The Next Big Thing

Once every few years we at Catalus stumble upon a trend or industry that we believe will generate attractive investment opportunities for many years to come and in some cases meaningfully alter the world that we live in. Sometimes these trends are controversial or contrarian, while others are completely unrecognized by the public. In this case, there's an almost cult-like following, and yet still we feel that there is an under-appreciation of the magnitude of this new industry’s eventual impact.

For decades, small-scale real estate developers and speculators have struggled with the inefficiency and difficulty of raising capital for deals sized $100k to $10 million. This size bracket is too small for institutional investors and dominated by unpredictable high net worth individuals who aren't in the business of investing, but rather do it in their spare time.

On the other side of the equation are the tens of millions of high net worth individuals in the US and globally that have accumulated savings, but don't have the knowledge or contacts to expand their investment portfolios beyond the traditional options. These individuals see real estate acquisitions, renovations, and developments happening all around them during their everyday lives, but rarely have access to invest, and don’t have the expertise to analyze the opportunities that they are presented with.

Crowdfunding will change all of that. If you’re not familiar with the industry, a good explanation is HERE.

Crowdfunding will enable technology to revolutionize how capital is raised, first in the $100k-$10 million size range, and then in progressively larger transactions as market-leading platforms are accepted in the deal community. Technology will also streamline the due diligence and closing processes, creating more efficiency and opportunity. As a result, real estate operators will have reliable access to capital through crowdfunding platforms and individuals will be able to participate in transactions with risk/reward ratios typically unattainable through traditional methods (the kicker is that some of these deals are really good… and some are pretty horrible). 

We've spent the last year studying the industry, meeting with the management of the most sophisticated platforms, and investing in deals. We're likely some of the best informed individuals on crowdfunding, and we continue to be impressed with its potential. I've personally been investing in these deals since early 2014 with excellent results, and we have now built a multi-million dollar portfolio at Catalus.

More to come.