What is real estate crowdfunding?

Over the last 10 years, the investing world has seen many firsts, including several new types of opportunities for investors. One developing opportunity is equity crowdfunding, which offers the chance for everyday investors to own a piece of, and participate in the growth of, private companies.  Until the mid 2010s, it was quite difficult for most people to access these types of opportunities. That changed with the 2012, Jumpstart Our Business Startups Act, known as the JOBS Act, which paved the way for investors to access private company investments. At that point, companies could start to leverage the JOBS Act and its innovative and community-building crowdfunding model to raise rounds of capital.  This introduction to equity crowdfunding is most helpful for investors starting to explore the space and the opportunities it holds.  How equity crowdfunding works At a high level, companies can use certain crowdfunding regulations (like Regulation CF), adopted by the Securities and Exchange Commission (SEC), to offer shares to everyday investors. Companies using crowdfunding must work within the SEC’s guidelines, and comply with federal regulations. Unlike traditional investments offered by brokerage accounts (think Charles Schawb, Merrill Lynch, or Fidelity), equity crowdfunding opportunities often live on crowdfunding platforms or on the private company website directly. These platforms and self-hosted fundraises provide simple, accessible investment processes just like your typical brokerage.  There are numerous equity crowdfunding platforms and some (like Crowdfunding appeals to companies because they can raise money from a broad range of people and continue to build their community. As an investor, you can diversify your portfolio and invest in private companies that may see great returns in the long run. Substack, for example, recently ran a These investors were new and existing community members, and now they all can share in Substack’s potential success. Opportunities and benefits of equity crowdfunding Because of its unique nature, equity crowdfunding offers a broad range of benefits to investors. It an opportunity to: Get in on the ground floor Equity crowdfunding gives investors the chance to invest in companies early, sometimes even before traditional venture capital or private investment. If the company is successful, investors could see very high returns. For example, the company Soliton raised $11 million of common stock in an equity round in 2019. They raised that $11 million at an $86 million valuation, and were acquired by Diversify Crowdfunding opportunities allow investors to broaden their investment portfolio, and diversify their investments. As an everyday investor, you are no longer limited to trading only traditional stocks and bonds. With just a small amount of capital, you can diversify your portfolio and invest in private companies through crowdfunding. Support companies you love Crowdfunding is a way for individuals to support businesses they love. For example, The Oakland Ballers, the new Oakland baseball team, recently launched Enjoy perks Investors may receive perks for investing in a crowdfunding round. For example, you may get early access to product releases, opportunities to meet key executives, company swag, and invitations to VIP events. Companies can benefit from investor feedback on their products or services, knowing that you have an incentive to provide an honest review to help the company grow in the long run.  What are the risks of crowdfunding investing? While there are many possible benefits of equity crowdfunding, there are some risks for investors:  Lack of liquidity One major risk of investing in a private company through crowdfunding is the possible lack of liquidity. This means that you may not be able to sell your shares until the company reaches an exit or Initial Public Offering (IPO). Your money may be tied up in the company for an unknown period of time, so you should only invest if you are comfortable with that possibility.  For example, Uber completed its Series A round in 2011, but did not go public until 2019. Although it did not raise via crowdfunding, this example shows that even very successful companies may have lengthy time horizons for investors to see a return on their investment. Some companies may provide liquidity opportunities before an exit or IPO, but that is not guaranteed. It is important to check each specific investment opportunity to see if it provides liquidity.  Startup risk Startups tend to be risky. With the potential for high reward also comes great risks. In an often-cited statistic, about 90% of startup companies fail. Research from Cost to the company From a company perspective, there is an added cost of compliance for the initial raise as well as ongoing obligations. These costs are not nearly as high as for a traditional IPO, but they may be more expensive than seeking a private raise led mainly by one or two institutional investors. This added cost can have a negative financial impact on the company if the raise does not earn them as much capital as they anticipated. When researching potential investments, you may see references to a “minimum raise amount,” which helps the company ensure it raises enough to cover all of its costs with a large amount designated for company growth once the raise is complete. Additionally, in some crowdfunding offerings, companies are responsible for keeping investors informed of their investment status on an ongoing basis. This is an extra cost for companies, but does provide good insight for investors.  