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Rainmaker
5,582,595
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Lyn,

Crowd sourcing in real estate happens to be a tool that has been used to buy blighted neighborhoods and restoring them.  It does work if done properly with a legal contract.  Ron spoke at one of those meetings.  Buying a piece of real estate becomes similar to a REIT, and it does have to meet those types of legal requirements.

Jan 21, 2020 09:56 AM
Rainmaker
4,096,583
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

I remember some time back when, Erin Bates the daughter of Belinda Spillman wrote about crowd-sourcing as a method of home ownership.  Not sure where that conversation led but maybe one of them could make a return visit to AR to give us an update(if any).  Besides it would be nice to see some previously active ActiveRain members.  

Jan 21, 2020 09:35 AM
Ambassador
4,255,414
Debe Maxwell, CRS
www.iCharlotteHomes.com | The Maxwell House Group | RE/MAX Executive | (704) 491-3310 - Charlotte, NC
The right Charlotte REALTOR!

 My first question is what's in it for them? 

#2 - They'll be LEASING the property to the buyer. 

#3 - Who determines if the property increases in value or decreased in value?

I suggest using Ribbon, paying 1.5% fee for them to pay cash while you sell your house and later Close on the purchase. MOST buyers are putting the 1.5% (or at least half of it) on the sellers to pay as Closing costs. It's a win-win for everyone - buyers & sellers. 

OH and buyers actually DO have OWNERSHIP!!

Jan 21, 2020 11:13 AM
Rainmaker
1,735,162
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

I didn't read the entire article but it appears to be another way of equity sharing. 

My first thought is:
The big print giveth and the small print taketh away.  I haven't read the small print. 

Jan 21, 2020 10:39 AM
Rainmaker
894,225
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

 Jane’s 5% ownership of the partnership that owns her dream home does not automatically give Jane the right to inhabit the property. Jane signs a lease with the partnership to inhabit the home. 

Jan 21, 2020 10:19 AM
Ambassador
1,376,755
Susan Emo
Sotheby's International Realty Canada - Brokerage - Kingston, ON
Kingston and the 1000 Islands Area

Very interesting -  I like the concept.  And a Seller should have no issues as they're getting an all cash offer.  Win Win

Jan 21, 2020 09:53 AM
Rainmaker
2,641,192
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Thinking outside the box sometimes pays off better than within the box

Jan 21, 2020 09:44 AM
Rainer
272,025
Don Baker
Lane Realty - Eatonton, GA
Lake Sinclair Specialist

crowd sourcing your home purchase.  I'm not sure a seller would take that offer.  I wouldn't.

Jan 21, 2020 09:25 AM
Rainer
306,637
Libby Cousins
Extraordinary Processing - Spokane, WA
Contract Mortgage Processor, licensed in WA

 Well, it is an interesting concept and useful for the right buyer. I can see that they make their money by leasing the buyer the property but I would have concerns about the improvements and upkeep. It said they use a 3rd party to provide property management services. I would hate to have to schedule repairs to my home and get someone else's approval. I imagine they would only approve structural issues for joint cost. The rest are likely up to the leasor yet Fleq reaps the rewards of the increase of value. 

That being said, it has its potential upsides. I wonder how you move out? Do they buy out your equity after you give 30 days of notice or do they make you wait until it is sold?

Jan 21, 2020 11:50 AM
Ambassador
4,578,313
Jeff Dowler, CRS
eXp Realty of California, Inc. - Carlsbad, CA
The Southern California Relocation Dude

I didn't read the entire article but it's an intriguing concept. I wonder how well it's working and what, if any issues have come up in any transactions?

Jeff

Jan 21, 2020 12:00 PM
Rainmaker
1,228,770
Thomas J. Nelson, REALTOR ® e-Pro CRS RCS-D Vets
Big Block Realty 858.232.8722 - La Jolla, CA
& Host of Postcards From Success Podcast

Very interesting. I'm with Carol Williams on this one, I want the fine print.

Also, I need to talk to a couple buyer/seller agents that have successfully completed a transaction this way.

Jan 21, 2020 11:49 AM
Rainmaker
1,403,864
Raymond E. Camp
Ontario, NY
Licensed Real Estate Salesperson Greater Rochester

And also remember it has to appraise for them to let you rent it!

Jan 21, 2020 10:58 AM
Ambassador
3,054,625
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Oh boy, let's hope this does not become popular.  It seems to me that it is an equity/ownership model. Other companies are doing this.  

Jan 21, 2020 10:15 AM
Ambassador
2,603,515
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Owning a very small percentage of interest in a home is not the traditional method of home ownership. More like leasing.

Jan 21, 2020 04:02 PM
Rainmaker
4,205,996
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

 A fancy rent to own concept where you provide equity, not a security deposit, and get the same benefits as a renter. I bet the fine print is loaded with the larger equity stake having some onerous rights.

Jan 21, 2020 03:16 PM
Rainmaker
888,397
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

That is an interesting option and didn't have the word Bitcoin in it anywhere.

For many years Reverse Mortgages have been available for home purchases, where houses are acquired at about 65% of market value and no mortgage payment. And still few takers.

All we tend to do is hear and see with the optics of the skeptic.   When it comes to Crowd Funding, accountability may be hard to impose. 

Jan 21, 2020 09:54 AM
Rainmaker
742,806
Carla Freund
Keller Williams Preferred Realty - Raleigh, NC
Carolina Life RealEstate & Relocation 919-602-8489

 This leaves me with more questions! I'm sure it could work for some but, is it the best thing for them?

Jan 22, 2020 04:18 AM
Ambassador
5,405,937
Bob Crane
Woodland Management Service / Woodland Real Estate, EXP - Stevens Point, WI
Forestland Experts! 715-204-9671

Is a mortgage by a different name not still a mortgage?

Jan 21, 2020 05:41 PM
Ambassador
1,820,641
Alan May
Jameson Sotheby's International Realty - Evanston, IL
A moving experience!

Seems unnecessarily complicated, at least at first glance.  I'd like to know more.  It does seem like it would appeal to that millenial crowd.

Jan 21, 2020 12:01 PM
Rainmaker
6,603,303
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

Let us know when this works for your next home purchase.

Jan 21, 2020 11:14 AM
Rainmaker
1,633,225
Georgie Hunter R(S) 58089
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

Interesting concept, but it brings up a lot of questions.  I'd be worried about the security of being able to stay over the long run.

Jan 22, 2020 02:37 PM
Rainmaker
821,467
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

Sounds a bit like co-op ownership. It might work to put some people in homes that have limited finances. However, I would examine the Joint Venture agreement VERY carefully. There are so many unknowns, e.g. amount of membership fee, who determines "share price" and what if someon else comes in and offers to buy out resident renter at a higher price? The association may choose to go with that to optimize its profits for the other equity holders. 

Jan 22, 2020 12:09 PM