By YOURI KEMP
Tribune Business Reporter
A BAHAMIAN realtor yesterday described crowdfunding as a “viable alternative investment” that can provide persons with access to the real estate market.
Matt Sweeting, 1oak Bahamas chief executive, told Tribune Business that data provided to him by the ArawakX platform indicates there is an appetite for crowdfunding in real estate and they were in discussions with two firms interested in testing the market.
“This is going to be a real conversation and a viable alternative investment opportunity for a lot of Bahamians, whose debt service ratio may not allow for it yet, or it doesn’t allow for it any more, because they haven’t built up the savings yet and they don’t have the kind of income that’s required yet,” Mr Sweeting said. “They may have already purchased a property that uses up a considerable amount of their debt service.
“I think, in real estate, especially as I oftentimes run into ambitious people who have already made that first purchase, but are now handicapped from doing anything else from an investment perspective, this is going to provide a tremendous opportunity for Bahamians to diversify their portfolio. This is going to be a real conversation on alternative investments that’s very sound.”
This is not a proposal aimed at enabling Bahamians to raise money to build or buy their own home via crowdfunding, but instead is an opportunity that will enable investors to buy into high-end real estate and receive dividends from those properties as income.
Mr Sweeting said: “It’s definitely an alternative investment strategy, and you want to diversify your portfolio and you want to get investments on a real estate basis. This is not for someone who is looking to buy a house and use this strategy.”
The legislative support for this is provided in the crowdfunding regulations that allowed Arawak X to operate via the Securities Industry (Business Capital) Rules 2021. Mr Sweeting said: “The legislation is there for it. It’s already supported by the legislation. It’s the same legislation that Awawak X is operating based on, and so the framework is already there.”
There will be an information session hosted by 1oak to explain all the details of its plan. Mr Sweeting is expecting Jobeth Coleby-Davis, minister for housing and transport to be in attendance, where they will “share a segment called the importance of real estate in a changing world”.
He added: “We are also in partnership with FirstCaribbean International Bank. I’m going to be speaking on a topic and going through a case study on buy now or rent forever. There will also be a panel that walks people through the entire real estate process.”