How to get started? If all of this detail about equity crowdfunding excites you, your next step is to search online for equity crowdfunding opportunities just like you might research traditional stocks. There are many equity crowdfunding platforms — StartEngine, Wefunder, DealMaker, and Republic among them — that host numerous opportunities.  Other platforms, such as DealMaker, help companies host the raise on their own websites. You will want to do some research to confirm you are comfortable investing on any of the sites. One key feature of these crowdfunding platforms is that businesses usually need to pitch the platforms themselves in order to partner with the platform. The platforms are incentivized to host successful raises because the platforms take a cut of the raise, so the platforms does its own background research and vets companies before launching a raise. You will find many different investment opportunities on each crowdfunding platform. Typically, companies will have their own investment websites, pages explaining the investment opportunity, and update posts showing offering progress. You will find all of the company’s offering documents on the platform or site. These offering documents usually include pitch decks, marketing materials, and any regulatory filings. For example, After your research, making the actual investment is a seamless process. For example, let’s say you want to invest in Platforms like The future of the industry Online crowdfunding platforms and current regulatory frameworks make it easier and more efficient for investors to participate in equity crowdfunding. Equity crowdfunding opens a new route for companies to raise money, and the data backs up the dramatic increase over the last several years. Since 2020, companies have Invest in Pacaso’s Reg A offering Looking to diversify your portfolio and participate in a Reg A offering? Pacaso is giving investors the chance to invest in our company via Reg A. As a pioneer and leader of the co-ownership category in real estate, Pacaso has a successful track record backed by venture capital support and proven leaders, including former executives at Zillow, dotloop and Hotwire. With nearly $100 million in adjusted gross profit in just four years, Pacaso is tapping into a growing market and is poised to enter the next stage of growth. Learn more about the

Key takeaways I’m Spencer — entrepreneur, angel investor, business leader, co-founder and chairman of In times of economic uncertainty, savvy buyers turn to real estate to park their money. Real estate holds equity. While the greater macro-economic environment continues to fluctuate, many proptech companies continue to offer homebuyers, sellers and investors innovative products and services to drive growth and consumer confidence. I recently took a deep dive into some of proptech's recent earning reports and would like to share some of my personal observations specific to real estate, housing, and predictions within the greater macro-economic environment. 1. We are After digging into the earnings reports from Zillow Group, Redfin, Offerpad and Opendoor, most of these companies’ CEOs confirm what economists are saying about macro housing: 2023 won’t be a great year, especially for housing transactions, but pricing will be stable and maybe even trend up. Here are some perspectives from industry leaders in early 2023: Pacaso data confirms this stabilization in second-home markets as well, as we’ve experienced increased transactions in January and February.  Deposits have increased 90% in the first two months of 2023, compared to the last two months of 2022. Pacaso is seeing homebuyers coming back now that they have adjusted to the newly higher interest rates of 2023.  2. Cost cutting is starting to work. Longtime unprofitable proptech companies like Zillow and Redfin are finally making a dent in their losses.  In late 2022, I 3. More consumer innovation is coming. Zillow is improving its touring functionality and expanding natural language search options. ChatGPT-style search will soon be a feature at Zillow and other real estate platforms. Cross-partnership is also coming into play — Zillow and Opendoor, for instance, are collaborating to allow customers to seamlessly get an Opendoor quote directly from Zillow. 