It's not about speculating with money or donating money, it's about investing money to make a profit. The investments mostly relate to tangible assets such as real estate objects or company investments. Financing is provided through specialized internet platforms. The most successful German crowdinvesting platform for real estate investments is operated by Hamburg-based Exporo AG. The online marketplace initiated by Simon Brunke, Björn Maronde, Julian Oertzen and Tim Bütecke at the end of 2014 has so far financed 196 real estate projects and provided 430 million euros in capital. Nearly 140 million euros have already been repaid to investors. For partial amounts this happened even earlier than contractually agreed, informs the company.
The money raised through the platform represents equity to the borrower, and the investor receives a good return on the investment risk. Of course, the return depends on the success of the funded project or company. Rights of participation in business decisions are not connected with the investor's investment. The flock financing concerns investments in land, buildings under construction and existing real estate.
The crowdinvesting idea is interesting for anyone who does not have the capital to buy their own property. So far, lucrative real estate investments have been limited to private investors or institutional investors. Exporo also opens up the real estate market to small investors, who can already invest 500 euros in first-class real estate projects and 1,000 euros in high-yield existing real estate. With the model „Exporo Finanzierung“ one invests in short-term and lucrative projects of real estate developers and profits from the project proceeds. These investments, with a term of 12 to 36 months, start at 500 euros and offer an annual interest rate of four to six percent. The other investment option is called „Exporo Bestand“. Here you invest with a sum of 1,000 euros online in existing real estate. The investor earns on the rental surpluses and the appreciation of the property and expects an annual return of between three and six percent. Exporo co-founder and CEO Simon Brunke sums it up: „We give every investor the opportunity to participate in real estate projects with little money via our online platform, thus democratizing the real estate market.“
In contrast to open real estate funds, money is used for crowd investing only for a very specific project. Interested parties can find out about all investment offers on the portals, where investors usually do not incur any administrative costs. Exporo AG describes the digitized investment process as follows: „The platforms take over the pre-selection of the projects and present new as well as already realized projects. After careful examination, only the real estate objects find their way into the public presentation, which have high chances of success. The funding focuses on new projects of developers and the revitalization of existing objects. For the developer, the financing over the crowd is very important, because otherwise he would need an expensive and lengthy bank financing. The capital of investors fulfills the function of equity for him. This mezzanine capital is a hybrid of equity and debt.“
Over 30 real estate experts inspect hundreds of properties and project developments every year for Exporo. If the platform operators from Hamburg come to a positive test result, the project developer is guaranteed a financing volume of 500,000 to 10 million euros, the payment of the money within two weeks and a professional marketing support.Exporo CEO Simon Brunke says about the rigorous selection process: „There is no shortage of applications from project developers. After our internal selection process, however, only three to five percent of the projects remain. Only the best, safest and most serious come in our offer.“ So every investor gets the chance to own a digital real estate portfolio with low minimum investments, good interest rates and high transparency.
With the presentation of the real estate projects, the interested parties are informed about all conditions, which include the funding period, in which a certain investment volume is to be achieved. The project will be realized if the funding sum is reached within the expected time. If the minimum funding threshold is missed, the promoter will extend the period, or simply take less money or return the capital to investors. However, if the funding target is achieved, platform operators will pass on the money raised to a payment service provider who will manage it in trust and transfer it to the promoter. The operator of the crowdinvesting platform regularly informs investors about the success of their investment.