How can I use crowdfunding to raise funds for my QOF?
Crowdfunding is doable, but it'll be securities law that poses the most issues and costs. From a tax law point of view, it should work out fine. Several platforms crowdfund for non-QOZ real estate, so the legal and tax structures have been contemplated before.
You need to use a Securities exemption that allows crowdfunding, such as Regulation D, Rule 506(c), Regulation CF, or Regulation A+.
Any crowdfunding site such as StartEngine.com or WeFunder.com could be used to market a Reg CF offering or a Reg A, or Reg D offering to raise funds. In the current challenging environment to raise funds with Covid-19 ongoing, I would encourage establishing raise offerings on such platforms.
There are a few services that will help you set up a QOF that will allow for crowdfunding. Please make sure you do your homework. However, as there are a lot of regulatory considerations, crowdfunding is not as easy as it may seem.
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