- East End Incentive Program in the Works to Drive Retail, Economic Development in the Area [Houston Business Journal]
- Brennan Investment Group To Construct 3 Warehouse Buildings on 10-Acre Site at I-45 and FM 1960, Near New ExxonMobil Campus [Houston Business Journal]
- Fourteen to 20 Percent of Voters Still Undecided About Astrodome Redevelopment Proposal on Tuesday’s Ballot [Houston Chronicle ($)]
- Details for Saturday’s Take-Home-a-Piece-of-the-Astrodome Yard Sale [Reliant Center; previously on Swamplot]
- State Seeking Partner To Design, Build, Operate 288 Toll Lanes [Houston Chronicle ($)]
- Will Investment Rule Changes Make Crowdfunding the Next Big Thing for Real Estate? [Real Estate Bisnow]
Photo of River Oaks District construction: Russell Hancock via Swamplot Flickr Pool
Crowdfunding for real estate? I see doom written all over it, just like any other industry, real estate is full of nuance and caveats that only professional with experience can understand. Amateurs investing just because they like a certain project have as much chance of getting their money back as putting it in the slot machine at McCarran airport.
@commonsense
I believe you when you say real estate is as nuanced as any other industry, but crowdfunding has succeeded in several other demanding fields – mass production, electronics, consumer design, etc. Crowd funded projects in those fields are successful when the creators can clearly demonstrate expertise and past results, often developed through prior, traditionally-funded work. So the idea isn’t to fund untested people and projects, it’s to use a new investment source where experienced creators can demonstrate demand and ability, but traditional funding has dried up.
@Alec, it’s great from the developer standpoint because it’s just another source of investment, however if you look at crowdfunded projects as a whole (through sites like kickstarter etc.) they have a very high rate of failure. I would attribute that to the fact that people who NEED crowdfunding are not professionals with proven records but are amateurs with naive ideas. If one is indeed a professional in their field with a good track record, traditional funding sources still are and always available, even in tough economic times.
1960 is ‘near’ the new ExxonMobil campus like the Astrodome or Uptown is ‘near’ downtown. I guess 7 miles being ‘near’ is all relative.
I’m with Commonsense, this just seems like a scheme to get money from “investors”, who is they see any return at all will be less than the paltry interest they’re getting from BOA and worst case, they’re parted writ their hard earned money..perminately. It’s amazing how few Amateur Investors every really do their research, they just get conned into putting money into a sexy project with all this promise of a windfall return that never materializes, you’d think they’d learn, even Pavlov’s dogs were smarter.
I remember when Denton Cooley lost 100 million in some real estate scheme in the eighties. He knew little about real estate investment but his colossal arrogance made him think he was brilliant in everything he attempted..his bankruptcy judge saw it differently. He eventually turned his fortunes around, I mean he was still the great Denton Cooley Cardiothurasic Surgeon, but he left the real estate to the “professionals”
I actually really like the idea of crowdsource funding for real estate. The real estate market is too frequently weighed down with the plodding work of the institutional investors and REITs. Anything that steps slightly outside of the box is tossed before renderings are even drawn. While industries like consumer electronics and automobiles race to deliver the next and greatest new thing to customers, the real estate industry seems to be forever stuck in doing the same crap over and over as long as it makes the predicted return. If done well, crowdsourcing could potentially offer up some real innovation in real estate and shake up the “monkey see, monkey do” work of the established actors in the industry. And if people lose their shirts, they will only have themselves to blame and cannot hide behind some big name REIT or investment bank.
Why aren’t those sites in the East End article (ranging from 26 to 133 acres) a possibility for the Botanic Gardens? Seems to belie HBG’s assertion that there is no other tract of land large enough for the project.
This 288 tollway is a load of you-know-what.
Hasn’t the Katy freeway taught us anything? Adding tolled lanes to freeways doesn’t provide anything other than a couple of years of perceived relief, underdelivers any time savings, exacerbates suburban sprawl, and further strains ‘down stream’ freeways.
It will only shift the existing bottlenecks to other places like the direct connectors to the med center and the 45/59 split without offering any true commuting alternatives.
If TxDOT was hell bent on building a tollraod to southern Harris/ northern Brazoria county, why not build the SH35 tollroad? That could at least help relieve traffic from both 45 and 288 and be a potential alternative route for many. It could shift the traffic patterns in southern Harris county and help ‘even’ the system out somewhat.
I agree the tollways down the middle of freeways is an awful idea, but the idiots ah TxDOT just keep pushing it. I heard they want to build an elevated one on 35 in San Antonio! NOBODY wants an elevated freeway!, that’s why my patents fought so hard to get 59 sunk as it cuts thru the Museum District. Elevated freeways are noisy and extremely ugly and obtrusive. The one in Austin next to UT is loathed, they’d never propose something like that in Austin again, that’s why I was stunned to hear the moron day TxDOT pushing for elevated freeways again, they really are the most obtuse agency in the state and in this backward Redneck state, that’s saying something
LSM – those aren’t single sites, just collections of blocks full of different owners and existing development, except for the KBR site which the botanical garden did consider for awhile
Commonsense – you raise very good concerns. We already see what happens when inexperienced, fly-by-night investors buy up cheap condos for $15k apiece. I get sick to my stomach thinking that these guys might now gang up and start developing.
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What I’d like to see more of the opposite concept: Micro loans for small businesses. The micro loan concept could mesh beautifully with the business – incubator / shared office space idea that people like Boxer Properties are doing. In fact, it really would be awesome to have a one-stop-shop for small businesses. You could rent a cubicle or a mercado kiosk, and also get a $5,000 loan to start off all in the same place.
@Mike – KBR site is owned by 1 company and will be turned over in Dec.
If the East End keeps bitching about the potential Botanical Garden at Gus Wortham, they will not only not get a Botanical Garden they will be pegged by the movers and shakers as difficult and get nothing. I mean maybe that’s what some of these old Eastenders want, the area to stay the same and no change, which is fine, but if they prevail scuttling The Botanical Garden, it will reverberate, believe me.
The debate shouldn’t be on if investing in a crowd-sourced real estate deal is a good idea, or if it’ll work, or what the pros/cons are, it’s if it should be allowed.
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The story talks about changes that make individuals allowed to invest in these things where they were not before.
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IMO that’s a great change. Why the hell have a law saying what people can and can’t invest in? In fact, even after the change there are still limits “Can’t do more than 5% if you make under …” that seem stupid.
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Let people take risks. Let people fail. “Freedom” also means the freedom to fuck up.
I think it is time we start cutting back on these incentive programs. We gave a lot of breaks to get this economy booming, now its time we take advantage of it rather than keep giving things away.