Published
  • Deadline
    28.10.2020
  • Start of investment period
    01.01.1970
  • Start time
    07.10.2020 07:15
  • Asset class
    Residential
  • Investment type
    Development
  • Investment end date
    30.05.2022
  • Remaining term
    19 months
  • Expected rate of return
    13.1% p.a.
  • Expected cash yield
    %
  • No of investors
    999
  • Goal
    €900 000

Executive summary

Crowdestate investors have funded the release of Sponsor's capital in amount of EUR 1.86 million at sales period of Veskimöldre-2 residential plots. Partly the capital was used in construction of Koru basic school. To date, the Sponsor has sold or refinanced 77 plots from the initial 117 and returned EUR 1.51 million as principal and interest to Crowdestate investors. Currently the loan balance is EUR 400,000. 

Due to the growing money supply and changed interest environment, but also successful sales of Veskimöldre 2 plots, the Sponsor plans to refinance more expensive loans and first offers Crowdestate investors the opportunity to refinance previous loans (EUR 400,000) and grant an additional EUR 500,000 loan as capital release during sales period of Veskimöldre 2 residential plots. Crowdestate investors' total loan will be EUR 900,000 (minimum goal EUR 400,000). Loan is secured by a 2nd mortgage on 40 residential plots with a total area of ​​63,649 m2 and market value of EUR 4.5 million (appraised as of September 2020). 

The outstanding senior loan balance is EUR 1.4 million (obligation to bond-holders). Thus, the total amount of liabilities secured by the first and second mortgage will be EUR 2.3 millions. Total amount of liabilities per plot would be EUR 57,500 (or 36 EUR / m2). LTV of the project is 51.6% (i.e. the ratio of the principal amount of loans secured by a 1st and 2nd mortgage to the value of collateral). In addition to the mortgage, the group's parent company Brave Capital OÜ has provided a guarantee in the amount of EUR 200,000. The guarantee is not included in the value of the collateral. 

Interest rate of the new loan is 12.5% p.a. and interest will be paid quarterly and loan principal returned from the sales revenue of residential plots - 27% from the sales value (excluding VAT) of each plot will be transferred as repayment of Crowdestate investors' loan

The investment period is up to 20 monthsThe expected return (IRR) of a loan with quarterly interest payments is 13.1%.

Land sales have picked up in recent months. In August 2020, the Sponsor sold 6 plots and in September / October 7 plots as compared to an average 2 plots per months in previous periods. At the beginning of October the Sponsor refinanced liabilities of 37 plots, as a result of which EUR 464,000 were repaid to Crowdestate investors. 

The development of Veskimöldre-2 residential area includes 170 plots for single-family houses, 121 row house apartments (semi-detached house), a supermarket, dining places, health trails, schoolhouse. Residential plots prices are EUR 110,000 - 160,000 (average EUR 130,000) and average plot size is 1591 m2.

Crowdestate

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