The Evolution of Real Estate Investing with Dr. Adam Gower

In this episode of Multiple Perspectives, host David Lofgren welcomes Dr. Adam Gower, author, educator, and founder of the GowerCrowd.

Join them as they discuss:

The historical context of capital raising in the early 20th century
Implications of the Securities Act of 1933
Enactment Jobs Act in 2012
Examined the unintended consequences of the Jobs Act
Explosive growth of crowdfunding in 2020
Importance of education in the crowdfunding space
Future of crowdfunding in real estate

Dr. Adam Gower is an author, educator, thought leader, and the founder of GowerCrowd, specializing in the intersection of crowdfunding and commercial real estate investing. With a rich background in finance and real estate, he has become a prominent voice in the crowdfunding space, particularly through his latest book, *Real Estate Crowdfunding Unleashed*, where he argues that crowdfunding has revolutionized the commercial real estate industry. Dr. Gower's insights are particularly relevant in understanding the rapid growth of crowdfunding, especially during economic downturns, as he highlights its resilience and potential as a mainstream investment alternative. His previous work, *Leaders of the Crowd*, further cements his authority in the field, making him a key figure in discussions about the future of real estate investment.

Episode Highlights:

02:50 - The Wild West of Early Capital Raising: Dr. Gower discusses the chaotic landscape of capital raising in the early 20th century, likening it to a "wild west" scenario. He explains how the lack of regulations allowed individuals, particularly railroad barons, to raise funds from the general public without any oversight. This unrestricted access ultimately led to the hyperinflation and the catastrophic stock market crash of 1929.
10:16 - The Jobs Act: A Turning Point for Crowdfunding: Dr. Gower discussed the pivotal moment in 2012 when the Jobs Act was passed, marking a significant shift in the investment landscape. He explains that this legislation was initially aimed at small businesses but inadvertently opened the floodgates for real estate crowdfunding.
20:30 - The Rise of Education in Crowdfunding: Dr. Gower highlights the early days of crowdfunding, where platforms initially struggled to attract both investors and sponsors. He notes that the realization that education was key to success transformed the industry. By providing educational content about crowdfunding, investment strategies, and real estate concepts, platforms were able to build trust and attract a wider audience.
25:46 - Explosive Growth During Economic Downturns: Dr. Gower reveals that real estate crowdfunding investments surged from $7 billion in 2019 to $15 billion in 2020, despite the economic challenges posed by the pandemic. This remarkable growth occurred while traditional capital formation in real estate declined by 6%. He attributes this trend to a growing pool of accredited investors seeking stability and yield in a volatile market, demonstrating that crowdfunding has become a resilient alternative for both sponsors and investors during economic downturns.
29:19 - Crowdfunding as a Counter-Cyclical Investment: Dr. Gower emphasizes the counter-cyclical nature of crowdfunding in real estate, explaining how it provides a viable option for investors during economic uncertainty. He discusses how, in times of market volatility, investors are drawn to real estate as a means of diversification and stability.
30:06 - The Future of Real Estate Crowdfunding: Dr. Gower reflects on the future of crowdfunding in real estate, emphasizing its potential to reshape the investment landscape. He envisions a more inclusive market where diverse investors can access opportunities that align with their financial goals.

Episode Resources:

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Dr. Adam Gower on LinkedIn
GowerCrowd Website