A couple weeks, we took a trip to Colombia to check out one of South America’s epicenters for growth. In Medellin, we found an incredible city. The streets are clean, the public transportation is amazing, and cranes fill the skyline. Medellin has stunning topography – a city that sits in the Aburra Valley with the Andes Mountains on every side. More than three million people fill the city and surrounding suburbs.

Most people know Colombia as the source of the cocaine that flooded the U.S. in the 1980s. Many know Medellin as the hometown of Pablo Escobar, the original “narco-terrorist” who was killed in a government raid in 1993. However, soon people will know that Colombia is the home to one of the earliest and most successful real estate crowdfunding campaigns – BD Bacata. That project is located in Bogota, the capital of the country.

Below is an excerpt from my book, Equity Crowdfunding, about the project.

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The crowdfunding surge is not limited to the United States. Crowdfunding is being used even more extensively in other countries where equity crowdfunding has been legalized. In fact, the second tallest building in South America is being built right in the heart of Colombia thanks to more than 3,000 investors pooling their money online.

The BD Bacata project successfully ran its crowdfunding campaign on The Prodigy Network, a crowdfunding site focused on Latin America. The campaign took in $178 million, a crowdfunding record. And retail investors put in $35,000 each for a share of the company.

Rodrigo Niño, CEO of Prodigy, called the project “a world record in crowdfunding in real estate.” He notes that he would not have been able to fund a project this size using traditional bank funding. The reason why traditional institutions do not put money into projects like this is that construction delays are commonplace in developing countries (like Colombia), attributable to bureaucratic incompetence, labor stoppages and material shortages. Therefore having the project fully funded prevents an additional risk to the developer. Because of the worldwide crash in residential real estate, investors in the Bogotá-based project get the benefit of investing in the best performing asset in the world – commercial real estate.

According to Niño, this model can be replicated anywhere. “If you are in Argentina for example, and you want to invest say $250,000 in an income producing asset, you are limited to buying a condo in Florida. That condo will yield no more than 2 to 3% on rent, plus highly uncertain potential appreciation. There’s also the hassle of renting it, managing it, etc.”

He contrasts this with the option of crowdfunding real estate, where you may be able to purchase large commercial assets in Manhattan with the possibility of a much higher return. He expects that there will be a much larger participation in the real estate sector by equity crowdfunders. For now, only international investors from outside the United States are able to take advantage of The Prodigy Network.

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Jonathan Frutkin is CEO of Cricca Funding, LLC. He’s the author of “Equity Crowdfunding: Transforming Customers into Loyal Owners” which is available in paperback, Kindle and audio book formats.