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Finance Your Real Estate Project

MAX PROPERTY GROUP ARTICLE

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Finance your real estate project

On the platform of Max Crowdfund, you can not only invest in real estate, but it’s also possible to apply for funding. If you want to apply for financing for the purchase, renovation, or transformation of your real estate project, you are not always eligible for a loan from the bank. We, at Max Crowdfund, can arrange this financing for you through crowdfunding. This article explains how to qualify for funding on the Max Crowdfund platform.

First of all, it’s good to know what real estate financing entails and when you may be eligible to apply for financing.

Financing is the provision of capital to pay for certain activities, such as purchasing a new house or a real estate project. You can lend money for this from the bank or another institution. You will eventually repay this money, including the predetermined interest rate.

Financing is often used to realize a real estate project (for example, for the renovation of a building). Previously, an entrepreneur could easily contact the bank to apply for this financing, but nowadays, the bank is very reticent when it comes to real estate projects. One of the main reasons is that the banks no longer have much confidence in these projects. That is why these entrepreneurs are looking for an alternative. Max Crowdfund offers a suitable solution; you can easily apply for financing for your project via the platform. The money is collected through crowdfunding. Funding applicants and investors are brought together on the Max Crowdfund platform. After investing, the investors receive an interest rate between five and fifteen percent. This depends on the risk of the investment.

How can you apply for financing on the Max Crowdfund platform?

You start by creating an account. It is important to submit the KYC information. KYC stands for “Know Your Customer” and this means that you must identify yourself by answering several personal questions and uploading your ID. Then you make a 3D scan of your face. This way, we can compare these images with your passport to make sure it is really you.

You can then verify your account by transferring at least one cent to your account. Once the personal account has been verified, you can add your company details. This includes the Compare Certificate of Incorporation, the Articles of Association, and you will need to link your company’s bank account. If all this information is received in good order, we will do a credit check. When this is in order, you can immediately apply for funding for your project.

You will need several documents to apply for funding, including:

–       A Business plan

–       A recent valuation report for the real estate object

–       A purchase agreement

–       A lease

–       Building permits

We also check the vitality of the project and the exit strategy. Once your application is complete, our investment committee will answer within 24 hours whether your real estate financing is accepted for placement on the platform. If your application for financing is approved, we will discuss the amount of interest with you. This depends on the result of our “Risk Rating Model”, which can be found on our website.

The application has been approved and will be published on the website. How does the process look like after this stage?

We will display your project as “Coming soon” on our platform for at least 48 hours. In this way, potential investors can analyze the type of investment and make an informed choice. During this time, you can choose to organize a private tour where you can invite your family and friends to be the first to invest in your project.

Then the status of your project changes to “Open”. In this phase, our international pool of real estate investors can invest in your real estate project.

After your project is fully subscribed, a 24-hour “Cooling Down” period begins, during which investors have time to change their minds. This is a legally required rule of the AFM. After this short period, the status of the project changes to “Closed”.

The money has been crowdfunded. What will happen next?

Before you receive the raised money, we register a “first right to the mortgage.” All parties must sign the loan and guarantee agreements. The money you need to buy, renovate or transform property is always sent to a notary or lawyer and not directly to you. This process can take several weeks but depends on the jurisdiction.

Once all payment conditions have been met, we will pay out the collected amount. At this point, the status of your project will change to “Active.” This is when the interest payment for the investor starts. Investor pay-outs are transparently shown in the repayment schedule, which is attached to each fundraiser.

At the end of the set term, the investors receive both their invested amount and any remaining interest. When all payment obligations have been met, your project will be closed. The money for your investment has been crowdfunded at this stage, and you can start realizing your dream project as stated in your business plan. You repay the loan in full at the end of the term.

For more information or questions about financing real estate projects through Max Crowdfund, visit our website.

Written by: Julia van der Kooij & Fatima Boudour

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