Real Estate Crrowdfunding Platforms

Manch,

When is your crowdfunding platform ready to go??? :grin:

http://www.rexburgstandardjournal.com/opinion/columns/investing-in-real-estate-on-crowdfunding-platforms/article_e60631be-23a9-11e6-9a79-d7f7b78ca25a.html

I actually don’t like crowdfunding. Must be me being anti-social. Unless it’s some huge project upward of 10M there’s little point in crowdfunding.

Have you heard of “Home Union”? It lets you buy remotely and they have local partnerships to take care of management. That’s more up my alley. So if I ever want to branch out of state I will give that a serious look.

I quickly looked at HomeUnion’s website. Sounds too good to be true. The fact is, Manch, you probably know way more of the local market and how to invest than some young yahoo miles away in some pathetic state that they’ve identified as prime investment grade. Yeah, right. We have prime investment grade right here. Again, the concept of someone doing a good job for you, for a cost, is too good to be true. I am old fashioned. I grind it out, on my terms.

Speaking of the devil, got an email from HomeUnion today. :smile:

That house is in a suburb of Greenville SC. I don’t have any intention to invest out of CA for now, heck, not even out of the Bay Area. But I want to keep abreast of the latest trends. The cash flow is certainly enticing though…

I smell some Bernie Madoff big time…

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[quote=“sfdragonboy, post:3, topic:125, full:true”]
how to invest than some young yahoo miles away in some pathetic state that they’ve identified as prime investment grade. Yeah, right.

Oceanfront property in Arizona? :laughing:

@tomhVallejo, I think it was you who commented some time ago about Mello Roos districts that sometimes extend the time they collect taxes. Can you comment about that further?

Well, I have no recollection of that. However, it is my understanding that, a CFD - the special district formed to issue the bonds - has no sunset clause. They can exist as long as the bonds are not paid off. And, what some have done is to not issue all of the debt they are authorized to. Then they can “kite” the bonds, paying off one while issuing another, and thus remain a viable, taxing entity that affects all property owners within the district. All the district had to do to live into perpetuity is to make sure there are active bonds open.

Here is an explanatory paragraph from a grand jury report on CFDs from two years ago:

CFD Longevity

CFD does not have an “end date,” unless one is specified in its resolution of formation by the establishing authority (California Government Code, 1982, § 53330.7). This means that potentially a CFD may continue in perpetuity. If bonds have been issued by a CFD, special taxes will be charged annually until the bond has been retired. A single bond may not be issued for a period longer than 40 years. However, this applies only to the term of the bond; it does not place any restriction of the term of the CFD (§ 53351.e). After bonds are paid off, a CFD tax may continue to be collected for maintenance of the facilities. In many instances, CFDs can refund bonds to take advantage of lower bond interest rates and then use the difference (spread) between the original interest rate and the new bond interest rate to create revenue to be used for other purposes. This call proviso will reset the 40-year period and potentially the CFD will continue in perpetuity. The creating legislative organization may, after a public hearing, eliminate a type of facility or service; but it may not finance any facility or service not specified in the resolution of formation. The creating legislative body is permitted to terminate a CFD; however, a CFD may not be terminated while a bond is active. The controlling agency of the CFD clearly does not have any motivation or incentive to terminate a CFD since it would in effect eliminate an entity that is a ready-made organization for future debt obligations. The burden of that motivation remains with the tax paying public who pay the special CFD tax.