The building on 7th Street that WestMill bought in the fall and is using crowdfunding to find partners for. (Courtesy of Fundrise)

Crowdfunding is gaining steam as a way to use the Internet to pool individual investors and Fundrise — the D.C. start-up — continues to demonstrate how to use it to locate aspiring commercial real estate investors.

On Wednesday morning, 130 people logged in to the company’s Web site expressing interest in buying stakes in a two-story building east of Logan Circle totaling $308,000. The company’s owners were hoping to find interest approaching the $300,000 in 30 days.

Instead, it took about two hours.

“We didn’t think it would go this fast,” said Ben Miller, who owns the investment firm WestMill Capital, with his brother Daniel.

WestMill bought the two-story brick building (using a traditional combination of cash and debt) for $852,000 in October with plans to lease it to a restaurant or retailer. Its search for interested investment partners amounts to a “test-the-waters” communication and required approval by local securities regulators and the Securities and Exchange Commission.

Traditionally such opportunities are advertised via newspaper notices and the like; Fundrise used Facebook, Twitter, LinkedIn and an e-mail list of thousands of names. “It’s not something as far as I know that anyone’s ever used over the Internet,” Miller said.

The responses are completely non-binding — no one has committed a single cent yet. But the Miller brothers (sons of local charismatic magnate Herbert S. Miller, of Western Development) tested the model once previously, on a property WestMill bought on H Street, and it took weeks to find an equal amount of interest.

The next step is to receive approval to issue a public offering for the building, something that will require lots more paperwork. Miller said if Congress would ease the regulatory process it would improve the outlook for Fundrise and other crowdfunding platforms considerably.

“To me the biggest problem isn’t so much the efficiency of it…it’s just that it’s slow. It takes months to get through the process with the regulator,” he said.

Should WestMill take on dozens or even hundreds of equity partners, a more traditional real estate question will arise: What to do with the property? D.C. residents often complain about developers who lease space to generic names (say Subway or McDonald’s) over local entrepreneurs in the name of scoring higher rents. What will local investors propose when they are the ones collecting those rents?

“The real trade-off I think between a local guy and a national [tenant] isn’t the rent…but actually the risk,” Miller said. “There is a much, much higher risk. Do people appreciate that risk? Do they understand risk? If the local guy may not survive, do they realize that they might lose?”

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz.