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Real Estate Crowdfunding: How Does Jasper Compare?

Real Estate Crowdfunding: How Does Jasper Compare?

While real estate crowdfunding and Jasper do share some similarities, there are several important distinctions. To understand the differences between the two, it is best to first define Jasper and real estate crowdfunding.

What is Jasper?

Direct ownership of commercial property is expensive, and the alternative of buying shares in more traditional property syndicates can have some major pitfalls. Jasper has made it possible for any investors of all types to invest in high-quality commercial real estate. Here's how it works:

Investors create an account through Jasper's online platform. From there, individuals will be able to review various commercial real estate opportunities and select properties to invest their funds. All information is clear and transparent, including information detailing what fees the investor will pay and why.

What is real estate crowdfunding?

Real estate crowd funding involves a group, or "crowd", of investors who pool their funds together to purchase an investment property. In doing so, everyday investors can put small amounts of money toward commercial property and, depending on the fund, will receive dividends on the income the investment property produces. The return on investment is contingent on how the property performs over the investment horizon.

Similarities between Jasper & Crowdfunding

Both real estate crowdfunding and Jasper offer investors the opportunity to pool capital from multiple investors to lower the barrier to entry and improve diversification. When investing in commercial real estate traditionally, most investors only have enough capital to invest into one single property. However, when investing on real estate crowdfunding platforms or with Jasper, investors put small amounts of money into several different investment opportunities. As an example, an investor may place $5,000 in an office tower, $7,500 in a retail site, and $5,000 into an industrial building. This diversification helps investors reap returns on several different investments rather than only relying on one single property whilst spreading an investor’s risk across multiple properties, asset classes and geographies.

Advantages to investing with Jasper vs Crowdfunding

Crowdfunding marketplaces are purely transactional businesses, which mean their revenues are tied to how many opportunities they place on their platform. This can lead to a misalignment of incentives which ultimately mean weaker returns for those who invest.

1. Due diligence

Jasper’s investment team performs thorough analysis and due diligence on every opportunity we make available to our investors. Our team has worked for some of the world's leading property funds, with experience extending to over 1,000 transactions for more than $12B worth of institutional-grade real estate. Crowdfunding marketplace owners do not typically complete their own rigorous due diligence; they rely on a third-party operator to have the investment expertise. Crowdfunded deals are often lightly vetted by third parties that are not associated with the crowdfunding platform or marketplace. Instead, the crowdfunding platform simply acts as an intermediary.

2. Fee structure

Jasper's fee structure is built primarily around ongoing fund management fees and the property's performance. This means we are incentivised to build long term investor relationships and drive investor returns. Crowdfunding platforms, on the other hand, operate as a brokerage and charge fees on total funds raised. This fee structure urges crowdfunding platforms to sell as much as they can, regardless of investment quality.

3. Jasper invests alongside investors

Unlike a large number of real estate crowdfunding syndicates, Jasper and our operating partners invest alongside our investors in every single deal. Jasper has a vested interest in properties that produce strong returns – for our investors, and ourselves. Typically, crowdfunding platforms do not invest their own capital in the offers on their marketplace and tend to focus more on connecting people who need money with people who have money.

4. Liquidity

Crowdfunded real estate deals are generally not liquid investments with most real estate crowdfunding platforms having an investment period of up to ten years. Jasper aims to launch a secondary market in 2020 that will offer investors the opportunity to sell their property investments to other investors on Jasper's platform. This will provide enhanced liquidity options for direct property ownership in a traditionally illiquid asset class.

5. Transparency

Real estate crowdfunding syndicates have strict reporting guidelines, however most investors know very little about the properties in a crowdfunding portfolio or the fees applied by the manager at the property level. This information asymmetry is a concerning trend found throughout the industry. At Jasper, we provide our investors with full information and absolute clarity on every property placed on the platform. Investors are provided with all the information they need to make a prudent investment decision, all in one place.

Key takeaways

Both real estate crowdfunding and Jasper offers investors the opportunity to diversify their portfolios by putting small amounts of capital into several different commercial real estate properties. In addition, Jasper provides a transparent fee structure, undertakes careful due diligence, and has a vested interest in every property on our platform.

Ready to become an investor with Jasper? Click here to get started.

Vernon Sequeira - Jasper

Vernon Sequeira

Investment Manager

Posted on 11 Dec 2019

Invest with us

Our expertise in acquiring and managing real estate assets, combined with our proprietary technology, helps us generate strong risk-adjusted returns for a diverse range of investors.

Private Investors - Jasper Property

We make commercial real estate investment accessible to private investors in a simple and transparent way.

We provide private investors with curated opportunities, low minimums, low fees, transparent reporting and improved liquidity. All available through our secure online platform.

We manage the entire investment process for you from start to finish; you sit back and enjoy direct commercial property ownership and the passive income it can provide.

Read Important Disclosures

 Institutional Investors - Jasper Property

A strategic partner for institutional capital

Jasper is an experienced operating partner for family office and institutional investors wanting access to high-conviction real estate strategies across Australia and New Zealand. We co-invest alongside our partners in each joint venture.

We are proud of our track record and relationships with some of the biggest names in real estate, including Blackstone.

Financial Advisors - Jasper Property

Partner with us to unlock the value of commercial real estate for your clients

We make it easy for you to add commercial property investments to your clients’ portfolio mix. Contact us today to find out more.

Important Disclosures

Liquidity Not Guaranteed: Jasper offers secondary market functionality on its platform, however, there is no guarantee that you will be able to exit your investments on the secondary market or at what price an exit (if any) will be achieved.

Performance Not Guaranteed: Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this website will be profitable, or equal any corresponding indicated historical performance level(s).

Risk of Loss: Investing in commercial real estate involves a high degree of risk and may result in partial or total loss of your investment. We encourage our investors to invest carefully. We also encourage investors to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish.

No Personal Advice: Jasper does not provide personal advice or recommendations. The information provided on this website is general in nature only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. It is important for you to consider these matters and to seek appropriate legal, tax, and other professional advice before making a decision.

Wholesale Offers: Jasper currently only offers financial products to wholesale (or other qualifying) investors. Jasper does not currently hold a Managed Investment Scheme (MIS) license.

FSPR No. 692011. Information on this page is based on information available to us as of the date of posting and we do not represent that it is accurate, complete or up to date.