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⚠️ 10/02/2024: Lots of projects are delayed. The platform has no ESCP license.
⚠️ 29/01/2024: Estonian authority issued a warning as Reinvest24 operates without crowdfunding licensed.
I've discovered Reinvest24 while I was trying to diversify my investments in real estate crowdfunding in eastern Europe.
I appreciate their project with 24 hours real time camera to monitor the progress the construction.
There are different types of projects: fixed rates, rentals, multi-stages, etc.
I managed to interview their founder:
I've interviewed the founder after 4 years of existence to assess the perspective of the platform.
The investor holds a simple fixed-rate bond. This is the most classic type of bond. It pays an interest, also called a coupon, which is permanently fixed at the time of issuance according to a predefined periodicity until maturity. A bond is a financial instrument regulated by the Financial Markets Authority (AMF).
The average expected yield of projects is 13.5%
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 Reinvest24 is 48.78%.
The delayed time is computed based on the contractual date and not target date
⚠️ Information on permanent losses is not available for Reinvest24
The minimum amount to invest is 100€.
Reinvest24 has a low 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 Reinvest24
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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