On September 29th, Japan's Ministry of Land, Infrastructure, Transport, and Tourism (MLIT) unveiled new Practical Guidelines for Real Estate Specific Joint Ventures Utilizing Crowdfunding.
Key Takeaways:
Real estate crowdfunding activity surged in FY 2022, with 419 cases and 60.4 billion yen in investments.
The guidelines aim to ensure proper business management and investor protection under the Act on Specified Joint Venture Real Estate Ventures.
The guidelines provide practical insights on organizational structures, risk mitigation, and marketing strategies for successful crowdfunding operations.
The objective behind this publication is to support businesses with limited experience in real estate crowdfunding and encourage the responsible practice of investor protection and risk management, ultimately promoting the utilization of crowdfunding property.
In FY 2022, real estate crowdfunding under the Act on Specified Joint Real Estate Ventures saw significant growth, with 419 cases (approximately 1.85 times the previous year) and a total investment amount of around 60.4 billion yen (approximately 2.61 times the previous year).
These funds have been widely used for purposes such as the renovation and revitalization of aging facilities and real estate investment in local regions.
The guidelines provide a comprehensive explanation of the organizational structure, management system, and other necessary components for implementing real estate crowdfunding at each practical phase.
They also outline potential business risks, factors leading to complications, necessary precautions, and key considerations, using illustrative diagrams.
Additionally, the guidelines offer insights into marketing strategies, innovations, and best practices to achieve success in real estate CF operations.
The guidelines are published in Japanese only.
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