Real Estate Crowd Fund vs. REIT 

The use of crowdfunding purchase real estate is a new class of investment.  The objective is to create a more direct line of investment and level of transparency between the investor and their investment.

Public markets, like the stock market, attempt to do this; crowdfunding websites, like BuildingBITs, are attempting to do this better.

When an investor purchases shares of stock from a publically traded Real Estate Investment Trust (REIT) they are purchasing a small percentage of ownership in a large portfolio of assets across the country. In crowdfunding, investors are owners of a Commercial Real Estate share which entitles them to a specific property’s appreciation and returns.  Owning shares of stock versus owning a discrete percentage of a building’s worth is very different.

For starters, when you invest in a specific building…you know what you’re getting.  REITs are constantly buying/selling/trading assets.  On any given day, no one can tell you the “state of the portfolio”.  Therefore, REITS provide “guidance” on what they own because they don’t know for sure what they own.  With crowdfunding this is not the case; you (the investor) make an investment in a property with an address, a zip code, parcel number and tax I.D. There is no guesswork about how your investment is performing.

This direct line of site to your investment decision has benefits. For starters, you can connect the income you receive to a piece of property that you own.  If income increases, you benefit without all the added layers of administration and reporting necessary for a public company must do before they can pay investors.


When you are ready to expand your investment into real estate through crowdfunding, you may be able to purchase more of the same building, or a different building, because the ownership units are available for trading.  BuildingBITs is creating a trading super-highway for making sure this is available to their investors. This liquidity feature will be the game-changer and provide investors at-large an opportunity to “trade” into and out of real estate deals just like they a stock investment- but with the knowledge that their direct investment is secured by an address- not some unnamed portfolio out there (somewhere).

If you want geographic diversity, crowdfunding can deliver this also by providing investment options in a different city or state. Still- with the same results for the investor in terms of direct investment and transparent reporting on owned investments. No guesswork. You buy it, you own your percentage share of an asset’s appreciation and returns.


Becoming a real estate mogul doesn’t mean you must manage the property yourself or rely on a massive mutual fund to pay you a penny per dollar invested after their fees. You can invest in real estate, participate in its upside (just like the rich guys) and have an opportunity to sell your percent on the open market to the highest bidder all while knowing exactly what you own or where it’s located.  Crowdfunding is the future and BuildingBITs is at the forefront of making this happen.

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