NYCE is Using Crowdfunding to Bridge the Socio-economic Divide in Real Estate Investing
Last year, NYCE was the fastest real estate company to raise $ 1 million through Regulation Crowdfunding (Reg CF). It marked the first step in the company’s mission “to create 100,000 millionaires of color through access to world-class real estate assets”.
In particular, NYCE is using the expanded Reg CF rules to offer these investment opportunities to people of color who have not had access in the past because they did not meet the criteria for accredited investors.
What NYCE has achieved so far
NYCE has come a long way since launching in April 2020:
- Set the record for fastest real estate company to raise $ 1 million through Reg CF.
- This created 2,000 first-time BIPOC real estate investors.
- Acquisition of more than 1,500 apartments for the pipeline plus additional new developments amounting to US $ 220 million for the investor community (without a single venture capital or institutional investor).
- The founders gained 1.1 million new followers on Instagram.
- Created a waiting list of over 52,000 people for the app.
NYCE’s first project
NYCE recently closed a round of funding for its first deal, which was listed on the Republic. The project is called TEMPLE I and is a 100-bed hacker’s house in Philadelphia near Temple University.
The upcoming Reg CF rule is changing
The Jumpstart Our Business Startups (JOBS) Act, passed in 2012, opened doors to business that non-accredited investors previously had no access to. Title III of the JOBS Act, also known as Regulation Crowdfunding (Reg CF), allowed an issuer to raise a maximum of $ 1.07 million in fundraising from an unlimited number of investors, including NYCE non-accredited investors, within a twelve month period worked for his TEMPLE project.
That amount rises to $ 5 million, which opens up even more options for non-accredited investors. This is important for several reasons:
- Instead of $ 1.07 million from that road, sponsors like NYCE can raise nearly five times more.
- This will likely result in non-accredited investors getting better deals as it will make it more attractive to sponsors.
Where NYCE wants to go next
The NYCE team will be addressing the upcoming rule changes and has a goal of reaching 100,000 new investors by 2021.
NYCE also has plans to maximize Regulation A + rules, which have just been expanded to fund up to $ 75 million a year from that road. This means NYCE will be able to raise up to $ 80 million a year from investors, which is what the company intends to do, according to founder Philip Michael.
Michael said NYCE will consider building a real estate investment trust (REIT) later to raise more capital for the mission and provide more liquidity to investors.
Ultimately, however, Michael believes in the way things work: “Every decision I make is checked for two things: 1) Will this serve my investing community? And 2) will it bring us closer to 100,000 new millionaires? This is ours the sole purpose of serving a segment that has not been considered in this game as best we can. “
NYCE has over $ 500 million worth of real estate in the pipeline, including:
- Philicon Square, a new technology district in Philadelphia.
- TEMPLE II.
- A 324 unit base project in San Antonio.
- A 444 unit in Jacksonville property.
- Two big projects in Austin.
- A Virginia Beach skyscraper.
NYCE is also building a program for its investor community that includes access to financial advisors and mentors. NYCE will also teach its community members how to raise funds for their own real estate projects in the same ways NYCE has successfully used.