Investor Interest Propelling $2.5B RECF Market Valuation for 2015
There is a growing divide in the industry between those who are building their business models from a social objective and those who are building from a business objective. From a social objective, some communities are investing in projects within their neighborhoods. They are doing so in hopes of revitalizing communities and promoting gentrification. From a business objective, the best companies offer the opportunity to build wealth in real estate. This is done through innovative technology and access to real estate experts. Either way, there remains an ongoing struggle for platforms to find the best approach to provide value to investors.
Furthermore, investors aren’t simply looking for a return on their money, investor’s want access to the best deals. They want to invest in a solid platform that has a proven track record and superior customer service to manage their portfolios. As a result of the real estate downturn, it is an uphill battle for platforms. Each must prove their credibility and worthiness in order to acquire new customers and retain them.
Barriers to RECF Platforms
In addition, given the continued revisions to the JOBs Act in the past few years, platforms are having to continue to update their compliance procedures. Whether the platforms want to or not, they must in order to simply remain in the industry. An additional barrier platforms have to deal with is the reluctance that investor have of sharing their credit card. This is similar to the e-commerce days when people were reluctant to give their credit card information online.
A platform can distinguish itself from the competition by creating a sense of community and exclusivity for their customers. If platforms can “wow” their customers to make them buy online and stay, the likelihood of the projected $2.5B market valuation for 2015 is not unreasonable to foresee.