4. Companies are prioritizing mortgage attach. Redfin, Zillow and all the rest are laser focused on driving mortgage attach. Attaching a mortgage to a home transaction allows Zillow and the other players to monetize each transaction more efficiently. At scale, this will drive higher revenue without incurring additional cost. Zillow runs Zillow Home Loans, which is their internal mortgage lender, and Redfin acquired Bay Equity Home Loans in 2022 to build out its internal lending capability. Redfin tested mortgage attachments at an event that brought together mortgage lenders and real estate agents: 5. Businesses are monetizing the sell side. After building their businesses on referring buy-side leads to paying agents (Zillow and Realtor.com) or by closing leads with their own agents (Redfin), companies are now moving towards monetizing the Zillow, Realtor.com, and Redfin’s partner agent business traditionally make money via buyer agents (agents representing homebuyers) and prioritize buy-side agents on their platforms. Today, real estate companies are trying to broaden their product offerings to support listing agents (agents representing homesellers) to appeal to everyone in the home transaction. Additionally, with a few major legal cases in the works that affect buy-side commissions, these companies are positioning themselves for any possible future.  6. Discounting commissions will come to an end. Redfin’s 10+ year experiment in offering a discounted commission to gain market share is getting close to its end.  Redfin got its start as  a “discount brokerage,” offering buyers and sellers the services of an agent for less than the traditional 2.5-3% commission by refunding some of the agent’s commission. Over the years, they’ve found that their true value comes from providing the best possible experience to buyers and sellers  rather than providing the lowest-cost experience. 7. Everyone is waiting for CoStar Group’s big move. Whether it’s starting a $100M+ ad campaign for

Investing in real estate is often a significant financial commitment, and how you structure ownership can have major implications for liability, taxes, and day-to-day management. A real estate LLC is designed to protect personal assets while giving one or more owners the ability to efficiently manage and operate the property. Whether you are a solo investor or planning to co-own a home with friends, family, or other partners, understanding how a real estate LLC works is essential before making your next move. How does a real estate LLC work? An LLC can be used as a An LLC functions as a separate legal entity. This means it can: For co-owners, the LLC simplifies decision-making, allows for structured voting or responsibilities, and ensures each member’s interests are clearly defined. It can also make adding new members or transferring ownership shares easier, without retitling the property each time. How is a real estate LLC funded? One of the advantages of LLC property ownership is its simplicity and clarity around finances. An LLC pays for real estate purchases using its own funds, which makes it clear who owns what within the entity. With Pacaso, buyers acquire Financing an LLC property is straightforward. Buyers may use: Pacaso also provides flexible financing options for qualified buyers, making it easier to participate in Who owns the property in an LLC? Ownership of the property is tied directly to the membership interests in the LLC. Each member’s stake represents a percentage of ownership, rather than owning the property directly. This structure ensures clarity, legal protection, and flexibility for all co-owners, while still allowing them to enjoy the benefits of property ownership. What are the benefits of owning real estate in an LLC? LLC property ownership offers several key advantages for investors: What are the cons of a real estate LLC? LLC property ownership offers many advantages, but there are also potential downsides to consider: How do you start a real estate LLC? Creating a real estate LLC involves several clear steps. While the process may vary slightly by state, the general approach includes: How does Pacaso LLC co-ownership work? When you purchase a share of a Pacaso home, an LLC is created to hold the property, and Pacaso fully manages the LLC on behalf of all co-owners. This means Pacaso handles the legal, financial, and administrative responsibilities so you don’t have to worry about the complexities of managing a property or an LLC yourself. Through this structure, co-owners enjoy the full benefits of property ownership: By leveraging LLCs, Pacaso makes it easier for multiple buyers to confidently invest in high-end homes, ensuring that ownership is legally secure, professionally managed, and designed to protect all participants. Fractional ownership through a Pacaso LLC allows more people to access and enjoy luxury real estate without the traditional burdens of sole ownership. And should your needs change and you decide to move on, Pacaso streamlines the process of Explore Pacaso’s

