What are expected returns on my real estate investments?
You can earn money from real estate investments either through regular rental income or real estate appreciation.
Different types of real estate investments have different return expectations, depending on both rental income as well as underlying real estate appreciation.
Commercial real estate might have a net yield of 6 - 9%, while residential real estate might have a net yield of 3 - 4% annually.
Real estate developments have much higher return expectations, but so are the accompanying risks.
Real estate prices are hard to predict, but real estate values have a historically high correlation with inflation and wage growth.
You will find Crowdestate’s financial models and return expectations attached to all our investment opportunities. At the same time, those models reflect Crowdestate’s views and they can not be treated as promises or guarantees. All investment decisions made by Crowdestate’s members should be based on personal views and preferences.
How is the earned income distributed to investors?
Any income earned from the real estate property is divided proportionally between the participating investors.
Distributed income is credited to Crowdestate members’ investment accounts, where the members have a choice of reinvesting or withdrawing the funds.
Why do you use credit contracts and not something else?
Crowdestate has carried out a thorough analysis to find the most efficient funding model for its investors.
One of the specific features of crowdfunding is the fact, that hundreds and thousands investors could be participating in one single investment opportunity. Equity-based model would fall under the regulation of Securities Market Act and such a crowdfunding campaign would be considered a public issue of securities, which is extremely complex, time consuming and expensive.
Therefore we have decided to use specific, project profitability-related credit contracts, where interest income is generated from real estate income streams.
The loans are redeemed by returning the principal amounts first, and leaving interests to the latter part of the investment period. This allows for the postposing of potential income tax obligations.
The exit revenue earned at the end of the investment period is paid out as an interest payment.
Crowdestate’s funding model and setup ensures investors rights to real estate revenue are equal with the direct ownership, at the same time postponing the income tax obligation to future.
How should I pick a specific investment opportunity?
Crowdestate publishes different real estate, business, and mortgage loan investment opportunities with different risk profiles, time horizons and expected returns.
Each Crowdestate’s member is free to decide what kind of investment opportunities are the best suited to his investment objectives, investment horizon, and risk tolerance.
How are the investments exited?
Each of our investment opportunity has a specific exit condition. In most cases, it is a specific date somewhere in the future.
Technically, we might use a “30% increase in price” as an exit condition - in such case, the investment is sold immediately if its sales price exceeds the acquisition price by 30%.
For instance, real estate development projects are ending with the sale of the property.
Investment minimum and maximum amount
The minimum amount of any single investment is usually EUR 100,00 (one hundred euros), and investments can be made with 100 euro intervals (i.e 100, 200, 500, 1000 euros etc).
Any new investment opportunity opens with a 24 hour prebooking period. This is a period where one investor can make one investment order within the preferred maximum investment amounts. The final investment amount will be determined by the number of prebooking investors. It will remain between 100€ and your submitted maximum investment amount.
Read more about the prebooking system: https://blog.crowdestate.eu/en/2018/new-prebooking-system/
How do I invest?
You should be a registered user to gain access to our investment opportunities. Before investing, you are expected to provide us with necessary information and confirmations required by the law.
Can Crowdestate make an investment order for me?
The short answer is: No
Making an investment on Crowdestate platform is only possible if the user has available funds on their investment account. If there are no available funds on the account, or the transferred funds would not reach the account in time, Crowdestate has no technical way to book any amount for any user nor to make an investment order on behalf of a user.
Investments can only be made in the amount of funds available on the investment account at the time of the project.
For security reasons only the actual owner of the investment account can make investments on the platform. Just like no-one else could use your bank account to make transfers, no other person can make actions with any user's investment account - unless the user has granted access to the specific person to their investment account. But it is important to understand that the SMS code that is required to confirm the investment order will only arrive to the mobile phone listed on the investment account.
What happens after making an investment?
Nothing very significant happens. An investment portfolio with the loan agreement that is tied to the investment (both parties are included in this agreement) will appear on your account. After this, you only have to wait for the end of the project. After the end of the project, the sum that you invested plus the interest income will be returned to you.
Investors do not have to pay fees for investing.
How can I terminate a loan agreement?
It is not possible to terminate a loan agreement. By investing into the project, you entered into an agreement with us.
However, it is possible to sell your investment on the marketplace.
What does it mean when a project has the status ‘Pending settlement’?
To protect investors, Crowdestate does not transfer funds to the project’s Sponsor until everything regarding the documents is 100% in order. The status ‘Pending settlement’ indicates that some of the details still need confirmation.