Sustainability and Real Estate Crowdfunding: Success Factors
Abstract
:1. Introduction
2. Background and Principal Platforms in Europe
2.1. Theoretical Background
2.1.1. Equity Crowdfunding
2.1.2. Lending Crowdfunding
2.2. Principal Platforms in Europe
3. Materials and Methods
3.1. Housers Platform
3.2. Data Collection
3.3. Econometric Approach
4. Results
5. Conclusions and Discussion
5.1. Theoretical and Practical Implications
5.2. Limits and Future Research Direction
Author Contributions
Funding
Conflicts of Interest
References
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Platform | Country | How It Works | Minimum Amount for Investment |
---|---|---|---|
Reinvest24 | Estonia | Reinvest24 allows the purchase of housing or business shares. One makes a deposit on the platform and can invest in all properties in different countries, creating a diversified investment portfolio. There are no limits on the investment period. It is possible to leave the project at any time by selling the shares. https://www.reinvest24.com/en | 100 EUR |
EstateGuru | Estonia | EstateGuru invests in pre-valued, short-term, property-backed loans in Europe—still one of the safest investment types in time. It offers real estate development loans as well as bridge loans and business loans. https://estateguru.co/ | 50 EUR |
EvoEstate.com | Estonia | EvoEstate.com brings together projects from different platforms. The types of deals are: Rent (like having a little share of real estate); fixed-interest loans (users become like financial institutions, providing financing for real estate development companies; equity (this is the highest-risk investment, but also the one with the highest return, since customers become co-owners of the business). https://evoestate.com/ | --- |
Property Partner | UK | PropertyPartner allows users to invest in three ways: Build their own investment (the team of property experts chooses the best investment opportunities and makes them available in the platform; investment plans (users can create a diversified real estate portfolio, choosing from three investment plans, each with a different return profile, set the investment amount (from 5000 GBP), and watch their portfolio grow; premium services (for users who want a more personalized service and have over 25,000 GBP to invest. https://www.propertypartner.co/ | 1000 GBP |
IFunded | Germany | IFunded has Financing Tranches: Senior Debt, Mezzanine Debt, Total Financial Solutions. Project Phase: Development, Existing Property, Renovation Financing: All asset types. Terms: 12–48 months. Volume: Up to 50 million euros. https://ifunded.de/en/ | 250 EUR |
Crowdestate | Estonia | Crowdestate aims to provide a complete capital stack, from senior loans to mezzanine debt to equity. It offers investment opportunities in high-quality, pre-vetted mortgage, commercial, and real estate loans. It has a secondary market where it sells its loans. https://crowdestate.eu/en/home | 100 EUR |
Bulkestate | Latvia | Bulkestate enables investment in loans to develop the property or to participate in the purchase of apartments in groups. The main difference is a combination of loan and group purchase services. It provides an efficient solution if the initial loan agreements fail and the real estate mortgage must be foreclosed upon and sold. https://www.bulkestate.com/en/ | 50 EUR |
CrowdProperty | UK | CrowdProperty is a peer-to-peer lending business that deals exclusively with debt. Each pledge will be a loan for the project as specified by the developer, and the returns will be in the form of interest on the borrowed capital. It specializes in bridge loans and property development loans with a low loan-to-value ratio. https://www.crowdproperty.com/ | 500 GBP |
