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ClubFunding is a leader in crowdfunding in France with over a billion euros funded, and still no defaults since their launch in 2015 and very few delays. There are many very different projects each week. I particularly like their property dealer projects in residential real estate in major French cities. They generally have rates around 10%, which is quite good for an established platform of this caliber. I was able to interview Gautier Allard, the CEO of ClubFunding here:
Projects fill up very quickly, sometimes in a few seconds; you have to be very reactive to position yourself on the best projects. Very different projects are regularly offered, several times a week. We find all types of projects: real estate development projects, capital refinancing, buy-division-sell, etc... Projects are all over France, in the capital, in major cities but also sometimes in the islands. It is necessary to analyze the projects before investing. This is what I do quite regularly on my YouTube channel. Here's an example of an analysis:
Returns hover around 10%. Over the years, this platform has built a solid reputation in the world of crowdfunding for real estate projects. In terms of guarantees, it varies greatly depending on the projects. There are often first demand guarantees (GAPD) and it is essential to analyze the balance sheets of the holdings to ensure the solidity of the guarantees. More rarely, we will have first-ranking mortgage guarantees. As projects are sometimes a bit complex, we are used to discussing them on the Objectif-Renta investor club.
10/02/2023: The real estate crowdfunding platform ClubFunding financed €424.5 million in 2022, an increase of 55%. ClubFunding provided its investors with an average annual return of 10% in 2022 and paid out €42.5 million in gross interest (including the monthly coupon payments). In 2023, thanks to the new authorization as a crowdfunding service provider (CSP), ClubFunding aims to accelerate its internationalization by exploring new geographies. The Group wishes to continue innovating by offering new equity opportunities and directing its investment opportunities towards assets with a positive impact for society and the environment.
25/09/2022: The platform continues its development by raising €125 million from institutional investors. The platform will expand internationally. This is excellent news for diversifying investments geographically with ClubFunding. As investors, it is an additional security to be able to invest in Europe alongside one of the most solid and regulated platforms in France.
To invest with ClubFunding, you need to authorize SEPA direct debit. This is a peculiarity of this crowdfunding platform. The advantage of this payment method is that you don't have to reload your wallet like on other platforms. Revenues are deposited directly into your bank account, which is also a specificity of this platform.
The platform offers a nice Bonus for the first investment using the referral code MarcBluerSky. Details below.
Bond-type fractional real estate involves financing a real estate project and receiving both rental income and potential capital gains in case of resale. The returns are lower than those from traditional crowdfunding because these are rental investments rather than property trading projects. On most platforms, the projects are associated with first-rank mortgages, the gold standard in real estate security.
Vous détenez une obligation avec un taux fixe sur chacun des projets mais contrairement à une obligation simple, le capital remboursé à l'échéance dépend de l'évolution du prix du bien. En l'occurrence, vous pouvez obtenir une plus-value si le marché s'apprécie. L'échéance des obligations est de long terme, en général entre 8 et 10 ans et potentiellement renouvelable. Les intérêts ou coupons sont fixés lors de l'émission obligataire et sont versés selon une périodicité prédéfinie jusqu'à son échéance. Une obligation est un titre financier réglementé par l'autorité des marchés financiers (AMF).
ESCP (European Crowdfunding Service Providers)
ESCP (European Crowdfunding Service Providers)
ESCP is the European regulation for crowdfunding service providers. From November 2023, only crowdfunding service providers ("ESCP") are authorized to offer crowdfunding services within the scope of the regulation, whether they involve loans (crowdlending, excluding free loans) or securities (crowdequity). In France, this regulation replaces Crowdfunding Investment Advisors (CIP) and Crowdfunding Intermediaries (IFP).The list of authorized ESCP platforms
The average expected yield of projects is 10.91%
Yields are calculated based on the projects analyzed on this site and not on all projects.
⚠️ The higher the yield, the higher the risk.
The delay rate for more than 6 months at Clubfunding is 9.32%.
The delayed time is computed based on the contractual date and not target date
The permanent loss rate at Clubfunding is 0.00%.
The minimum amount to invest is 1000€.
Clubfunding has a high minimum amount to invest.
🌎 The financial income are taxable in the investor's country of tax residence.
