Crowdfunding listing

I'm not sure how they are doing that without some official Public Offering with a detailed Prospectus/Offering Plan?

Any thoughts MCR?

https://nypost.com/2020/01/29/real-estate-app-compound-in-contract-to-buy-miami-condo/

Without reading the entire set of disclosures, they're making a private placement, so may not have to be fully registered (under the Securities Act of 1933), and may be limited to 'accredited investors' (of which I believe the definitions have recently changed -- I haven't kept up in this area. Still, there does need to be an Offering Memorandum.

The Post article says about the Miami condo "Compound’s condo ownership is fractionalized into 100,000 shares, with the minimum investment being $260 for 10 shares", so they're probably taking advantage of some recent regulatory change to permit a large number of smaller unaccredited investors. (classically, the number of non-accredited investors was limited to 35 (under Rule 505 & 506). Given the size of this particular unit, It could be under Rule 504, which the Miami unit wouldn't have qualified for (offering appeared to be for > $1m).

This may be legal under the JOBS Act, but it's pushing the envelope, and j suspect securities regulators would show some interest should an investor claim to have been defrauded.

looks like Streeteasy took down the listing

Now I've looked through the offering. Structurally, it's a REIT being offered under Rule 506(c) of Reg D. They can broadly advertise, but investors must be 'accredited' (>$1m in assets, >200k annual income). The company doing this ("Compound Projects") was only formed in Sept 2019.

There are enough typos in the doc to worry me, and their SE listing says "We are offering shares in Unit #2E within the Clinton Lofts, a 30-unit residential condominium located on Grand Avenue in the Clinton Hill neighborhood of Brooklyn, NY.", which is technically incorrect, which may be why it was pulled (they're offering shares of an unregistered offering, which intends to buy the unit).

Interestingly, if you're an early investor, you pick up some shares in another of their investments, "44 East", an apartment in a yet-to-be completed condo development in Austin TX.

(and just because I used to live in Austin): In their docs, the neighborhood of the 44 East property is described as "The Rainey Street Historic District is a neighborhood of historic homes, many of the bungalow style, in downtown Austin, Texas. Rainey Street is lined with craftsman houses that are actually bars, string-light covered patios, food trucks, craft cocktails, and a constant stream of people looking to party."

I remember when it was a rough neighborhood hard between I-35 and the river downtown. Now, "looking to party" is an understatement.

Either way this doesn't look very profitable especially relative to the risk. I'd rather just buy a good old-fashioned REIT paying 5 or 7%. Plenty of those around and they're very easy to liquidate...