California’s crowdfunding or peer-to-peer lending initiatives emerged after the adoption of the Jumpstart Our Business Startup (JOBS) Act of 2012, which significantly democratized the process in which sponsors can raise funds for real estate acquisitions and development. The new law allowed the previously banned practice of advertising or publicly soliciting private funding from accredited individuals and firms. Individuals with a net worth of $1,000,000, excluding ownership of their personal residences, or with an yearly income of $200,000 or a household with $300,000 per annum, if filed together with a spouse, can become an accredited investor. Kenny Slaught points out that the amendments gave the green light to California borrowers and lenders to participate in debt and equity financing, in which loans generate income in the form of interest, without an official financial institution involved as an intermediary. The online marketplace has created a new avenue for property owners and funders to browse new investment offerings, perform due diligence, access dashboards to monitor how assets and financial products are performing.
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