CapitalRise | UK | CapitalRise is an online crowdfunding platform that allows eligible customers to acquire property-backed securities to finance high-quality real estate secured loans. There are two main types of investment products to choose from: Debt and equity. Debt products are credits issued to property promoters who normally pay a fixed annual interest rate/yield and are guaranteed by a legal fee on the property and/or a personal guarantee from the promoter. Equity products are funds granted to developers that typically do not have a fixed return rate and are often classified as the last funds to be repaid upon exit from the investment. https://www.capitalrise.com/ | 1000 GBP |
Rendity | Austria | Rendity is an innovative Fintech Startup located in Vienna (Austria), which has developed a platform that enables users to invest in high-quality real estate projects through collaborative investment. It offers two investment options: Development projects (return up to 7.5% per year, duration 12 to 36 months, planned distribution at the end) and rental projects (return up to 4% per year, duration 3 to 7 years, resale after 24 months, quarterly distribution). https://rendity.com/ | 1000 € |
Variable | Description |
---|---|
Dependent variable | |
Amountraised | Raised funding amount (EUR) |
Investors | Number of individuals who contributed to the campaign |
Independent variable | |
Typedum | =1 if it is a buy-to-sell project; =0 if it is a development loan project |
Riskdum1 | =1 if the project has level of risk C; =0 if the project has level of risk A or B |
Riskdum2 | =1 if the project has level of risk D, E, or F; =0 if the project has level of risk A or B |
Totalreturn | Total return of the project |
Term | Term of the project (in months) |
Variable | Mean | Standard Deviation | Min | Max |
---|---|---|---|---|
Amountraised | 430,673.3 | 285,424.9 | 100,000 | 1,300,000 |
Investors | 610.4 | 331.6 | 131 | 1484 |
Typedum | 0.37 | 0.49 | 0 | 1 |
Riskdum1 | 0.45 | 0.50 | 0 | 1 |
Riskdum2 | 0.45 | 0.50 | 0 | 1 |
Totalreturn | 0.09 | 0.04 | 0.05 | 0.22 |
Term | 14.57 | 9.61 | 6 | 60 |
Correlations | TYPEDUM | RISKDUM1 | RISKDUM2 | TOTALRETURN | TERM | VIF |
---|---|---|---|---|---|---|
Typedum | 1.0000 | 2.0741 | ||||
Riskdum1 | 0.6692 *** (0.0000) | 1.0000 | 5.3341 | |||
Riskdum2 | −0.5521 *** (0.0000) | −0.6912 *** (0.0000) | 1.0000 | 7.5141 | ||
Totalreturn | −0.3590 *** (0.0012) | −0.2466 ** 0.0295 | 0.3706 *** (0.0008) | 1.0000 | 5.8991 | |
Term | −0.3163 *** (0.0048) | −0.3446 *** (0.0020) | −0.2575 ** (0.0229) | −0.2231 ** (0.0496) | 1.0000 | 7.4970 |
Variable | Coefficient | Std Error | p-Values |
---|---|---|---|
Constant | 11.6237 ** | 0.0856 | 0.0000 |
Totalreturn | 13.0120 ** | 4.196958 | 0.0031 |
Typedum | −0.8867 ** | 0.189548 | 0.0000 |
Riskdum1 | −0.3491 | 0.294440 | 0.2410 |
Riskdum2 | −0.7203 * | 0.349466 | 0.0441 |
Term | −0.0575 ** | 0.018223 | 0.0026 |
Variable | Coefficient | Std Error | p-Values |
---|---|---|---|
Constant | 6.7235 ** | 0.3197 | 0.0000 |
Totalreturn | 7.8010 * | 3.5102 | 0.0263 |
Typedum | −0.8050 ** | 0.1453 | 0.0000 |
Riskdum1 | −0.2496 | 0.2294 | 0.2766 |
Riskdum2 | −0.5480 * | 0.2709 | 0.0430 |
Term | −0.0305 * | 0.0146 | 0.0364 |
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Borrero-Domínguez, C.; Cordón-Lagares, E.; Hernández-Garrido, R. Sustainability and Real Estate Crowdfunding: Success Factors. Sustainability 2020, 12, 5136. https://doi.org/10.3390/su12125136
Borrero-Domínguez C, Cordón-Lagares E, Hernández-Garrido R. Sustainability and Real Estate Crowdfunding: Success Factors. Sustainability. 2020; 12(12):5136. https://doi.org/10.3390/su12125136
Chicago/Turabian StyleBorrero-Domínguez, Cinta, Encarnación Cordón-Lagares, and Rocío Hernández-Garrido. 2020. "Sustainability and Real Estate Crowdfunding: Success Factors" Sustainability 12, no. 12: 5136. https://doi.org/10.3390/su12125136
APA StyleBorrero-Domínguez, C., Cordón-Lagares, E., & Hernández-Garrido, R. (2020). Sustainability and Real Estate Crowdfunding: Success Factors. Sustainability, 12(12), 5136. https://doi.org/10.3390/su12125136