Abstract
This article uses a hand-collected sample of 733 projects from seven leading U.S.-based real estate crowdfunding (RECF) platforms. We analyze whether property, financing, and crowdfunding campaign characteristics, as well as information risk, can explain the expected returns of RECF campaigns based on the principles of investment risks in the real estate market. In line with these principles, we find that projects with higher investment risk (commercial real estate and development or redevelopment) on average have higher expected returns. The financing characteristics consistently indicate that equity-financed projects and higher leverage levels correlate with higher expected returns. Higher expected returns are also associated with the campaign characteristics of later payments to investors and higher minimum investment amounts. Finally, we document a consistently negative relationship between location-based information risk factors (measured by internet penetration, financial establishments, and related growth rates) and the offered expected returns.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
