Investacrowd is one of only a few crowdfunding platforms in Singapore that allow users to invest in real estate. It offers investors the opportunity to invest in debt and or purchase equity from real estate development companies in developed markets.
|Summary of Investacrowd Investment Platform|
|No investor service fee|
|Debt and equity opportunities|
|Competitive returns (12 - 40%)|
|19 funded projects, $40 million raised, 1,750 accredited investors, $450+ million invested|
|Users must be accredited investors|
Table of Contents
- What Makes Investacrowd Stand Out to Investors
- Investment Opportunities at Investacrowd
- Investor Eligibility Requirements
What Makes Investacrowd Stand Out to Investors
Investacrowd stands out as it allows users to invest in international real estate development projects. The platform gives investors the opportunity to choose between debt and equity investments in real estate development in developed markets including Australia, Hong Kong, Japan, the United Kingdom, the United States, and Singapore.
Real estate investments are rarely accessible to individual investors due to a number of factors. First, there are major capital requirements for the purchase and development of property, as they can cost anywhere between few hundred thousand to millions of dollars. Additionally, the long-term investment horizon, property taxes and skills required to develop real estate often exceed individual investors' capabilities. To be sure, this platform requires a much higher minimum investment (S$100,000, S$25,000 for some first-time investors) than other crowdfunding sites (e.g. MoolahSense: S$100, Funding Societies: S$50), but those sites do not give users access to real estate markets. Further, S$100,000 is less than the amount required to begin most real estate investments individually. Investacrowd only offers users the opportunity to purchase equity in real estate development companies, so investors interested in equity in startup companies would be better off considering FundedHere or Fundnel.
Investment Opportunities at Investacrowd
Investacrowd allows investors to invest in developed real estate markets through senior and junior debt as well as preferred and common equity in real estate development companies. Investments range in order of payout, risk and return. Equity investments, which give investors ownership of shares in real estate development companies or projects, are typically riskier and offer higher potential return rates. Common equity, which is paid out last, offer rates as high as 40%+ IRR (internal rate of return). Preferred equity, which is paid out before before common equity, offers lower returns of 20%+ IRR. The platform's senior and junior debt investments in real estate projects present less risk, and therefore, offer lower returns (8-12% and 12-18%). The investments also vary in duration. Senior debt ranges from 3 - 12 months, junior debt ranges from 12 - 18 months, preferred equity ranges from 18-36 months, and common equity lasts more than 36 months.
All projects invested in by Investacrowd are security-backed, meaning that the borrower's pledged assets that can be sold to repay lenders in the case of a default. This does not guarantee repayment, but it reduces the risk faced by investors.
|Senior Debt||Junior Debt||Preferred Equity||Common Equity|
|Annual Returns||8 - 12%||12 - 18%||20% + IRR||40% + IRR|
|Minimum Investment per Project||S$100,000||S$100,000||S$100,000||S$100,000|
|Investment Duration||3 - 12 months||12 - 18 months||18 - 36 months||36+ months|
|Order of Payment||First||Second||Third||Last|
Investor Eligibility Requirements
Investacrowd requires platform users to be accredited investors. This means having at least S$2 million in net personal assets, with a primary residence value accounting for no more than S$1 million, and an income of at least S$300,000. Additionally, investors must be at least 18 years old. Singaporean and international investors are welcome to invest using the platform. The minimum investment requirement is S$100,000, although some first-time investors are allowed to invest with just S$25,000.