In France, since January 1, 2018, income from movable capital as well as capital gains from securities sales are subject, when taxed, to a flat-rate withholding tax (PFU) of 12.8%, to which social security contributions of 17.2% are added, making a total rate of 30%.
However, you can choose, when declaring your income, for a global taxation of these income and gains at the progressive income tax rate by checking box 2OP. You may be exempted from the portion corresponding to the flat-rate withholding tax of 12.8% for income tax purposes if your reference fiscal income for year N-2 was less than €25,000 (€50,000 if you are married). When making your declaration, you have the option to maintain the choice for taxation at 30%, or to submit your capital gains to the progressive income tax rate (to which 17.2% social security contributions will be added).
➡️ Search for previous reviews of chez Clubfunding
A real estate crowdfunding operation involves several categories of risks:
➡️ Operational Risk: human errors, incompetence, material shortages, delivery delays, poor management, accidents on site, provider bankruptcy...
➡️ Technical Risk: unpleasant surprises during soil and foundation studies, pollution, thermal, acoustic issues...;
➡️ Administrative and Legal Risk: difficulties in obtaining a fully cleared building or development permit, administrative authorizations, Financial Completion Guarantees, Construction Insurance, or All-Risks Site insurance, compliance of sales documents, poorly assessed urban planning authorizations;
➡️ Financial Risk: poor cost analysis, budget overruns, lower profit margins, obtaining bank credit, etc.;
➡️ Commercial Risk: insufficient pre-marketing, insufficient local market study (prices, needs, location...), delays in lot sales (commercialization), neglected suspensive conditions, unfavorable market evolution, risky sales strategy, overly optimistic exit prices, etc.
Beyond the analysis of the real estate project itself, crowdfunding platforms examine the financial and operational strength of the companies participating in the operation, which also face potential risks, mainly financial.
The evaluation thus focuses on numerous criteria, including:
➡️ Legal and Financial: capital structure, ongoing disputes, income statements and financial statements, solvency, profitability, liquidity, level of equity, etc.
➡️ Operational: organizational chart, experience of the executives, history of successfully completed operations, quality of previous programs, reputation, etc.
➡️ Financial Statements: financial statements (balance sheet and income statement) of the operator must be analyzed to determine its financial health.
➡️ Fraud: The operator may file for bankruptcy fraudulently or abscond with funds, which is why guarantees on cash flows are necessary.
Even with good preparation, it is impossible to anticipate climatic events (flooding, frost, storms...), macroeconomic factors such as sudden changes in property prices or interest rates, high inflation, etc., or legislative changes (regulatory modifications, taxation changes...), or situations of war. These risks are difficult to control. It is essential that operators have taken out the necessary insurance and that sufficient financial margin is planned to cope with potential contingencies.
En dehors des risques en lien direct avec l’activité immobilière, il existe également des risques attachés au type de titre financier utilisé pour la majorité des opérations de crowdfunding immobilier, à savoir les obligations :
➡️ Risque de perte en capital : les sommes investies ne sont pas garanties et peuvent subir une perte totale ou partielle ;
➡️ Risque d’illiquidité : par défaut, la revente ou le remboursement anticipé des titres ne sont pas possibles.
➡️ Risque de rendement inférieur : en cas de difficulté, il est possible que le rendement annoncé soit plus faible que prévu. Le capital est alors préservé, mais les intérêts obligataires versés sont moindres.
➡️ Risque de modification de la durée de l'emprunt : contractuellement, la société émettrice a la possibilité de rembourser par anticipation ou de prolonger l’emprunt (prorogation de 6 mois maximum en général). Les intérêts à percevoir peuvent donc être inférieurs aux prévisions initiales ou plus importants si l’échéance de l’emprunt est reportée.
Crowdfunding, also known as participatory financing, allows funding of projects with small amounts, generally starting from 100 or 1000 euros. The financing is done directly on a web platform and one can pay either by bank transfer or by credit card. You can invest in multiple projects and thus achieve good diversification, both in terms of project types and geographical areas. For real estate investors, it is a complementary tool to traditional physical real estate investment. Investing in crowdfunding projects requires analytical work to select the best projects.
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