These crowdfunding or peer-to-peer lending services were birthed from the adoption of the Jumpstart Our Business Startup (JOBS) Act in 2012, which significantly expanded the ways in which sponsors raise capital for real estate acquisitions and development. The new regulation legalized the banned practice of advertising or openly soliciting private funding from interested accredited individuals and companies. Citizens with a net worth of $1,000,000, not including their personal residences, or annual income of $200,000 per individual or $300,000 per household, if filed jointly with a spouse, can become an accredited investor. Kenny Slaught discusses how the amendments opened the door to individual borrowers and lenders taking part in debt and equity financing, where loans generate income in the form of interest, without a bank serving as an intermediary. The online marketplace has created a new pathway for property owners and funders to browse current investment offerings, perform due diligence, and maintain dashboards to track how assets and financial products are doing.
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