Translated from DeTelegraaf, the largest daily morning newspaper in the Netherlands. (Note: Some of the content has been changed in translation from the original Dutch)
Rotterdam — You can now invest in an apartment complex or a renovation project from just one hundred euros.
Previously excluded from these opportunities, because developers often imposed high entry levels, private individuals now have access to the real estate market through crowdfunding platforms- where their investment can be monitored continuously by way of a digital network.
Crowdfunding, the raising of money by groups of people (for an apartment, for example) is more than twenty years old. Platforms such as Kickstarter, Indiegogo, Gofundme and Sellaband, became the best known global crowdfunding resources. In the Netherlands, Collin Crowdfund made a name for itself by collecting and providing loans to SMEs.
Rotterdam’s Max Crowdfund is now the first Dutch online platform that works via the blockchain and has received approval from the financial regulator AFM. It is authorised to offer loans from companies in the Netherlands, Germany and the United Kingdom, secured by real estate assets.
Growth In Europe
“There has been a need for this for years”, says Esther Dekker of Max Property Group, the company behind Max Crowdfund. “We now want to grow throughout Europe.”
All the platform transactions are recorded on the blockchain: a large digital ledger, kept in the air by PCs and servers across millions of users, and on which all customer investments records are unique, immutable and listed in a digital chain. Purchases and sales, processing and administration are all done digitally, without the intervention of expensive advisers and civil-law notaries. On the blockchain, they can always be viewed online by everyone.
The platform offers developer loans to the public, whilst the loans themselves are backed by real estate. Individuals can invest from €100 to support a project and received a return on their investment.
There are risks on the investment: For example, if the loan applicant can no longer pay the interest that must be paid, Max Crowdfund takes over the property and it is then auctioned.
In this market, even more initiatives are getting hot: the Annexum company started with start-up Bloqhouse this spring. Private investors receive a “participation” in an apartment or residential block in a ticket for euros. As with Max Crowdfund, the investor receives a digital “token” in exchange for euros. This goes into your own secure digital “wallet” or purse. Thanks to these tokens, the small individual can become part of the owner of the project.
Max Crowdfund now has 70,000+ registered users. Still under the radar, the platform is currently expanding in the Netherlands, Germany and the United Kingdom, where the real estate company manages 3,500 properties with its partners, as well as 1,000 properties in Rotterdam.
There are no longer any intermediaries on the blockchain: everyone trades directly with each other. “Because everything is completely clear. Thanks to the blockchain, investing in real estate is more transparent.” says Erwin van Kekem, head of technology at the platform. “The costs are many times lower now that all real estate agents, notaries and administration are out. This model is an attack on the real estate establishment.”