Why did investors place $2.6B via real estate crowdfunding in 2015? Discover how investors are creating outstanding returns from real estate with more transparency, smaller amounts, more diversification, more control and flexibility and without landlord hassles. Keynote for 2016 Rai$e Conference by Crowdfund Suite Evangelist Bret Conkin. Real Estate Crowdfunding has become a dynamic new option for real estate developers and project sponsors for raising capital to finance projects. In turn, investors have tapped an exciting new option tof investing in previously inaccessible projects to achieve high returns in this booming asset class. This guide details what investors need to know. Also useful for developers. Learn more at www.crowdfundland.co

1. Presented on 7/7/16 by
RAI$E CONFERENCE ‘16
An Investor Guide
To Real Estate
Crowdfunding
Bret Conkin
Chief Evangelist

2. Ever used….....
Crowdfundland.co @bretconkin

3. The Good & Bad

4. Source: Vision
Critical

5. WHAT ARE WE
SHARING?
Source: Vision
Critical

6. Crowdfundland.co @bretconkin

7. Crowdfundland.co | @bretconkin
What is Crowdfunding?

8. Crowdfundland.co @bretconkin

9. HOW CROWDFUNDING MODELS DIFFER
Donations
Help those in
need expecting
nothing in return
Rewards
Pre-orders or
perks for backing
a project
Equity
Shares or
securities in
companies
Lending
Loans via
the Crowd
not banks
Crowdfundland.co @bretconkin

10. GLOBAL CROWDFUNDING
New Canadian
Crowdfunding
Laws (2015)
&
JOBS ACT (US)

11. WHAT IS DRIVING GROWTH
• Proof it works - in US other markets
• Demand for alternative investments due to poor market returns
• Wave of internet disruption of traditional industry inefficiencies
• Wave of mobile and social network adoption
• Wave of cultural disruption of people wanting to connect as they
buy, do and invest
• The rise of Big Data and Analytics
• Real Estate’s fit - the fastest growing altfi sector in the US

12. Intro to Real Estate Crowdfunding
Crowdfundland.co | @bretconkin

13. REAL ESTATE CROWDFUNDING
- New Crowdfunding
Exemptions (CAN/US)
- Liberalized Securities
Regulations
- Strong performing
asset class
Transforming investing from offline to online
Crowdfundland.co @bretconkin

14. RE CROWDFUNDING STATS
250+ Platforms
Crowdfunding
residential &
commercial projects
$100 - $100k
Investment size from
investors
Est. $2.6 Billion
Invested in 2015
$100k - $25 Million
Crowdfunded project
size
Crowdfundland.co @bretconkin

15. WHO ARE THE PLAYERS?
Real Estate Focus Est. Returns Min. Investment
Commercial 5 – 20% $1,500
Commercial 15 – 25% $10,000
Commercial 12 – 14% $1,000
Cash-flowing
Commercial &
Residential
8 – 17% $5,000
Commercial &
Residential
8 – 20% $5,000
Crowdfundland.co @bretconkin

16. POWER OF ONLINE CROWDFUNDING
• 80,000 members
• $3B in real estate investments
• 90,000 monthly visitors to website
• $130M raised for 1600 properties
• 80,000 members
• $200M invested | $40M paid out
Crowdfundland.co @bretconkin

17. RISE OF RE CROWDFUNDING
2015 Growth
In real estate
crowdfunding
market
156%
VC Raised by
Platforms
to further grow their
marketplace
business
$120M
Investment
by RenRen
into Fundrise in
2014
$31M
Crowdfundland.co @bretconkin

18. INVESTMENT SIZE | SPEED
Min. Investment of A$340,000
28 Asian investors ‘presold’ into investment
Min. Investment of US$100,000*
Successfully funded $150M+ Manhattan real estate
400% Oversubscribed in 4hrs
Fundrise eREIT invests in commercial real estate,
distributing cash to investors every quarter
* International investorsCrowdfundland.co @bretconkin

