New intuitive software and mobile applications, says Kenny Slaught, give investors and builders a greater selection of lending and borrowing opportunities throughout a variety of real estate asset classes and geographies. California’s crowdfunding or peer-to-peer lending projects emerged after the incorporation of the Jumpstart Our Business Startup (JOBS) Act in 2012, which greatly democratized the ways in which sponsors can raise funds for real estate acquisitions and development. The new regulation allows the previously outlawed practice of advertising or openly soliciting private funding from accredited individuals and firms. Anyone with a net worth of over $1,000,000, not including ownership of their personal residences, or with an annual income of $200,000 or a household with $300,000 per year, if filed jointly with a spouse, can be an accredited investor. The amendments provide the green light to individual borrowers and lenders to participate in debt and equity financing, where loans generate income in the form of interest, without an official financial institution involved as an intermediary. The online marketplace has created a new road for property owners and funders to browse new investment opportunities, perform due diligence, access dashboards to track how their assets and financial products are performing over time.
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