Real-Estate Crowdfunding Set to Top $2.5 Billion This Year With crowdfunding, investors are able to pool their resources to buy or finance both commercial and residential real-estate investments and purchases.

Crowdfunding for real estate is already a billion-dollar industry, and it's expected to more than double this year.

That may come as a surprise. When most people think about crowdfunding, they're likely to think of a group of friends pulling their finances together to back the launch of a new indie film or a wallet made out of duct tape.

But the world of crowdfunding is a lot bigger than Kickstarter.

Across the globe, investors and homebuyers are using crowdfunding as a way to own and profit off of commercial real estate or finance the purchase of their own homes. Real-estate crowdfunding was a $1 billion industry in 2014 and is expected to grow to more than $2.5 billion this year, according to a report released today from industry research firm Massolution. In 2014, campaigns ranged in size from less than $100,000 to over $25 million.

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While still emerging, the real-estate crowdfunding industry is growing quickly. To date, there are 85 real-estate crowdfunding platforms currently in operation, according to Massolution.

Investors are using real-estate crowdfunding as an alternative way to invest money they are looking to make money with. For example, on platforms such as Realty Mogul, many investors pool their money to buy a commercial real-estate investment with the expectation that the rate of return on their investment will be higher, with less risk, than other typical investment alternatives.

The benefit of real-estate equity crowdfunding over real estate investment trusts, or REITs, which have already been around for two decades now, is speed and diversity. "Technology allows this activity to be conducted more swiftly and more efficiently, availing the investment opportunity to more participants," the report says.

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Crowdfunding for commercial and industrial investments is growing faster than it is for residential or multi-family real estate investments, according to the report. Still, crowdfunding is being used as an alternative finance method to a mortgage from a bank for individuals looking to move into their first home. And there is significant potential in this sliver of the real-estate crowdfunding market.

"Residential crowdfunding has the breakout potential, as mortgage loan origination, a trillion dollar market, is opening up to distributed platform financing," the report says. One example of residential real estate crowdfunding is LendInvest, a platform out of the U.K. that did $240 million worth of residential mortgage loan initiations last year.