19. How does Real Estate
Crowdfunding Work?
Crowdfundland.co | @bretconkin

20. EQUITY VS. DEBT
EQUITY
Equity stakes
in property or SPV.
Rental income +/or
Asset appreciation.
DEBT PROS
5-10+% returns.
Lower Risk.
Shorter holding periods.
More liquidity.
Lower on capital stack.
EQUITY PROS
Higher returns!
15-25% (net)
DEBT
Investing in mortgage/
loan of property.
Interest payments +
Principal Repayment.
Crowdfundland.co @bretconkin

21. Source: Nelson Garcia, Medium.comCrowdfundland.co @bretconkin

22. CROWDFUNDING STRUCTURE
Online
Investors
% Stake
Project
Sponsors
Majority
ownership
Special Purpose Vehicle
Project Investment
Crowdfundland.co @bretconkin

23. BENEFITS FOR INVESTORS
Diversification
Lower investment
requirements allow
diversification
Accessibility
Participate in deals
that were inaccessible
before
Speed/Flexibility
Online tools,
algorithms & analytics
reduce friction
Higher Returns
New asset classes
provide higher returns
via crowdfunding
Transparency
Immediate availability
of information through
the platform
Lead Investors
Syndications/ Invest
along with industry
experts
Crowdfundland.co @bretconkin

24. Cut Out
the
Middle
Men
Marketing
Benefits
New base of
investors and
capital
BENEFITS FOR DEVELOPERS/BUILDERS
Lower costs vs.
traditional
funding
$
€¥
£
Big Data
Analytics
24/7
Accessibility
Crowdfundland.co @bretconkin

25. Real Estate Crowdfunding
Not Just a Concept
Crowdfundland.co | @bretconkin

26. ILLUSTRATION A – HARD ROCK HOTEL
PALM SPRINGS
• Kittridge Hotels &
Resorts/Realty Mogul
• July 2014
• $1.5M raised to
refinance/renovate
• 85 investors received VIP
benefits
• Customers became owners
• Created evangelists to
promote hotel
Crowdfundland.co @bretconkin

27. ILLUSTRATION B: VESTMUNITY - FIX ‘N FLIP
South Florida
• $50-200k loans for
renovations
• Address funding gap
• 18-20% Returns
Patch of Land
• $61M in Loans (2015)
PeerStreet
• $40M in Loans (2015)

28. ILLUSTRATION C – BC BACATA TOWER
• Mixed use project in
Bogota, Columbia
• $175M raised from 3500
investors
Crowdfundland.co @bretconkin

29. ILLUSTRATION D – AJAX LAND MORTGAGE
• Real Estate Development
• Bridge Financing -
Residential condo project (Phase I)
• Mortgage Debt Investment
• Partner: Downing Street
• Total Debt Raised: $15.5M
• Crowdfunding: $500k
• Closed: 4/22/16
Crowdfundland.co @bretconkin

30. ILLUSTRATION D - 3 WORLD TRADE CENTER
$2.49B
Total Project Cost
$2M
Funded with debt
crowdfunding
5%
Tax-free interest
secured bond
One of the most iconic towers in New York City, the 3 World Trade
Center, was partly funded by investments by the crowd.

31. ILLUSTRATION E: CROWDSTREET
MARKETPLACE
• Commercial real-estate
marketplace
• 48 successful offerings
• $29M avg. project value
• $8.9M avg. equity per offering
• 17.4% avg. target IRR
• 8.2% avg. cash yield/yr.
• $50k avg. investment

32. Real Estate Crowdfunding in Asia
Crowdfundland.co | @bretconkin

33. CHINESE INVESTMENT CLIMATE
$525
Million
$33 Billion
Diversify
Cheap
Canadian
Dollar
“Mainland Chinese buyer’s market”
Study says 70% of YVR West Side homes sold
to Mainland Chinese buyers (The Province)
Invested in Canadian Real Estate
Between 2008 to 2014, $33 billion invested
into residential and commercial
Diversifying Real Estate Investments
Not only investing into residential, but hotels,
resorts, wineries, farms, etc.
Canadian Investments on Discount
Drop in value of Canadian dollar attracts
Chinese investments

