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Private Money for the 21st Century

Manfred Sternberg, JD

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The Real Estate Industry is experiencing the beginning of a revolution in the market for accessing and deploying capital. It will impact all participants of the sector. Much has been written on the subject and a number of Funding Portals are popping up all over the Web as they all compete to become the Amazon or eBay of crowdfunding.

There is no dominant player, yet…we are only in the top half of the first inning in this industry. Fortunes will be made as the industry develops, not only in the Funding Portals, but also with the projects that now can be crowdfunded. How can you take legitimate advantage of this new emerging method of fund raising for real estate investing projects?

Whether you are an entrepreneur in the process of raising a round of funding to invest in a property or project, or a lender seeking potential high return opportunities, crowdfunding platforms should be of great interest to fully discover and explore. Entrepreneurs are preparing for the coming market disruption. It is such a massive industry that the disruption will not happen overnight, but more like a tectonic shift that will happen over the next few years.

Crowdfunding fits perfectly with the Real Estate Investing Industry for a number of reasons.

  • First, Real Estate Investing (REI) is a tried and true, well known, investment class. REI  is easier to understand than say an investment in technology or intellectual property. This makes REI investments more concrete, transparent and understandable for all involved.
  • Second, the threshold for financial participation as an investor has never been lower. Now, with even as little as $1,000, anybody can buy a piece of land.
  • Third, with the Internet and the free flow of information, it is easier to get and share information online on investment opportunities on properties than ever before.
  • Fourth, the real estate market is in a slump and realistically, how much lower can the price of properties go? Demand for property will never go away in our lifetime. The old axiom “buy low, sell high” is applicable here and now.
  • Finally, investors can, to some degree, see, feel and touch the investment. A house or building on a property, that the investor can actually see, if successful, can produce income in which the investor has made an investment.

REI Entrepreneurs will note there is much needed new sources of capital to assist in the development of real estate opportunities. Exciting market conditions present themselves for talented and innovative entrepreneurs. These are  unprecedented business opportunities.

Bill Gates of Microsoft believes that the migration of our society toward “friction-free capitalism” is made possible by developments in communications, chief among them the Internet and its World Wide Web. In this context, “friction” is everything that keeps markets from functioning as the “perfect competition” concept theorized about in economics textbooks.

The Internet continues to remove numerous layers of friction in our economy and has removed the proverbial middleman in many industries. Have you seen many travel agencies or video rental stores springing up in your neighborhood lately? Using technology that enables interested parties to easily and seamlessly share information disrupted both of these retail offerings almost overnight.

Soon, you will be able to readily invest in a variety of properties, and raise and invest money in a way with less “friction” than has existed for almost a century. Crowdfunding is the next big thing in corporate finance and REI is the asset class that will benefit most from this new form of finance.

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Manfred Sternberg, JD

Attorney and author Manfred Sternberg has a long history as a successful business entrepreneur. After beginning his career at Shell Oil Co. in its land department, Manfred has practiced law in Houston, Texas for almost 30 years maintaining an active civil law practice focusing on commercial litigation and corporate counsel for energy and high technology companies.  Manfred has been Board Certified in Consumer and Commercial Law by the Texas Board of Legal Specialization since 1993.

Manfred is the author of 2014 book How to Crowdfund published by highly regarded Noteworthy News. Over the years, hundreds of business owners and entrepreneurs have sought Manfred’s advice and business insight.  He currently acts as the “go to” legal adviser for numerous established businesses in their day-to-day business operations.

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