When one thinks about financial institutions there are some adjectives that may come to mind: Stodgy. Conservative. Old-fashioned. Risk-averse. As such, innovation tends to make traditional financial institutions uncomfortable. And if innovation makes them uncomfortable, then what is the path forward for new ways to raise capital, or to try new and different projects that don’t fit with local comps?

Here, Eve Picker, founder of Small Change, presents on how crowdfunding, along with financial technology (aka fintech), pave the path for innovation in housing that previously was blocked by conventional regulations.

In this next video, Picker challenges a group of innovative professionals, including Yifan Zhang, founder and CEO, Loftium; HB Siegel, principal investigator, Department of Ideas, Amazon ; Brent Gaisford, director, Abundant Housing LA, COO and co-founder, Treehouse Co-Living ; and Yusef Freeman, managing director, California, McCormack Baron Salazar to help solve this pressing housing issue.

Not only will these capital-raising mechanisms leverage the innovation and passion of new investors, they will also benefit from a new social construct derived from the investor’s personal involvement. The new investor landscape will come from those who don’t have a history with real estate, and therefore don’t have expectations of a 15% or higher return. New investors will have lower expectations that will lead to innovative concepts and projects.

One of the hurdles that remains will be getting those new investors involved and confident in the technology surrounding this process. And those willing to take the risk will be entering into a large, well-established market, according to some who have been tracking crowdfunding in real estate for years now.  
“Crowdfunding is a massive industry already,” says Adam Gower, Ph.D., host of the podcast National Real Estate Forum. “Billions have been raised.” 

Gower wrote a short book, How to Invest in Real Estate: The Crowd Fund Way, that could be the entry for many others who want to be involved in a healthy, robust, smart industry.

This story appears as it was originally published on our sister site, www.hiveforhousing.com.