Tech startup iFunding is developing a real-estate crowdfunding app for smartphones and tablets. Co-founders Sohin Shah and William Skelley told Real Estate Weekly that they hope to launch the program in late April.
It could become the first app launched by a real-estate specific crowdfunding platform in the U.S., enabling users to make multimillion-dollar investments on the go. So far, only larger crowdfunding platforms like Kickstarter, which focuses on consumer goods, offer apps.
“The entire world is moving to mobile devices. It’s the same reason why you can trade stocks or do e-banking with your phone,” said Skelley. “We found that there were a lot of people who logged into our website through their mobile devices. We are looking to respond to customers’ needs. So we decided to build an app that can perform the same tasks as our website.”
Renderings show that the app will allow users to access information on a building’s rental income, tenants, and neighborhood before deciding to invest.
Crowdfunding platforms raise capital from accredited investors via the internet. Single investments can be as small as a few thousand dollars, allowing small-time, accredited investors to buy into buildings they could otherwise never afford to invest in.
IFunding, launched in 2012, has raised more than $20 million from accredited investors. Its investments across the U.S. range from $40,000 single-family houses to multimillion-dollar developments. The company is currently partnering with the Mavrix Group in the planned construction of a $250-million condo tower on Fulton Street in the Financial District, for which it hopes to raise $50 million through crowdfunding. This week, iFunding is set to open an office in Boston.
Investing large sums of money with a phone inevitably raises questions over safety and reliability, but Shah explained that the app will have the same safety mechanisms as popular stock-trading apps offered by Etrade or TD Ameritrade. Only accredited investors registered on iFunding’s website can use the app, and will have to log in first.
“We ask you to confirm an investment once you type it in and then Sohin reviews it before it goes any further,” said Skelley. “Any investment above $25,000 I personally approve.”