Disruptive Real Estate Play?
Every now and then, something disruptive comes along in the real estate industry — what WestMill Capital is doing with 1351 H Street building in Washington DC is one of those initiatives. Dan and Ben Miller have been beta testing the idea that anyone should be able to invest in real estate projects in their community — not just accredited investors.
Give the article a read, then come back.
I’ll wait.
The bigger vision according to Ben?
imagine if we become the platform for how people participate in and build and invest in their environment.
What WestMill Capital is doing is more geared at the real estate investment market, but I can see it impacting residential down the line.
Imagine this scenario.
A home down the street forecloses.
Your local neighborhood rallies and invests the money to take ownership over the house — or cover the mortgage for their neighbor in exchange for a percentage of the property ( or even a low interest loan the home owner can pay back) — via a simple online platform similar to KickStarter.
In the case where the community takes ownership of the house, the property is put up for rent, or even put on a site like AirBnB to start generating income right away.
A great renter is eventually found, the the rent is collected via that same online platform and put back into the community fund to pay the mortgage (or the neighbors if income is more than expenses).
What do you think? Possible?
[Hat tip to my friend Jodi – from her bag of link goodies that consistently show up in my gmail and gchat]
Patrick Hake
Posted at 14:09h, 26 NovemberInteresting concept. It may have the potential to work. Although, I have seen some pretty nasty infighting in basic Home Owner Associations, when it was just a matter of maintenance and enforcement of basic HOA rules. I’m not sure how smooth things would run on an investment when the only threshold to becoming a partner was residency in a community and cash. I have lots of great neighbors that I would never want to be business partners with.
Jason Richards
Posted at 14:32h, 26 NovemberFascinating concept… Having formed and implemented commercial syndication’s myself, there is a critical threshold of “is this deal big enough to warrant the logistics and headaches” that usually prevents small deals from happening. I can guarantee their prototype deal is nowhere justified on a procedural level. Their concept of providing the service to do this with what I assume is the ultimate goal of streamlining and creating a financially feasible path to do so is ambitious and it remains to be seen what the end product will be. I bet their product ends up appealing to large scale rehab and commercial investment and development solely for the fact that bringing in the “unaccredited investor” creates new avenues for fees and layers over and above what is acceptable in the “accredited market”. This would lay the groundwork new abuses which goes against the spirit of what they are trying to acccomplish. I would think it to be unlikely on an individual residential level but it could lay the groundwork for new policy changes down the road (maybe good, maybe not so good).