What is crowdfunding ?
Watch this video:
Types of crowdfunding
Types of crowdfunding
There are many different types of crowdfunding. In practice, a distinction is currently made between four main crowdfunding models:
- Donation-based crowdfunding: the public donate money to a specific project within a set timeframe, without receiving anything in return.
- Rewards-based crowdfunding: backers receive a symbolic non-monetary reward, such as a mention in the credits of the film they have helped to finance or a personal item from the artist they supported.
- Loan-based crowdfunding (crowd lending): backers are promised repayment, with or without interest.
- Crowd investing: backers receive a stake (usually part ownership) in the financed projects future profits, or equity or debt instruments if the investment involves securities.
Crowd lending and crowd investing both aim to generate financial returns. That said, crowdfunding platforms and projects do not always fit neatly into one single model. Therefore, attention of the supervisory authorities is focused on crowd lending and crowd investing.
At Immo-Fund we have focused on crowd lending by structuring our fixed income product “we invest”.
For more information you can visit the website of the BaFin (Federal Financial Supervisory Authority) which is also a main source for the info provided above.
Investments in lucrative real estate development projects and rental properties
At Immo-Fund investors have the chance to create their own real estate investment portfolio based on debt or preferred equity in opportunities that were historically only available to a handful of institutions and high net worth individuals.
Through participation in the form of purchase of a financial instrument that commits the developer to repay principal and fixed annual interest at the end of the project (usually 18-24 months), our users have the opportunity to become investors in large real estate development projects. Projects that would otherwise be unavailable to them as a source of income.
We are currently working to create a form of insurance for our clients that will enable them to receive their investment with the profit included at the maturity date, even if the developer is not ready to pay, no matter the reason. Please contact us if you need more information on this.
We conduct detailed analysis on the project by evaluating all pros and cons from architectural and construction viewpoint as well as from business perspective with all variables included in the equation (market analysis, marketing plan, selection of subcontractors and quality control).
Our rating embeds the likelihood of each project to be successful, taking into account all the risks associated with its implementation and realization. The rating is based on our patent pending Prime Risk-Security Model developed by applying our team’s professional experience and impartial assessment.
The projects offered on our platform are characterized by a certain rating. The rating itself is based on the experience of the developer, financial and credit history of the entity and success rate with previous projects.
We use a full market approach when building the portfolio of projects on the Immo-Fund platform by encouraging fair competition between entrepreneurs. Immo-Fund offers structured technical projects, as well as increasingly attractive financial parameters that correspond to the level of risk implied.
5 STEPS APPROACH
Earning from the real estate market in few easy steps
Create an account
Creating an account at Immo-Fund is free and enables you to access real estate investment opportunities pre-vetted by our team. You will benefit from a low minimum investment requirement, starting at only €500. This is compared to standard minimum lots of €50k – €100k for traditional real estate investments.
Review the projects
For every investment opportunity on our website, you receive detailed information including property and location reports and analysis, professional expertise on the projects, extensive information about the investment product including estimated length of the investment and estimated annual return as well as a profile for any companies or individuals involved in the investment.
Invest in crowdfunded real estate projects online. Select your desired investment amount and state your desire to become part of a certain project. Our team will contact you with further details in order to secure the deal in a safe and convenient way. You can further your portfolio by creating a mix of investments from the variety of real estate opportunities going from residential apartment buildings up to big commercial mix-use establishments.
Once a fundraising campaign is complete, you can monitor the progress of your investments thanks to Immo-Fund feedback system through email notifications on significant project events. List of expenses, status updates, monthly photos and video updates will be available to investors in that project.
The crowdfunding platform offers its clients a full spectrum of services and covers all three main sub-categories of crowdfunding projects and translates them for the real estate market.
“we invest” depicts lending-based crowdfunding (crowdlending). Upon maturity, your invested capital plus attractive interest earned is paid to you. Our legal and corporate structure provides significant opportunities for higher yield returns.
Most real estate developers prefer to use mezzanine capital for the funding of their projects as replacement for equity capital or bank loans. This form of participation gives investors the opportunity to participate in the development’s success. At Immo-Fund, small private investors and companies can choose to invest in new property developments or to reinvest in existing and long running projects which generate on-going revenue. In the first option investors receive the reimbursement with interest of their invested capital at a maturity date. In the second option investors usually commit their capital for longer terms and receive interest payments during the whole period of the investment with a final principle repayment at the maturity date. All of these loans are mezzanine capital in the form of a subordinated loan which must be repaid by the debtor.
Learn more about mezzanine financing trough the following video:
At Immo-Fund interested investors will have the opportunity to acquire shares in real estate development projects before or after the construction period. As shareholders, the investors will be entitled to receive rental yields or part of the proceeds from the sales of finished properties.
The risk by owning company shares is greater than the risk of being a debtor. However, the liability that may occur in case of project default is limited to the amount of the investment. Some of the value if not the whole value may be recovered after refinancing of the project or after a liquidation has been initiated and all assets are sold to another investor.
With the equity based instrument “we participate” the dividend yield at the end of the project may greatly surpass the average returns in â€œwe investâ€ which are around 8-10%. Often shareholders in such projects benefit from annual yields around 12% to 18% .
We diversify the risk for our investors by offering regular feedback on the project, calculated custom KPIs and 3rd party professional opinion on the development process.
Our investors receive a part in the realized profits from the real estate development process according to their share in the project and benefit from the potential increase in value of the property (asset in the company balance sheet), hence generate even bigger margin in case of future sales.
To better understand the structure within which you may invest, watch carefully the following video regarding Special Purpose Vehicles (SPV):