Spotlight On Real Estate -
The Only Yield Play In Crowd
As crowdfunding matures, it is finding footholds in any number of industries.
But one sector it has paired up with like chocolate to peanut butter since the beginning is real estate.
Which has always seemed—to me, anyway—a little bit surprising.
Crowdfunding tends to work best for companies who excite the imagination.
Who inspire us to see how the world can be changed through innovation.
Normally, in those contexts, we’re talking about tech companies.
Or sometimes, crowdfunding works well for companies who just have a great big customer base that already loves their product.
That primarily means consumer goods and service companies.
And then there’s real estate.
A Different Kind of Crowd Investment
Real estate deals typically aren’t going to change the world.
There isn’t normally some rabid following connected to the companies involved.
As we’ll see, there can be exceptions to both of those rules.
But generally speaking, real estate doesn’t fit the mold for either of the two criteria I talked about above for what makes a successful, high-demand crowd deal.
So… What’s the attraction?
Well, for one thing, there’s something very basic… very fundamental about land ownership.
They sure aren’t making any more of it.
And we’ve all seen the explosion over the past few decades in residential real estate pricing in the United States in particular.
So, while real estate companies aren’t likely to become the next Facebook or Tesla, there’s a level of prestige and “smart money” upside feelings that can be very appealing to a good-sized portion of the populace.
To a large degree, these may not be the same people who are jumping into most other funding portal startups.
But they’re around.
And as we’ll see, they’re sometimes cutting bigger checks on these deals than your average crowdfunding investor, as well.
After all, if you’re wanting to become a virtual landlord, the logic often ties in more to getting that regular rent payment than it does seeking out a 20x return.
If you’re investing for yield, a percentage of a larger number means a larger payout.
And some of these real estate deals—even in crowd—do pay dividends.
Which is a really unusual feature for a crowd security.
One other thing about real estate that’s near and dear to our hearts here at Disruptor Nation is the natural synergies between real estate and splitting those assets up into fractional ownership.
As we’ve said many times, we view fractional ownership of real world assets as one of the next major phases of crowdfunding.
And not much gets more REAL than real estate. With their relatively expensive nature and constant presence everywhere you look, buildings are a natural fit to be diced up for collective ownership… and returns!
A Snapshot From CClear
You might ask where we’re getting insights about how much investors are putting into real estate deals relative to the rest of crowdland.
Great question.
Turns out, our good friends over at CClear recently dropped a deep dive report showcasing real estate and construction activity under Reg CF.
As of June 30, the sector was on-track to outpace previous years, with over $35.5 million raised through 1H25 being on pace to beat last year’s all-time sector high $64.6 million for real estate and construction.
It’s important to note that these numbers are for Reg CF offerings alone. While data on Reg A deals is much more sparsely reported, we know from both first-hand experience and anecdotal evidence that real estate offerings have been some of the more successful crowd deals in terms of capital raised, and we wouldn’t be surprised if the actual Reg CF + Reg A capital numbers were 50-100% larger than the CClear data indicate.
Meanwhile, the compounded annual growth rate for the space in terms of capital raised is a very healthy 51.6% since 2016.
Funds raised on a per-deal basis is surging this year, at over $2.1 million compared to an industry all-time average of $915,000.
And that growth is showcased even more significantly in investor check sizes, which are running at nearly triple the long-term average at over $6,000 per investment. This comps quite impressively with the $2,200 sector average, which in turn runs higher than the Reg CF-wide average of $1,500 per check.
Despite this otherwise strong sectoral performance, CClear does note that 2025 is on track for six-year lows on at least one number—the number of deals launched. New filings lagged at just 15 through the first six months of the year, compared to numbers as high as 42 through H1 last year and 64 in 2021.
That said, crowd issuers in real estate and construction are also showing gains in quality, with nearly 42% of issuers already generating revenues. Compare that to 35.6% last year, and just 12% back in 2018.
So Who Are These Guys?
Even though people tend to generalize real estate and construction as simple property development and management, there’s actually a lot more diversity at play within the sector.
Deals run from modular home construction, to rental housing platforms, to fractional investing in vacation properties.
We searched up three live crowd deals in the real estate and construction space worth checking out.
To start, we’re looking at Azure Printed Homes on WeFunder. We’ve seen a few of these prefab affordable microhome shops popping up over the past few years. Azure’s differentiator is that their units are made from recycled plastic. The equivalent of 100,000 plastic water bottles goes into each unit! Ambitious, but hey, it’s a start. And look… the company had over $5 million in revenues last year, and they’re valuing themselves at just $75 million. Meanwhile, uber-present modular crowd competitor Boxabl grossed less than $3.4 million last year, and they say they’re worth over $3 billion. Oh but wait, Elon Musk bought one. Anyway, check out relative bargain Azure’s round on WeFunder here.
Turning to the wilder side of things, we find Modern Mill, which is looking to get to a “world beyond wood” with its new sustainable building materials, which are made from upcycled rice hulls. While this seems ambitious, Modern Mill is no idea on the back of a napkin. The company generated over $20 million in sales last year. You can find its offering page on the StartEngine platform here. Just a heads-up if you like the deal: don’t sleep on it TOO long, because the company is expected to take its crowd round offline on July 28.
We’ll close with something much smaller, but definitely something more “pure” in terms of the fractional approach that Disruptor Nation is such a big fan of. On the Small Change funding platform we found a CF round for the Community Commons at the Mulberry, a historic luxury townhome in Baltimore. The backers are raising up to $1.2 million to complete renovations to the property, which will ultimately house the headquarters for a nonprofit tenant on the main floor, and five furnished one-bedroom residences upstairs geared toward travelers and corporate relocation opportunities.
For those who don’t know Baltimore, this might not sound too exciting. But as someone who worked in this neighborhood specifically, I can tell you it puts the charm in Charm City, and there’s a real localized market opportunity to be exploited here. Former presidential candidate Andrew Yang (of Universal Basic Income fame) and Freakonomics are also connected to this project, as is Disruptor Nation friend and crowdfunding industry association head Jenny Kassan. Jenny is a real class act, and her involvement gives me confidence that money invested will be managed 100% ethically, and she’ll do everything she can to realize a return for investors (and cash flow payouts from rent ARE part of the business plan). Learn more about the Community Commons project here.
‘Til Next Time!
Sean Levine
Managing Editor
Disruptor Nation
INVESTMENTX RECEIVED NO COMPENSATION FROM—NOR HOLDS ANY POSITION IN—ANY CROWD ISSUER MENTIONED IN THIS ARTICLE.
