ReVEST

A Crowd Funded Equity Prototype

ReVest aims to democratize the project financing process. Using the Title III of the JOBS Act, otherwise known as Regulation CF, non-accredited investors are allowed to provide capital in exchange for project equity. To achieve this, we created a fractional share investment platform in which a non-accredited investors can provide up to 5% of the allocated equity financing.

The goal is to prioritize investors that are already part of the existing rental market. Through this platform they are allowed to have a stake in the appreciation of their neighborhood. Thus, even as the community of a neighborhood may shift, those who initially put in the sweat equity can share in its monetary value.

Project Information

Project Type: Product Design

Professor: Michael Caton

Partner: Jennah Jones

Mission Statement

We aim to disrupt the existing development value chain and create a virtuous cycle by making the Bronx community members equity investors in the development of their neighborhood.

Existing Real Estate Development Value Chain

Proposed Real Estate Development Value Chain

The Facts: Bronx, NY

Fighting an Uphill Battle

In order to mitigate the risk of a real estate investment, the SEC has created an investment class named the Accredited Investor. Under Regulation D, the Accredited Investor are financially sophisticated and have a reduced need for the protection provided by regulatory disclosure filing Although Regulation D helps mitigate risk, it also has an adverse effect by excluding those who do not make an annual income of $200,000 or have a total asset valuation of $1,000,000.

The community members of The Melrose District in the Bronx have an average household income of $22,700. Far from the ability to classify as an Accredited Investor, the dreams of obtaining equity in real estate are far from a reality.

The chart below reflects the gentrification of a Bronx neighborhood. As the neighborhoods property value appreciates, we see each actor has a very different relationship to the real estate market. Our goal is to allow those who created the foundation of a neighborhood to attain equity in the appreciation of its real estate.

Process

Interviewing a Community Leader

After visiting the site, we ran into a neighborhood resident and community leader Marty. Marty has spent his whole life in the Bronx and continues to observe the changing demographics on its periphery.

With the gentrification beginning to spread north across the Harlem River into the Bronx, Marty has witnessed one of two scenario’s. The first is when his neighbors that are fortunate enough to own land decide to sell their appreciating real estate, cash out, but leave a culture vacuum. The second scenario is scenario is where a family gets displaced. Through talking with Marty, we learned many residents believe and participate in the movement originally created by activist Yolanda Garcia, Nos Quedamos/We Stay.

“Developers need to build around locals. Architects and City Developers needed to address the community needs or the community might not end up cooperating”

Product Details

How Equity is Shared

ReVest aims to democratize the project financing process. Using the Title III of the JOBS Act, otherwise known as Regulation CF, non-accredited investors are allowed to provide capital in exchange for project equity. To achieve this, we created a fractional share investment platform in which a non-accredited investors can provide up to 5% of the allocated equity financing.

The goal is to prioritize investors that are already part of the existing rental market. Through this platform they are allowed to have a stake in the appreciation of their neighborhood. Thus, even as the community of a neighborhood may shift, those who initially put in the sweat equity can share in its monetary value.