34. CHINESE CROWDFUNDING
Personal Savings
Accounts
HengXinLi launched to
give investors access to
international real estate
investments
$21
Trillion
Chinese Real Estate
Platforms In US
Chinese only platforms
for Chinese investors to
invest into US real
estate
iCross
Ydizhu
P2P Lending
Fraud in China
Lack of credibility in
Chinese platforms
$7.6
Billion
Crowdfundland.co @bretconkin

35. ILLUSTRATION F - STABLE PROPERTIES
$8M AUD
Total Equity
Component
5
Investors pooled
$300k into the equity
component
40%
Projected IRR
With hold time of
18-24 months
Stable Properties had secured the site, development approval and $58M AUD senior
financing from ANZ bank on the redevelopment of the old Wrigley's chewing gum factory
conversion into 99 loft apartments.

36. Real Estate Crowdfunding
Beyond Urban Real Estate
Crowdfundland.co | @bretconkin

37. CROWDFUNDING FARMLAND?
Farmland is a stable, scarce, income producing asset.
37

38. ILLUSTRATION G - CANADA ASIA
SYNERGY GROUP
Rural Alta Land
• Canada/Asia investors
• CASG owns 51% and
provides management
• $10k investment units
• 4900 shares + $5100
mortgage
ROI
• 3-4% income/year
• 7-9% appreciationTomahawk Cattle Ranch – 13,500 Deeded Acres

39. ONLINE VS OFFLINE
OFFLINE
ONLINE
Investor Exposure Transaction Cycle
180,000+
400 180+ DAYS
60 Days
Crowdfundland.co @bretconkin

40. ILLUSTRATION H: DWELLxCHANGE
• Marketplace for “shared equity”
• Sell equity interest in home to
investors
• Promise of living mortgage free!
• $5,000 min investment
• Secondary market in works
• Full occupancy rights
Example
• $500,000 home
• $250,000 in owner equity
• Sell balance of $250,000
• Buyer gets payback + 50% of equity
gain upon sale

41. How is this different from REITS &
MICs?
Crowdfundland.co | @bretconkin

42. HOW DIFFERENT FROM A REIT?
• Ability to select
specific:
• Geography
• Sector
• Properties
• Not subject to stock
market’s volatility
• Fees may be lower
Crowdfundland.co @bretconkin

43. MIC vs. RE CROWDFUNDING
Item MIC RECF Investments
Product Debt only. Debt and Equity.
Indirect vs. Direct Blind pool investment. Project direct.
Yield 6-7% 12-20% IRR
Geography Canada only No restriction
Management Fee 1.5%-2% 1% AUM Fee
Capital Raise Fee 6-8%
To EMDs (Private)
To IPO fees (Public)
4% of raise
To EMD
Pros Carefree investment.
Liquid.
Higher returns.
Value not vary w/ stock market.
Cons Lower returns.
Value fluctuates w/ stock market.
Involved investment.
Illiquid.
Source: R2Crowd
Crowdfundland.co @bretconkin

44. Summary
Crowdfundland.co | @bretconkin

45. THE PROMISE
Increased
Transparency
New Market
Accessibility
Increased Investment
flexibility
Easier Due
Diligence
8 - 25%
returns
Convenience
+ Lower Fees
Marketing
Benefits
For Investors
New
Financing
options
Requires
platform
approval
For Project Owners

46. LIMITATIONS
Consider
Investment
Fundamentals
Choose right
platform
Consider Liquidity
Don’t forget about
Risk
$
May require
other funding
sources
Requires
platform
approval
For Investors
Early days
Requires
platform
approval
For Project Owners

47. Bret Conkin on The Exchange with Amanda Lang –
CBC News
Help clients Profit
from the Alternative
Finance Economy
Services
o Platform Development
o Strategy/Consulting
o Capital Raising
o Project Management
o Systems Integration
o Operations
o Marketing/PR
o Business Development
WHAT WE DO

48. THANK YOU!
CONTACT:
Bret Conkin
Chief Evangelist
bret@crowdfundsuite.com
778.323.7297
Crowdfundland.co
@bretconkin
@crowdfundsuite