SouthPark will soon see a new, upscale townhouse development financed in part by an unusual source of equity: Crowdfunding.
To help pay for the project, the developer has launched a $1.7 million offering, allowing accredited investors to invest in the townhouses. An accredited investor is defined as someone with $200,000 or more of annual income or a net worth of more than $1 million.
That could give the developer, Charlotte-based Saratoga Asset Management, access to a larger potential pool of investors than traditional lenders.
FullCapitalStack, an online portal for wealthy individuals seeking real estate investment opportunities and a subsidiary of Charlotte-based QuietStream Financial, is handling the equity offering. Nikki Baldonieri, chief investment officer for FullCapitalStack and a managing director at QuietStream, said the website should make raising capital easier and let developers find more investors.
“Historically, a developer or operator would spend a ton of time going to friends and family, knocking on doors, going to meals, lunch meetings, dinner meetings,” Baldonieri said. “Hopefully, now they can educate a broader base using this technology.”
Saratoga Asset Management managing partner Raymond Wetherington echoed Baldonieri.
“Working with FullCapitalStack allows us to broaden our relationships and present this project to the entire community of eligible investors, rather than just the partners in our existing circle,” he said.
The development, at Fairview and Closeburn roads, will consist of 27 townhouses on a 2.6-acre site. The builders will construct six, three-story townhouse buildings, with each unit just under 2,800 square feet. The townhouses will each include a two-car garage, along with high-end touches such as steel appliances, hardwood floors and a fireplace.
Called SouthPark City Homes, the development is set for completion in 2017. Alan Simonini Homes is the lead builder.
FullCapitalStack’s online listing for SouthPark City Homes shows a minimum investment of $25,000 is required, with an estimated rate of return of 23 percent.
Crowdfunding investments in North Carolina are currently limited to accredited investors. But bills are pending in the state legislature that would open such investments up to the general public.
FullCapitalStack launched in January. The company handles all aspects of researching and investing in real estate deals electronically, with a dashboard for users that’s similar to online banking. Baldonieri said she expects more real estate operators to move to such platforms as technology improves and younger potential investors start accumulating wealth.
“They need to move to more of a technology-based platform,” she said, “or the next generation of investors are going to pass them by.”