The JOBS Act allowed for the legalization of crowdfunding, the business accepted term for kickstarter campaigns that allow common consumers to invest in projects that they feel could be profitable or are simply close to their hearts. Benjamin and Daniel Miller revolutionized this applicability of this process in regards to real estate when they started Fundrise, their corporation dedicated to allowing the community to invest in commercial real estate projects. According to an article completed by The New York Times, since the company’s conception in August of 2012, the pair has introduced this concept to the demanding real estate market, which now has several other companies engaging in crowdfunding to raise appropriate funds for projects.
This system has proven to be very successful in a variety of markets. However, for the Miller brothers, who recently managed to raise just over thirty million dollars for a commercial project, the system has been particularly profitable. Others have followed their example. These competitors rely on investors who are notably wealthy and able to offer risky investments, typically ranging between one million and twenty million dollars.
Unlike those who have followed the Miller brothers, their ideal has always been to focus their crowdfunding on the everyday citizen. To Fundrise, this platform allows the community to really speak and contribute to the design of the commercial properties in the area. To allow private equity investors to contribute too heavily to a commercial property often results in a mismatch between what is built and what the community really needs. Allowing for smaller donations—sometimes as small as one hundred dollars—assists the Millers in guaranteeing that the finished product provides what the neighborhood not only wants but needs from its service buildings.
The Miller way of crowdfunding has been very successful. In the last several months, they have had three hundred developers sign up for their site alone. Together with the community, they are building a real estate market in New York City that is accessible to all.