CNBC by Diana Olick | September 23, 2013

Real estate is one of many industries that are capitalizing on crowdfunding. Source: Getty Images

It's worked for films, political candidates and disaster relief, so why not real estate? Crowdfunding, the act of soliciting funds from the public, most recently via the Internet, is already a powerful tool, but, until today, was difficult to do in real estate.

Developers were restricted from marketing projects to the public. Real estate finance was largely limited to high net worth investors and private equity firms.

Today, that restriction disappears, thanks to the Jumpstart Our Business Startups Act, or JOBS, passed in April 2012. Now developers can advertise and market their projects to so-called, "accredited" investors, or those with a net worth of at least $1 million and an annual income of at least $200,000.

It's exactly what Washington native Ben Miller has been waiting for. He and his brother Dan founded Fundrise, a company that facilitates crowdfunding for local real estate development. The brothers actually started two years ago, wrangling through a little-known exemption in regulations. They found Regulation A, which allowed them to market to unaccredited investors, as long as those investors were local and could utilize the projects themselves. It was very complex and limited, but it was a start.

Related: Canadian Crowdfunding Portal Directory

"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.

"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.

Related: Crowdfunding real estate catching on: The concept allows small investors to invest in their neighbourhoods

"We've launched now with 50 developers around the country. We're in 16 cities, and the developers are doing all kinds of offerings, all kinds of real estate, urban small towns, skyscrapers, it's really a new form of fundraising, a new form of partnership with neighborhoods," said Miller.

Fundrise is not alone and not the only company that will now benefit from eased regulations. Prodigy network, which raised millions of dollars in small increments to fund a skyscraper in Bogota, Colombia, has now set its sights on a project in Manhattan.

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