Cryptocurrency is proving to be less of a trend and more of a force that’s here to stay. And with a single Bitcoin ringing up at a value of over $60,000 (as of October 2021), it makes sense that cryptocurrency investors are thinking big when it comes to tapping into the power of their crypto stashes.  Can you use cryptocurrency to buy a house? If you’re considering using Bitcoin, Ethereum, Dogecoin, Litecoin or one of a number of other cryptocurrencies to purchase a home, you’re not alone. It’s becoming increasingly common, but there are some challenges to be aware of, and the volatility of the cryptocurrency market can make some transactions complicated.  Former child actor Brock Pierce, now an entrepreneur and director of the Bitcoin Foundation, is reportedly the first person to use cryptocurrency to buy a home, using $1.2 million worth of Bitcoin as collateral to secure a loan for a property in Amsterdam in 2019.  While not everyone can be a “Bitcoin billionaire” like Pierce, you can convert your cryptocurrency into real estate. Here’s how (and some pitfalls to watch out for).  How do you buy a home with cryptocurrency? There are a few options for using cryptocurrency to Convert cryptocurrency to cash One of the simplest ways to use your cryptocurrency nest egg to buy a home is to sell the cryptocurrency for fiat money (dollars) using a service like Borrow against cryptocurrency Companies like Transfer cryptocurrency directly to the seller While it can be challenging to find a seller willing to accept cryptocurrency as payment for a home, many sellers are warming up to the idea. In fact, some sellers are looking to acquire Bitcoin, Ethereum and other cryptocurrencies. In those cases, offering cryptocurrency might push your offer to the front of the pack.  What are the pros to buying a home with cryptocurrency? While pros and cons of buying a home with cryptocurrency may be different depending on which method you choose, here are a few pros to consider:  What are the cons to buying a home with cryptocurrency? As enticing as cryptocurrency may be, it’s still something of an unknown entity in the real estate industry. When considering buying a home with cryptocurrency, watch out for these drawbacks: The bottom line If you want to buy a home with cryptocurrency, do your homework and be prepared to face some hurdles. If you’re not sure you’re cut out to be a cryptocurrency pioneer, consider giving the real estate industry a few years to get more comfortable with digital currencies before dropping any cryptocurrency on a house.  But if you don’t want to wait, consider using cryptocurrency to buy a share of a Pacaso second home. The process is streamlined  — no hurdles!

Exploring the appeal of owning multiple homes across the globe Owning multiple homes has evolved into more than a symbol of success — it is a lifestyle strategy that prioritizes choice, flexibility, and immersion in the world’s most sought-after destinations. For many, curating a portfolio of second homes in iconic cities means enjoying a new standard of living, where each address offers its own rhythm, amenities, and cultural vibrancy. This lifestyle provides year-round access to curated experiences, from Key lifestyle benefits of a global portfolio A thoughtfully curated collection of luxury homes allows you to seamlessly transition between vibrant metropolises and tranquil getaways, all while enjoying the comforts and distinctiveness of each location. Whether you’re drawn to the cultural allure of Paris, the outdoor recreation of Aspen, or the classic elegance of London, owning multiple homes means each season offers a new adventure. The experience goes beyond the walls: it’s about spontaneous weekends in the Alps, private dinners overlooking the Seine, and sunrises on Florida’s coastline. Co-ownership enhances this flexibility, empowering you to enjoy prime residences without the constraints of full ownership. The Pacaso approach transforms second home ownership from a distant aspiration to a tangible reality for many seeking this dynamic, travel-rich lifestyle. Smart financial strategies for owning multiple homes Luxury real estate market trends in 2025 Iconic homes in top destinations A truly global portfolio is defined by distinctive homes that reflect local character and elevate day-to-day living. For example, Paris is celebrated for refined apartments with historic details and prime locations, London for its blend of tradition and contemporary design, Aspen for its alpine elegance, and Palm Beach for classic coastal sophistication. Each residence becomes a personal touchstone in a collection that is both a gateway and an investment, offering you the flexibility to enjoy art openings, seasonal festivals, and exclusive events as a local. Pacaso’s curated selection of homes across these cities sets a new standard for modern global living, giving you the opportunity to experience — and own — a piece of the world’s finest neighborhoods. Among these, Ownership in iconic alpine locales is just as meaningful. The elevated outdoor lifestyle of mountain markets attracts those who prize adventure and privacy, but also want a well-connected hub for family and friends. For those drawn to ocean breezes and contemporary living, Palm Beach and South Florida offer timeless appeal. Waterfront estates balance sophisticated design with proximity to vibrant culture and leisure. Tips for building your own second home collection Start your global journey with Pacaso Owning multiple homes across continents brings both lifestyle rewards and financial sophistication. Whether you are considering your first international addition or expanding your existing portfolio, Pacaso offers a streamlined path to ownership in world-class destinations. View homes in vibrant cities like

