Crowdfunding in real estate became a hot investment trend in 2015 and will continue to sizzle into 2016, a New York-based financial adviser predicts.
“People want to take control of their investing domain, and in this day and age the alternatives in the fixed income market are non-traded REITs (real estate investment trusts) and private placement memos as an alternative to bonds. The fee structures on those just don’t work,” David Tobin, principal at Mission Capital, tells The Street.
There are still legal and liquidity concerns because the practice is so new, as well as questions about the legal structure of crowdfunded deals and whether they should be subject to oversight by the federal Securities and Exchange Commission, The Street reports.
Other trends Tobin says will continue to grow in 2016 are the construction of apartment and housing complexes near colleges and universities, and the so-called graduate hotels in places with a large educational or medical population.
“They are good alternatives to very overbought, overbid gateway cities like New York, Los Angeles and San Francisco,” Tobin says. “Places like Nashville, Raleigh-Durham and Berkeley, Calif., have great real estate metrics.”
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