Abstract

Crowdfunding has prospered in recent years because of regulation adjustments. It provides new opportunities for entrepreneurs and investors. This thesis presents the first-ever empirical examination of the quality of real estate crowdfunding projects and primarily addresses two questions. First, due to relatively less sophisticated small investors, herd effect, group cognitive bias, and the non-tradability of crowdfunding, real estate crowdfunding properties could be worse than other real estate properties in terms of property characteristics, leasing, and sales transactions. Empirical results indicate that real estate crowdfunding properties are not evidently worse within the metropolitan statistical area (MSA) and neighborhood, but they do fare more poorly than their comparables in sales transactions. Second, this thesis suggests that failed real estate crowdfunding projects are riskier, are managed by less qualified sponsors, and are located in less attractive areas.