Pacaso is a team of real estate and tech veterans with a mission: Enrich lives by making second home ownership possible and enjoyable for more people.  We offer buyers a smarter way to approach owning a second home: professionally managed Buying and owning a second home through Pacaso dramatically reduces costs and lessens management and scheduling hassles. This lets buyers who are sitting on the sidelines have the chance to become true property owners of a home that previously was beyond their price range.  And it opens up opportunities for real estate agents to have new conversations with buyers and sellers. They can access the second home of their dreams in one of their favorite locations for less money than if they purchased a whole home.   Co-owning real estate is not a new concept. But doing it on your own with friends or family often creates hassle and strain on personal relationships. Many DIY owners find it daunting to communicate effectively about scheduling, maintenance and managing the home.  Pacaso eliminates those issues, making co-ownership easy for the first time by creating a professionally managed, property-specific LLC design especially for co-ownership. A limited liability company (LLC) ensures that the owners are not personally liable for the company’s debts or liabilities. It combines some elements of a partnership, sole proprietorship and a corporation. For buyers, co-ownership increases their purchasing power. It also reduces the stress and pressure of whole home ownership. Gone is the feeling of guilt from leaving a home empty much of the year. Gone is the hassle of vacation rental platforms, the anxiety of knowing that dozens (or hundreds) of strangers are traveling in and out of your home, and the tedium of dealing with repairs.  The benefits for buyers, sellers, owners Buyers can shop from Pacaso’s curated listings. Alternatively, if they find an active listing they’d love to co-own, they can submit the listing to Pacaso; if it meets our specifications, we’ll partner with the buyer to purchase and close on the home, as well as identify vetted co-owners. Each home is co-owned by a maximum of eight owners who use it with only family and friends; no outside rentals are allowed. Owners schedule time in the home with our innovative and equitable SmartStay system on the owner app. And instead of worrying about maintenance, Pacaso's professionally managed LLC will take care of all property management needs. Sellers have two options to work with Pacaso. First, they can decide to sell their whole home to us. Pacaso is a qualified buyer, and we pay premium prices for turnkey homes in the right locations.  Alternatively, current second home owners can decide to keep as much as half of the ownership in their home while unlocking their equity by selling the other portion through Pacaso’ selldown program. This allows owners to keep the home they love while tapping into its liquidity and continuing to enjoy access to their second home. Why partner with Pacaso today? The Pacaso crew, led by former executives from Zillow, has more than 100 years of combined expertise using big ideas and innovative technology to create great real estate experiences. The company’s founders believe second homeownership enhances people’s lives because it has enhanced theirs. And it’s the driving force for the company.  This co-ownership model is a chance for you to bring a modern way of owning as well as fresh inventory to your customers.  Be part of the next wave of innovation, re-inventing how second homes are bought, sold and owned — and creating new business opportunities for you.  -------- Quiz 1. What type of second home ownership does Pacaso offer? A. Whole ownership of a second home B. Time share ownership D. None of the above 2. True or false: Co-ownership is not new, but Pacaso is solving the major pain points associated with the DIY approach. B. False 3. The advantages of Pacaso co-ownership for buyers include: A. They can now afford to own a home previously out of reach financially. They can bring a listing, from Pacaso or any website, that they are excited about to Pacaso. If it’s a fit, Pacaso will buy the home and bring together co-owners. B. They get true real estate property ownership of a fully managed single-family home with fewer hassles and headaches.  4. The advantages of working with Pacaso for sellers include: A. Pacaso pays a premium for turnkey homes in select locations. B. Sellers can unlock equity and still retain up to half ownership of their homes. C. Sellers can remain co-owners of their homes but will have to find the buyers themselves. 5. The professionally managed LLC also handles property management. B. False