Property firms partner to help smaller investors

Property crowdfunding models are enabling investors to diversify their property portfolio with smaller amounts of committed capital.

Fractional property platform manager, DomaCom, has announced a Heads of Agreement with investment marketplace, EstateBaron, to help smaller investors enter property markets.

Under the agreement, DomaCom will provide the back-end online book build process and compliance for properties listed by Estate Baron. The partnership has created the first of a new generation of online ‘crowd investing’ sites raising capital for opportunities in real estate.

Estate Baron co-founder, Moresh Kokane, said he was attracted to the DomaCom model because of its processing system, which would allow EstateBaron to better connect smaller investors with opportunities in real estate.

“DomaCom’s fully compliant fund manager capabilities, access to a secondary market and efficient execution sealed the deal for us,” said Mr Kokane.

DomaCom launched Australia’s first online fund to provide a property investment solution for the SMSF market and other long-term investors. Users can acquire a fractional acquisition of units in a trust structure that enables them to choose the property they want.

While DomaCom’s model is intermediated with investors coming from the traditional adviser networks, the firm expects a new market for its platform will emerge from crowd funding providers who want to use the regulated structure.

Property crowd funding models have flourished internationally, enabling investors to diversify their property portfolio with smaller amounts of committed capital.

Also changing Australia’s property landscape is efforts from crowd funding platform, VentureCrowd, with the newly introduced VentureCrowd Property – a crowd funding subsidiary to enable eligible investors to build a portfolio of properties online from as little as $100.

VentureCrowd Property signed a Memorandum of Understanding with Mirvac Group, which has provided two of its Sydney apartments to trial the crowd funding method.

“As part of our mandate to innovate we have agreed to provide two apartments from our popular Sydney projects to the trial, enabling us to better understand the ins and outs of crowd funding,” said John Carfi, CEO residential development, Mirvac Group.

VentureCrowd CEO, Jeremy Colless, said the company expects to see legislative changes in 2015 to allow crowd funding investment opportunities to be extended to retail investors.