The benefits of a vertically integrated real estate crowdfunding platform are so many Craig Cecilio wonders why more companies aren’t doing it.
Mr. Cecilio is the CEO of DiversyFund, a company offering shares in private real estate with targeted returns of 9-18 per cent. Because it developed and manages its projects in-house, DiversyFund does not charge its users investment fees. Since its incorporation in August of 2016 DiversyFund has amassed more than $100 million in assets under management.
Right place, right time
It began as a case of right place, right time, Mr. Cecilio admitted. He moved to San Diego in 1997 and started growing his network of developers, syndicators and realtors. Success soon came, as Mr. Cecilio proved adept at bringing people together to fund projects.
“That caught my eye,” he recalled. “Either make money for your own project or make money on someone else’s.”
Those networking skills paid off, for when he decided to start his own company Mr. Cecilio had a large database of contacts to reach out to.
“In 2013 I read about crowdfunding and syndication and said to myself ‘this is what I’ve been doing’,” he said. “It was a natural fit, aggregating people and collecting names. Using technology was a natural fit too. It’s hard to solicit capital from people in all 50 states…
“I remember thinking this is a home run, and I know how to do this.”
Company stands out
A vertically run real estate crowdfunding company stands out in an industry notorious for opacity. Direct ownership makes it easier to be transparent about all aspects of the deal from ownership to timelines, Mr. Cecilio said. In one instance he was able to sell a property that was still under construction.
“If you’re a third party, you have no control or flexibility like that,” Mr. Cecilio said.
DiversyFund has quickly gained traction thanks to a combination of that network, but also selected media coverage, social media campaigns and strong analytics.
And DiversifyFund’s not resting, Mr. Cecilio added. They are looking to introduce aspects of artificial intelligence which brings reduced marketing costs through better targeting and efficient customer education.
DiversyFund often works with gifted architects who can introduce a new style into an area, Mr. Cecilio said. That works for both new properties and revitalization efforts.
“Of course we want to make money, but we also look to see if we can redevelop an area in a neighbourhood,” Mr. Cecilio said. “We can help with transitions, new design concepts.
“One home in La Jolla is just an amazing site. The designer is bringing something to the area it’s never had.”
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