Financial Poise

A Few Minutes with Marty Coyne, Chief Technology Officer of Connected Investors

Marty Coyne Connected InvestorsMarty Coyne is CTO of Connected Investors, the real estate investor’s marketplace + Community.  They have over 250,000 members and a unique Marketplace where investors can buy pieces of deals (crowdfunding) single deals (Typical commercial & residential investment properties) and packages of deals (Bulk property / note purchases).

Marty, is there hype “out there” about real estate crowdfunding?

For the past year we’ve been traveling the country, speaking at conferences and meeting with all the key players in the Real Estate CrowdFunding (RECF) world.  The level of excitement is through the roof as opportunity is seemingly busting down the door.  Throughout this whole process I’ve been weighing in my mind how all this preparation and activity inside of the crowdfunding community is resonating with the crowd itself. As the CTO of Connected Investors (CI), the world’s largest network of real estate investors, I can emphatically state that our members buy into the hype, but have lots of questions too.

What’s more important, the deal or the platform the deal is on?

Before looking at the deal itself, look at the folks behind the platform.  There are some outstanding people behind many of these platforms, but like anywhere you see a rush of money flowing, a lower element can be found.

OK, how should investors evaluate platforms or, more precisely, the people behind them?

You want to look at credibility, knowledge and focus.

Let’s take these things ones at a time.  How do you judge credibility?

Do your due diligence.  Do they know what they’re doing?  I don’t raise this issue lightly.  The complexities of regulations, compliance, securities laws and resources required are a significant barrier to entry.  And yet, there are those who apparently think popping up a website to join the fray is the price of admission.  Run from those people.

And knowledge?

Make sure that any platform you select has a real expertise and focus on real estate.  Speaking of focus, make sure that it is not some “special project” or trial balloon that some investment company is dabbling with to see what happens.  The climate around crowdfunding is evolving too quickly to handle as a side business.  Ask any platform you are considering what business it is in.  Crowdfunding promises to shake up a very profitable and comfortable status quo for a number of people and companies in traditional investing businesses.  Some of these folks are not yet sure yet what to do, so they are positioning themselves as CF-friendly, but only as a way to entice you into a discussion about how you should proceed on their proven path.

What else matters?

Look for a  deep marketing team.  Most of today’s platforms don’t go much further than friends and family and I would stay away from those. Make sure the platform is  safe, secure and easy to use.  The deal itself is an entirely different story.  The point is that you should not even consider a deal on a platform unless you are comfortable with the platform.  Assuming you are comfortable with the platform then you need to diligence the deal, understand the deal, and engage the same professionals you would engage in any deal that you did not find on a platform.

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