers and investors.
Those market-specific products will enable developers to find funding from local investors who have an interest in development in their cities. And investors get the benefit of profiting from better yields in markets that have not yet been overdeveloped.
RealyShares has raised $1.9 million in funding led by General Catalyst, with other investors that include E*Trade COO Greg Framke and president of Gold Bullion International Savneet Singh.