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Crowdfunded Real Estate And Why Shanghai Will Become The Financial Hub Of The World

  • Given recent market turbulence, real estate investment is gaining traction, especially with Chinese investors.
  • Wealth Migrate CEO Scott Picken says Shanghai will become the financial hub of the world.
  • Real estate crowdfunding platform, Wealth Migrate, is poised to take advantage.
  • Scott Picken, CEO of real estate crowdfunding platform Wealth Migrate, said his company is betting on middle class Chinese investors and their keen interest in U.S. real estate. To that end, Wealth Migrate just opened an office in Shanghai.

    In part one of a two-part interview with Benzinga, Picken talked about the growing attractiveness of crowd-funded real estate, as well as some of the reasons Chinese investors are jumping on that bandwagon.

    Related Link: Wealth Migrate Opens Office in Shanghai, China

    Benzinga: What makes real estate a particularly attractive investment?

    Scott Picken: Real estate is simple, easy to understand and tangible.

    In challenging times, it’s all about common sense. For example, we invest heavily in medical buildings. During economic downturns, doctors still are required. They don't go out of business; they sign long-term leases, so you've got very stable tenants.

    Another factor is “worst case scenario.” People say, “How bad could it get?” Living on the tip of Africa, I think we've actually had a window into the worst-case scenario.

    Zimbabwe in 1999 was the best performing economy in Africa. In 2001, it was the worst performing economy in the world.

    Real estate, specifically residential real estate, was the most valuable asset there was in the entire country, because people still need [somewhere] to live.

    Whether you just want to use common sense or to be dramatic and look at worst case scenario, in both examples, real estate has come through as safe, based on actual facts and not just sentiment.

    BZ: What inspired you to get involved in crowdfunding of real estate?

    SP: I always believed technology would revolutionize real estate, that it would come into a very old historic industry, enhance the process and create far better value for people.

    For me, the catalytic event was actually one of personal greed. In 2008, right after the financial crisis while living in Wimbledon (London), I was offered (a number of) new fully built, fully furnished, fully tenanted apartments for £160,000 to 180,000 each. Three months before the crisis, they had sold for £320,000 each.

    I only had one little problem. How to raise 10 million pounds. I ran around South Africa primarily, but also around the world. We couldn't do it. Just couldn't do it.