Individual investors from the US and other countries can now take a piece out of a prime Manhattan real estate pie without having to spend a fortune.
Prodigy Network, a real estate crowd-funding company, offers investors an opportunity to own a stake through equity crowdfunding at their 17 John property situated at the heart of Manhattan, one of the great real estate hubs in the world. The property is a 15-storey high residential tower that will serve as extended-stay condos.
This form of investment is in accordance with Jumpstart Our Business Startups or JOBS Act of 2012. A report from Forbes.com explains that the passing into a law of this Act has given way for small start-ups to publicly solicit investment funds via the web.
Who would have thought that this kind of investment once catering only for the few affluent could now be within reach for the general public? For Rodrigo Nino, Chief Executive Officer and founder of Prodigy Network, it was a realization of his mission to provide equal opportunities when it comes to investing.
"We have learned that crowdfunding not only democratizes investments, it also makes projects viable that otherwise would not be possible," he said according to a post in Miami Herald's Financial Content.
According to a CNBC article, Brian Newman, the director of business development for Prodigy Network, explained that investors of the 17 John project could get six percent in preferred return and up to 15 percent of internal rate of return, on top of their equity which will be based on their investment capital.
He also added that, although the JOBS Act has paved the way for this new trend of digital age investment scheme to level the playing field for public investors, it has also laid out safety nets for startup companies by requiring a level of accreditation to would-be investors. In the case of these crowd-funded real estate projects, investors must either be no less than $1 million in net worth, or have had an income of $200,000 dollars in the past two years.
In the company's website, Prodigy Network mentioned that 17John is a joint venture project between its affiliate and that of Metro Loft Management. It is also backed up by Deutsche Bank and a New York investor with about $30 million worth in equity.
Investors from the US could bring in as low as $10,000, while non-US residents have a minimum investment of $50,000. Those who may want to partake in this venture must visit the site and create an account for them to gain access and use of the company's secured online platform.
Prodigy Network also advises their potential investors to make sure they have read the offering memorandum, subscription agreements, and other related transaction documents prior to investing in their property.
