Alternative financing in real estate adds a new player. The financial firm Fellow Funders has created a new line of crowdfunding business specializing in real estate, which has been launched with the launch of its first project in the Madrid neighborhood of Delicias, as explained by Pablo Barriopedro, head of the business unit.
Fellow Funders is launching the financing of real estate projects through its Equity Crowdfunding platform, authorized by the National Securities Market Commission (Comisión Nacional del Mercado de Valores, Cnmv). Currently, the real estate division of the company is composed of three professionals, in addition to the support of the financial area of the group.
The first project, with a required investment of $1 million (€870,000), marks the roadmap for what will be one of the division’s lines of business: the refurbishment of commercial or industrial spaces to transform them into housing. Later on, the company plans to enter the development business, a step they expect to take between the end of the year and the beginning of 2022.
“We are targeting small and medium-sized developers who are having problems obtaining bank financing,” Barriopedro points out. “We are at a time where there are investment opportunities in the real estate sector, as a bullish cycle is foreseeable after the coronavirus crisis,” added the executive.
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Fellow Funders expects to carry out up to five projects in 2021 and enter the development
As for the investor, the company is looking for a profile “that is interested in diversifying its alternative investment portfolio with real estate products that can make an average ticket of between $11,900 (€10,000 and $17,800 (€15,000),” explained Barriopedro. Even so, the platform allows minimum investments of $1,190 (€1,000).
In this context, the company expects to launch between three and five real estate projects on the market by the end of the year. Like the Delicias project, the company is focusing on value-add projects with returns of around 20% in the short term.
Fellow Funders plans to expand its real estate projects to other large urban centers in Spain such as Bilbao or Barcelona, although the focus is on Madrid. “The capital is the city we are most interested in,” said the executive. “It is very dynamic and the real estate market has continued to move despite the pandemic,” he adds. With the business established in Spain, the company is considering making the leap to Europe.
Fellow Funders, founded and led by Francisco Mariscal in 2017, has four business areas: company valuation through its fair value area, strategic advice through the alternative assets division, accompaniment of exits to the capital markets with its capital markets area and alternative financing through crowd investment.
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First published in EjePrime, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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