The project Landorthe by Raizers

Review of the project Landorthe by Raizers

Review's score :

This review is proposed by Sébastien on 09/02/2024

⏰ The project starts on 12/02/2024 14h00
⏱ The duration of the project is
💼 Minimum amount to invest is 1000€

🤖 Review's summary

Project Analysis: Landorthe with Raizers Hey there! Let's dive into the analysis of the Landorthe project on Raizers. This project involves the acquisition of a commercial space in Landorthe, a small town in the Haute-Garonne department of France. The plan is to renovate and expand the space before selling it to an investor. Sounds exciting, right? Let's take a closer look! The first thing that catches my eye is the high potential return on investment. It's always great to see that kind of upside! In fact, the projected return is even higher than the average return of the recent projects on Raizers. So, it definitely seems like a promising opportunity. However, there are a few weaknesses and warnings that we need to address. Firstly, the Loan to Acquisition (LTA) ratio is quite high at 255%. This means that the loan amount is significantly larger than the acquisition cost. While this may not be ideal, the low Loan to Sale (LTS) ratio of 37% is a positive, indicating a potentially profitable exit strategy. Another concern is the operator's commitment, which is only 5%. It would be great to see a higher level of engagement from them. Additionally, the type of guarantee for the project is a second-ranked mortgage and GAPD (guarantee of completion). However, there is limited information available about the financials of the company that provides the GAPD, which is something to keep in mind. On a positive note, the location of the commercial space is in a well-established business area with various stores and brands. This bodes well for attracting potential buyers or tenants. The purchase price of 542 euros/m2 is also competitive compared to the average price of 1850 euros/m2 for commercial properties. This indicates a good acquisition deal. The project is pre-sold 100% with one reservation contract signed by a real estate company, which is a positive sign. However, it's important to ensure that the final transaction takes place and the authentic act is signed. The CEO of the project has previous experience in similar operations and has successfully completed two projects in the past. This track record boosts confidence in their ability to execute the Landorthe project successfully. Considering the local real estate market, there has been a slight increase of 1.1% over the past year, according to meilleursagents. This indicates a favorable market condition for selling the renovated commercial space. While the potential profit margin of 12% in the optimistic scenario is decent, it's worth noting that the pessimistic scenario shows a very low margin of only 1.2%. This could be a risk factor to consider. Furthermore, a significant portion of the financing will be allocated to renovation and construction, representing 64% of the total cost. This indicates extensive and expensive work, which could impact the overall profitability of the project. In terms of risk management, Raizers has a low rate of delayed payments and no record of permanent losses, which is reassuring. In conclusion, the Landorthe project on Raizers seems promising with its high potential return and strategic location. However, it's important to be cautious of the high LTA ratio, low operator commitment, and the potential challenges in achieving a decent profit margin in adverse scenarios. Nevertheless, with careful consideration and monitoring, this project could be a rewarding investment opportunity. Happy investing, and if you decide to join Raizers, don't forget to use the referral code MBS to unlock some bonuses! Cheers! P.S. Here's the link to sign up: https://app.raizers.com/users/sign_up?sponsor_code=MBS