What is real estate crowdfunding and how does it differ from a traditional real estate syndication?

Traditional real estate syndications are private placements offered directly by sponsors to accredited investors through personal relationships and networks, typically under SEC Rule 506(b) or 506(c). Online crowdfunding platforms like Fundrise, CrowdStreet, and RealtyMogul leverage internet technology and various SEC exemptions (including Regulation Crowdfunding under Title III of the JOBS Act and Regulation A+) to reach larger investor pools, sometimes including non-accredited investors. Platforms handle deal sourcing, due diligence presentation, investor communications, and distributions through a standardized online interface. Minimum investments can be as low as $500 on some platforms versus $25,000 or more in typical private syndications.