“I submit my offering to the SEC beforehand, and they review it and clear it,” explained Ben Miller, standing in the shell of a crowdfunded building on D.C.’s H Street NE, a transitional neighborhood on the outskirts of Capitol Hill. “We’re then allowed to let everyone invest. You don’t have to be accredited, and it really fully democratizes the investment in our city.”

Fundrise raises money from hundreds of locals, who invested on average $1,000 each. In return, the investors get an ownership share of the building, as well as a percentage of the income from rent and appreciation. They can also get perks, like discounts at merchants in the buildings. Miller is turning the H Street building into what he hopes will be a popular new restaurant, market and bar on a street where flashy new eateries and boutiques are sprouting from empty lots and boarded up buildings.

(Read more: Crowdfunding for medical devices hits Web)

“The public will help you build your real estate, but actually over time you realize that the public is an incredible partner, is an incredible asset. You democratize an investment in real estate, not only do you get capital, you actually get a social power that wasn’t possible before,” said Miller.

Now that the rules against marketing to investors are gone, Fundrise and others like it can solicit funds far more easily. Owning a part of a building can now be just a click away. In fact, the Miller brothers have already shifted the focus of their business from real estate development to a web platform that will help others use crowdfunding for real estate.

Article source: http://www.cnbc.com/id/101054808