Crowd Investing Provides Ability to Sell Private-Placement Interests

By Keat Foong, Finance Editor

One of the growing numbers of crowd investing platforms has launched a capability aimed at providing real estate investors with greater liquidity.

Acquire Real Estate representatives said that its company is the first real estate crowdfunding site to create an exchange that offers investors a tool to put their equity interests up for re-sale. “The Acquire Exchange addresses is the biggest concern that any real estate investor has: the issue of illiquidity. With our new exchange, we hope to help alleviate that concern,” said Steven Bettinger, CEO of Acquire.

For example, if Acquire registered users require liquidity–after the one-year period that they are generally required by federal law to hold private placement investments—they have the option of using the exchange to put all or part of their Acquire investment for sale to other investors in the fund. This sale will be conducted through a live blind auction.

Acquire Real Estate was launched in January with seven partners, and has so far acquired $3 million in real estate investments. Bettinger suggested that what makes the crowdfunding site unique is that the company’s partners, all real estate professionals, first purchase the real estate investments that are offered for sale. Investors acquire a piece of the real estate investments acquired by the company, which holds a minimum equity of 10 to 25 percent in the deal. The company also connects accredited investors with sponsors or investments across the country in markets they may not have connections in, noted Bettinger.

Under the newly announced resale tool, investors needing to sell their interest in the investment would specify the terms, including the start and end times, provide current information concerning the investment, and other Acquire investors bid or not bid on the asset. The buyers review the documents and sign in several places, “and they can potentially complete the sale in a timely and efficient manner,” said Bettinger.

Bettinger said Acquire’s in-house technology automates the entire process. “That means a seamless coordination of the online transfer process for both the buyer and seller to replace what has previously been a manual, time-intensive transaction.”