The Beatles and Joe Cocker made the notion of getting by with a little help from their friends into a hit song. You could even say the concept applies between the two since Joe Cocker had to get a little help (permission) from the Beatles to record his version of the song. That kind of cooperation is a concept that worked well for the music industry then, and certainly is one that can work for the self storage industry now.
When most people think of the investing in the self storage industry they—well, they don’t unless they have a sizeable amount to donate. It is not unusual to see a facility go for a million dollars which is a pretty substantial amount for an individual investor. For those without pockets that deep there is another way to invest in the self storage industry—crowd funding.
The concept is simple. People that are interested in investing can go to the website to research the available options so that they know exactly where there money is going. They can even take care of the paperwork online.
Realty Mogul has been pioneering the idea and so far it has been quit successful. Since it launched in March it has acquired 27 properties with a value of over a million dollars.
“We’re very pleased to be the first real estate crowdfunding company to get a self-storage facility under our belt, and delighted that we had such a robust reaction from our investors,” said Jilliene Helman, Realty Mogul’s co-founder and CEO said.
The Realty Mogul announced that success in late December, and according to the company it has already raised over $10 million through crowd funding.
“Our early success confirms that people are frustrated with the low returns offered by banks and are looking for alternative ways to invest,” she said. “We’ve made it easy to participate in real estate investing via the Internet by creating a fantastic user experience.”
Theoretically the idea is quite similar to another common method by which people invest in self storage facilities, REITs or real estate investment trust. The big difference though is that while with crowd funding you are able to study and choose what you invest in while in a REIT the company takes your money and invests in what it sees fit.
“Crowdfunding is going to revolutionize capital formation in real estate,” Helman said. “It is here to stay.”
“Realty Mogul Reaches $10 Million Dollar Crowdfunding Milestone.” PRNewswire; 30 December 2013.
“Realty Mogul Secures $1 Million for First-Ever Equity Crowdfunding of a Self-Storage Facility.” PRNewswire; 24 December 2013.