The New Way to Invest in Real Estate Starts With Emailing Rich People

Real estate fund managers Michael Episcope and David Scherer had Georgia on their minds—specifically, Atlanta. The city, part of the third-largest-gaining metro area in the U.S. last year, according to Census Bureau data, was only getting hotter. So when the co-founders of real estate investment company Origin Investments spotted an opportunity last year to purchase a 125-unit apartment complex, they jumped on it. The property’s location, in Virginia-Highland, an affluent Atlanta neighborhood that’s home to organic shops, cocktail bars, and an indie film theater, was great. Yet Episcope and Scherer had a problem. They reckoned it would take about $19 million in equity to buy the building and an adjacent undeveloped lot, but they wanted to invest only $12 million. Their solution was somewhat novel: Instead of bringing in a partner, Origin brought in dozens of them.

Origin emailed hundreds of investors with an offer to invest in the complex. Twenty-four hours later, the Chicago-based company had raised an additional $6.6 million from 39 investors and had 23 more takers on the waiting list.