Grand Rapids-based Loquidity — an online crowdfunding platform dedicated to real estate investment opportunities, particularly those in the Midwest — launched last month and will include a number of Detroit prospects in the near future.
While the website will consider investors and deals nationwide, Co-founder and COO Joseph Elias says the driving goal is to inspire local firms and “ex-pats” to invest in their hometowns. Accredited investors can contribute as low as $5,000 toward a single deal.
“We see these real estate (deals), especially in the west Michigan and Detroit areas, as a catalyst for people to invest in their cities,” Elias says. “Crowdfunding is new to a lot of people in the Midwest and, from our perspective, is a great way for people to get into real estate investment through more passive means.”
The new platform allows real estate professionals to publicly advertise their various deals, which are first vetted by Loquidity. While the startup performs a background check on the sponsor, its staff may spend up to a few weeks researching the deal and whether or not it can yield the returns the sponsor claims.
“Any investment has its own risk, but we try to de-risk it as much as possible (before posting it to our site),” Elias says. “It won’t go up if there’s too much risk associated with it or we have questions regarding the sponsor’s track record. We have to be very careful and diligent about what properties we show on our website.”
The site’s first deal, posted in late June, is for a 72-unit, multifamily property in Grand Rapids. The sponsor has until Oct. 30 to meet his goal of raising $985,000 to $1.4 million. If he doesn’t meet the goal, all funds raised will be returned to investors, Elias says. Investors do not have to pay to join the website.
For more information about the enterprise, which is currently vetting deals in Detroit, Chicago, and Cincinnati, visit loquidity.com.
IN RELATED NEWS, Grand Rapids-based Varnum announced that more than 100 Michigan startups have received help through its MiSpringboard program, which launched in 2011.
Since that time, the program has provided more than $400,000 in free legal services to new and second-stage businesses, most of which are technology related.
“There is a great entrepreneurial spirit here in Michigan and many young individuals are taking risks and starting new companies,” says Harvey Koning, a Varnum attorney who has worked with several clients in the program. “We have a lot of talent here and this new generation of entrepreneurs grew up in a technology-driven world and are creating innovative businesses using technology in new and creative ways.”