A major shift in the American investment landscape has just taken place. Earlier this week, new federal regulations went into effect, opening the door for millions of Americans to invest in a wide variety of companies and projects. 

In short, crowdfunding for the little guy has arrived.

While North Carolina legislators ponder the possibilities of creating the state’s own small-investor crowdfunding law, enactment of the federal SEC regulation that permits so-called non-accredited investors to participate in capital raises means that there is a whole smorgasbord of opportunity – and risk – for the non-accredited investor, defined as a person with less than $200,000 in annual income.

Accredited investors – those with individual incomes of at least $200,000 per year or $300,000 per year as a married couple – have been helping to crowdfund investments since Title II of the JOBS Act went into effect in September 2013.

Taking advantage of that enabling legislation, Wilmington-based Connected Investors operates as an aggregator of real estate crowdfunding sites, providing one web portal for accredited investors to browse for opportunities and connect with other such investors.

Connected Investors’ CEO Ross Hamilton sees admission of the unaccredited investor under the U.S. JOBS Act’s new Title III section, which went into effect May 16, as a good thing. 

“I’m excited to think the everyday investor gets an opportunity,” he said recently about the new rules. “That everyday person can influence real estate development in their town, or the town could buy in to a commercial development.”

And that’s exactly what Clark Henry and Clark Hipp have in mind. Henry, an urban planner, and Hipp, an architect, share not only an office space in downtown Wilmington but a vision of how crowdfunding could shape communities. 

Now they also are partners in Our Move, a business entity that is newly incorporated and registered with the Financial Industry Regulatory Authority so it can offer crowdfunding real estate investments.

But there’s more to their vision than a simple ROI. Our Move aims to turn problem properties into profitable properties, using the company’s crowdfunding abilities.

“Clark [Henry] and I have a strong background in community development,” Hipp said. “We see opportunities for community funding, and we have felt that there’s a market of underserved, community-minded investors.”

Crowdfunding is a new tool for small-scale projects that wouldn’t necessarily meet conditions a large financial institution would impose for financing, Hipp said, adding that these projects also might not be attractive to big developers. 

“Crowdfunding is a way for little developers in towns to assemble financial and community support,” Henry said.

Hipp offered an example.

“Let’s say there’s a problem property downtown,” he said. “A group of interested parties, be they developers or designers, put together a [financial] pro forma to purchase and redevelop the property into a profitable endeavor – maybe a coffee shop. It should not be a nonprofit; you want to see increased tax value. And there’s an agreement in advance to purchase [the resulting improved property]. These are things Our Move would need to see: social and financial benefits.

“We’re trying to marry local impact with financial impact,” Hipp continued, explaining that the 200 or so investors in preparing that property for a coffee shop would have a stake in making the project successful and would probably become loyal customers once it was opened.

Our Move will provide services for a proposed project, starting with finding additional investors.

“We will focus on hyper-local … reaching people within a one- to two-mile radius of the property to see if they want to get involved,” Hipp said.

Henry said that organizing local crowdfunding around a local project is one way to turn a potential “Not In My Back Yard” situation into a positive.

“What would [neighbors] support?” he said. “There is a thirst and completely unmet demand for people to participate.”

Once the funding is complete, Our Move would provide services, drawing on Henry’s expertise in organizing community projects and urban planning as well as Hipp’s expertise in siting and design.

Are Henry and Hipp hopeful that North Carolina will pass its own crowdfunding-enabling legislation, currently part of an economic development bill before state lawmakers?  

“It would be good if the North Carolina legislature passes something, but our focus is on Title III because we have our sights set on the national market,” Henry said. “Through our web presence we will provide links to investment opportunities and best practices. We will develop a network nationally across subject matter for nonprofit and for-profit [investors] engaged in community building and help them build local capacity and expertise.

“We would like Our Move to become a way that cities that lack organizational capacity create a vision and acquire properties,” Henry said. “We would like to help them.”

Using its website, Our Move will provide opportunities for investors with a particular focus, such as food deserts, to look at opportunities everywhere, Hipp explained.

“We see this as almost another industry, and our goal is to be a leader in that realm – to be the go-to tool for community-minded development, like Habitat for Humanity,” he said.

Kickstarter has proved that unrelated small investors can converge to make a project happen, the partners said.

Hipp says Our Move has talked with potential investors locally, but the biggest hurdle to the company’s start up is finding the right kind of project: one that’s financially viable, small enough to work, and in an affordable secondary location.

Such a location in Wilmington could be along Market Street in Ogden, on Castle Street or North Fourth Street downtown, or somewhere on Kerr Avenue, the partners said, while noting that although each project Our Move takes on will likely be hyper-local, project selection standards and the process itself would need to be replicable anywhere.

“It’s the Internet coming to real estate development,” Hipp said. “Of the U.S. population, 3 percent are accredited investors, and 8 percent of those people actually invest. With the change that comes with Title III, now 100 percent can be investors.”