Remember last time? When you don’t have mortgage underwriters being strict with the money, you are entering bubble territory:

http://www.cnbc.com/id/102537364

Chicago-based Ben Walhood used to sell brain surgery equipment; on the side, he flipped a few houses.

“When I had the W2 and a good income, getting a mortgage was relatively straightforward,” he said.

But when the flipping profits grew, Walhood, 33, decided to go into it full time. Without the sales job, though, he had no W2, and that’s when the money dried up.  “At that point it was essentially impossible to get funding from the big banks,” he said.

Walhood turned to San-Francisco-based RealtyShares, one of a growing breed of crowdfunding platforms. Essentially, it is an online marketplace for real estate investing, where individual investors can open a free account and access investments in properties across the country. They need a minimum of $5,000 to invest and must be accredited, which includes either an annual income exceeding $200,000 or a net worth of over $1 million.

Walhood would get his property purchases funded by this “crowd” of investors, who would lend him the money. As with a mortgage, he pays interest on the loan, and the investors get about a 9 percent return. Once each property is sold, the loan and the investors are paid off.

“This gap has been left by banks that now crowdfunding platforms, like RealtyShares, are able to fill,” said Nav Athwal, CEO of RealtyShares. “They are able to provide quicker, more efficient capital that helps meet the needs of these investors who are looking for speed of execution and the ability to be flexible with their terms as well as with the underwriting standards. Banks just aren’t meeting that need.”

http://www.cnbc.com/id/102537364