•  Real Estate

Small Change Review

One of the few crowdfunded real estate platforms open to non-accredited investors, Small Change funds transit-oriented development that fits their sustainability and walkability criteria. Selection is limited, but for investors looking for a specific kind of civic impact as much as a return, Small Change is worth a look.

Small Change

  • Investment Types: Real Estate
  • Sectors: Commercial Real Estate and Residential Real Estate
  • Minimum Investment: $500
  • Advertised Returns: 8-10%
  • Open to all investors
  • Smooth on-boarding and easy to browse active/previous investments, including digestible pro-forma financials
  • Use of Reg CF means easy online communication with developers to answer questions
  • Low investment minimums
  • Low number of available investments
  • Unclear how much they charge sponsors
  • Short track record


This Small Change Review will help you learn more about Small Change's investment offerings, including how the alternative investments on Small Change are structured, and what your potential returns might be. You can read more about the criteria we use to review investment platforms here.

One of the most exciting things to watch as the investment crowdfunding ecosystem evolves is the emergence of niche platforms focused on particular geographies, industry sectors, or specialized investment types. While there are now dozens of crowdfunding real estate platforms, Small Change is carving out a niche by focusing on financing projects that they believe can “transform cities for the better”, as measured by a “Small Change Index” of Mobility, Sustainability, and Economic Vitality.

With an emphasis on principles of new urbanism and transit-oriented development, Small Change works to finance developers with novel projects for areas that may be underserved by traditional commercial development (this is a real estate crowdfunding platform Jane Jacobs would have approved of…).

Types of investments Small Change offers

Small Change offers a variety of residential, commercial, and mixed-use projects. Most investments are for 1-3 year terms, though one recent investment had an expected hold time of 5-10 years, while another was a loan for just 3 months. It’s rare to find this wide of a variety of projects on a smaller platform like Small Change, though it makes sense given their specific focus – the common thread across their projects is that new-urbanist lens of encouraging mixed-use, walkability, and transit-oriented development.

While some investments are open to everyone (via Reg CF), others are limited to accredited investors (via Reg D).

What do you get when investing with Small Change?

Specifics vary by investment, but in general investors receive some form of ownership interest in an LLC, though as with many crowdfunding investments, the details can get a bit byzantine, as Small Change summarizes succinctly in their FAQ:

Often, you will own an interest in a limited liability company that itself owns real estate. In other cases, you will own a promissory note that is backed by real estate. In still others, you’ll own an interest in a limited liability company that itself owns a promissory note backed by real estate.

How does Small Change make money?

Small Change itself doesn’t charge investors any fees, but as with many real estate investments there is often a profit share with the deal’s sponsor. For example, in one currently open investment, investors receive a pro-rata share of 30% of any profits from the sale of the property, with the remainder going to the developer.

Potential returns and cashflow

Details vary by offering, but as with most real estate crowdfunding investments, there is a periodic cash payment (tied usually either to rental payments or to interest payments), and in some cases also a share of profits (if any) when a property is sold or refinanced. For example, one active investment offers a preferred return of 8% annually,

which is distributed quarterly, and then a pro-rata share of 30% of the profits left after investors have received their original investment, their full preferred return, and after the sponsor is paid $20,000 (equal to their initial capital contribution). Again, details vary by investment.

Breadth of offerings on Small Change

As to be expected with a smaller niche platform, there’s usually only a few investments available at any given time, so if the particular investment doesn’t meet your needs, you’re on hold until a new deal comes along. (Though in fairness, that same situation is becoming more common even among larger platforms).

Although most projects have been in their native Pittsburgh, Small Change has also funded projects in New Orleans, Washington DC and Los Angeles.

Regulatory framework

The Reg CF investments offered on Small Change are formally offered via an affiliated entity, “NSSC Funding Portal”, which 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 – that said, Small Change does provide details on the developer’s past projects and experience.)

Prospective investors also have access to an online channel for asking questions of the developer (and viewing answers of prior questions from others).

Small Change does also offer some investments via SEC Reg D, which are only open to accredited investors. Those are offered via a different affiliated entity, and are not strictly speaking subject to the same due diligence and disclosure requirements as the Reg CF offerings. Prospective investors should be sure they understand which kind of offering they are reviewing before investing.

This review was first published on 26 March 2017.

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