The $1.6 million Mainstreet recently finished raising from www.BuildMainStreet.com, a site created with CrowdStreet's help, came from such accredited investors kicking in investments ranging from $10,000 to more than $250,000. The total represents a US record for crowdfunding from accredited investors in health care real estate, senior living and ground-up development properties, White says.

“We could have raised all the financing needed through crowdfunding,” he adds. But since investors usually want the sponsor to have some skin in the game, Mainstreet also directly provided about $1.5 million, which, added to the crowdsourced funds, completed the financing needed for the Bloomington project.

For Mainstreet, the technique not only diversifies its funding sources, it also helps build the company brand by getting its name in front of a far greater number of people.

“When we tell our story, people get it and really want to invest,” White adds. “Everybody knows somebody who has been in a nursing home,” and understands the need to replace the nation's nursing homes, many of which are more than 40 years old, with new facilities that will also create jobs and pay taxes.

And from now on, crowdfunding “will become part of our toolbox in how we raise capital,” he says. However, Mainstreet is also trying to learn lessons from this latest round of fundraising. In the future, for example, the company may have investors put money into a group of projects, rather than the more time-consuming process of doing it one at a time. “That is something we are seriously considering.” The company currently has 17 projects underway, and next year expects to have about 35 under construction.

“Crowdfunding is in a very early stage,” White admits, but he has been asked to speak about it at several upcoming conferences. “I think it is a budding topic that people are trying to figure out; it's at that tipping point.”