One of the relatively few crowdfunded real estate platforms to use Reg CF, MinnowCFunding is a Title III Funding Portal open to all investors. Selection is quite limited, the website is lackluster, and as of this writing only one investor has signed on to fund the sole active project. For now, there are real estate investment platforms open to non-accredited investors with a better selection and more usable website.
- Website: https://minnowcfunding.com
- Investment Types: Real Estate
- Security Types: Equity
- Sectors: Commercial Real Estate and Residential Real Estate
- Minimum Investment: 1000
- Open to all investors
- Relatively low minimums ($1,000)
- Open to all investors
- Use of Reg CF means easy online communication with developers to answer questions
- Only one available investment (and all current and upcoming are in a limited geographical area)
- Website is lackluster compared with other investment crowdfunding sites
- No track record for prior investments
MinnowCFunding is a small California-based Reg CF investment crowdfunding platform.
Types of investments MinnowCFunding offers
MinnowCFunding offers investments in real estate projects. From the current and upcoming offerings, proceeds are primarily used to finance the down payment for purchase of properties for renovation or construction.
What do you get when investing with MinnowCFunding?
Details will vary by investment, but for the currently open offering investors receive common shares in an LLC created specifically for the development project.
MinnowCFunding fee structure
Details are hard to come by from the MinnowCFunding website, but based on the Form C filed with the SEC for the currently open investment, MinnowCFunding collects a hefty 7% fundraising fee from the amount raised.
Potential returns and cashflow
Details will vary by investment, but the pro-forma financials for the only currently active offering show two scenarios: one for a 5% annual dividend if the developed property is leased, and the other a 34% return on equity if the property is sold.
Breadth of offerings on MinnowCFunding
There is only one open investment as of this writing (with only one investor signed on so far).
Regulatory framework and due diligence expectations
MinnowCFunding is an SEC registered Title III Funding Portal. That means they are subject to a range of rules and obligations around investor education and due diligence. All developers offering Reg CF investments on Small Change will have been through background checks of key officers and owners, and there are clear links provided to the relevant SEC filings made by the developer. (Though unlike with startups or ongoing businesses, the “company” raising money for these projects is often a brand new LLC with no operating history). It’s worth noting that one of the managing members of the company raising the first offering is also an officer of MinnowCFunding, LLC.
Prospective investors also ostensibly have access to an online channel for asking questions of the developer (and viewing answers of prior questions from others).