I can’t speak for other nations, but certainly here in Britain the property market is a constant source of chatter. Central to this chatter is often the difficult times faced by younger people who aspire to one day owning their own home. Faced with rising levels of student debt, uncertain job markets and a still largely inflated property market, and the dream of owning a home is one unavailable to most youngsters in Britain.
A number of sites have emerged in the past 12 months that have looked to apply the crowdfunding model to real estate in an attempt to make getting on the property ladder in some way affordable. The typical model, as adopted by The House Crowd, sees people group together financially to purchase a property. The property is then refurbished and rented out, with each ‘investor’ receiving an annual yield. After a few years, the property is then sold, at which point each investor gets their share back along with a share of the profit.
The Prodigy Network take a slightly different approach. Whereas the House Crowd et al are using the crowd to finance existing properties, the Prodigy Network crowdfund the construction of new buildings. The Colombian based company first made waves with the announcement that they would be crowdfunding the construction of a new skyscraper in their home town of Bogota.
Their latest project sees them take a similar approach to the heart of New York City. The project, called 17 John, will see the creation of a 23 story new extended stay hotel in downtown Manhattan. In addition to the hotel, the development will include a range of apartments, ranging from studios up to two-bedroom apartments, with a total of 191 units upon construction.
Unlike the other projects however, this one is largely for serious investors. Participation in the project will require at least $100,000, which will go into a Real Estate Participation. As with other crowdfunding models, investors will receive a return based upon the rental yield from the property.