{"id":324761,"date":"2022-08-02T08:40:00","date_gmt":"2022-08-02T06:40:00","guid":{"rendered":"https:\/\/investinslovakia.eu\/?p=324761"},"modified":"2023-05-26T08:13:26","modified_gmt":"2023-05-26T06:13:26","slug":"ako-si-vybrat-realitny-investicny-projekt-ruzova-presov","status":"publish","type":"post","link":"https:\/\/wordpress.investinslovakia.eu\/en\/ako-si-vybrat-realitny-investicny-projekt-ruzova-presov\/","title":{"rendered":"How to choose a real estate investment project? Ru\u017eov\u00e1, Pre\u0161ov"},"content":{"rendered":"
In our second case study, we discuss the investor selection process. How to choose the right investment<\/strong> for you? As an example, we used the investment project Ru\u017eov\u00e1, financed through our platform. How did this project stand up against different investment opportunities?<\/p>\n\n\n\n In the Ru\u017eov\u00e1 project, investors had the opportunity to evaluate the total EUR 607 057<\/strong> in four campaigns with interest from 12,1 % to 13,28 % per year<\/strong>. Thus, in all cases more than 1 % per month<\/strong>, which is almost unprecedented in the real estate market.<\/p>\n\n\n\n Actively managed funds and other investment vehicles also reduce the investor's net return by management fees. After all, everyone wants to be rewarded for their work. When choosing an investment strategy, be sure to consider the amount of management and brokerage fees.<\/a><\/p>\n\n\n\n Investments with minimal costs can also be found outside the real estate market - in index funds. Probably the best known index fund in the world is the S&P 500. Based on a 50-year average, it has given investors an annual return of 11.17 %.<\/p>\n\n\n\n The Pink investment project outperformed all alternatives. And it still with the security of the investment property itself!<\/strong><\/p>\n\n\n\n Crowdfunding is exceptionally well suited for small projects (such as the Pink Project) where the ability to act quickly is key. Waiting 3 to 6 months for bank funding would very likely mean losing the opportunity. The property would have been bought by someone else in short order.<\/p>\n\n\n\n With crowdfunding, the project owner gets access to the funds in a matter of weeks for a fixed return to investors and a brokerage fee. Both are agreed before the campaign starts and are the only expenses to raise funding through the Invest in Slovakia platform.<\/p>\n\n\n\n Crowdfunding allows you to better tailor cash flows to the project itself. Depending on the needs of the project, the owner has the choice of payout on a pay-as-you-go basis or after a complete sale, payout of interest only on a pay-as-you-go basis, or payout of interest plus principal. In general, the longer you are willing to wait for a payout, the higher the payout you can achieve.<\/p>\n\n\n\n In the last two campaigns, the owner of the Pink project has switched to paying returns at the end of the investment period and has thus been able to offer a higher total return.<\/p>\n\n\n\n It is not always possible to find all the benefits in one project. Determine which parameters are key for you. Then you can choose the investment that meets all of them, as much as possible, or the ones that are most important to you.<\/p>\n\n\n\n Whether time, yield, safety (e.g. in the form of low LTV - explained below), benefit to society and the planet (green, eco, low-cost housing), transparency of the investment or the ability to invest with friends is the key factor for you, crowdfunding<\/a> offers you a solution<\/strong>.<\/p>\n\n\n\n When it comes to real estate, first-time investors are often unnecessarily scared that the project is owned by a company without a track record.\" In the real estate sector, it is quite common for the owner (developer) of a project to finance and apply for financing for the project through a so-called \"SPV\" (Special Purpose Vehicle), i.e. through a newly established company created exclusively for one particular project. This is not considered a grey tactic, nor is it necessary to immediately assume an unfair intention to \"disappear with the money\".<\/p>\n\n\n\n The company is set up with the intention of simplifying the financial structure and therefore the control and transparency of financial flows - which is definitely a good thing. After all, we want us, and especially the owner, to have a clear overview of financial assets<\/strong> and commitments, right? Even if this method is used, the property in question is owned by the company applying for the financing - we will of course make sure of that in our due diligence - in-depth analysis of the project<\/strong>, and the owner. For this purpose, the borrower shall provide us with the results to date and previous completed projects, evidence of their success, as well as a business plan for the new project.<\/p>\n\n\n\n Last but not least, we consider the aforementioned real estate that the debtor is guaranteeing. As a general rule, the lower the LTV (loan to value, i.e. the value of the debt divided by the value of the property), the easier it is for the owner to sell the property in the event of any problems and use the proceeds to pay off all his liabilities. For projects with multiple investment campaigns, the LTV varies over time.<\/p>\n\n\n\n In the case of the Pink Project campaigns, it was like this:<\/p>\n\n\n\n Higher value at the end of the project is not a problem as this is a project close to completion, close to sale. As such, it has already eliminated most of the potential risks (construction and permitting complications, etc.) and is not threatened by long-term market fluctuations.<\/p>\n\n\n\nNumbers first<\/h2>\n\n\n\n
Let's compare this with the alternatives:<\/h2>\n\n\n\n
\n
What enables the project owner to pay such high returns?<\/h2>\n\n\n\n
How to choose the right project?<\/h2>\n\n\n\n
Is crowdfunding safe?<\/h2>\n\n\n\n
LTV Project Pink<\/h2>\n\n\n\n
\n