Investors and other big promoters aren't trusting of real estate crowdfunding

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

This type of financing accounted for 2018 is 1% of the entire real estate sector that moved more than 17,000 million euros. But it's not all bad news, within the crowdfunding, the brick grew up to 23% (23 million euros of the 101 million), in 2017. The larger promoters and investment funds are wary of this method.

"We need large players to enter the market to boost real estate crowdfunding," says Yago Poveda, CEO of Icrowdhouse. Poveda is the visible head of one of the few platforms dedicated to the financing of real estate projects through crowdfunding. The entrance of the Aedas, Neinor, Cerberus or Blackstone would be a great impulse for this method.

"We are focused on the big promoter and the large investment fund, but it is very complicated, because a very big cultural change is needed in Spain", explains Poveda. For this reason, the CEO of this company is looking for a first approach for the great promoter to channel the investment process to the technological world, so that later "little by little they give us part of their opportunities to the platform".

Despite the difficulty, crowdfunfing does not give up and this is why Poveda defends this model. "We have a knowledge of the sector that the investor values ​​more than the fact of seeing an apartment in Idealista or a real estate portal," explains the CEO of ICrowdhouse. With respect to the promoters, the problem is access to the capital, because they still have very easy access to a private capital. "Nowadays it is not useful because they can attract investment from only one agent of trust and not ten as it could happen in crowdfunding," says Poveda. But the exit for this niche is in these great 'players'. "With small investors we are not going anywhere," he explains.

Icrowdhouse opened to the investment market in October 2018 with two residential projects 'prime' and the support of the real estate company Busquets Gálvez, its partner in this adventure. In these months of life has added another project-a local in Barcelona. "The goal is to get projects with great value, real estate," says Poveda.

The minimum ticket required by the platform for the investment was one thousand euros, a figure much higher than the fifty euros demanded by other start ups to enter into some projects. But now they have decided to eliminate that minimum, because they are focused on the growth of the platform and any investment is welcome.

The first projects uploaded to the Icrowdhouse platform are located in Barcelona and Marbella. The first one is a detached house in the Gràcia neighborhood. It is a new construction house with 202 square meters built and for which the developer has already invested 328,000 euros in the purchase of land and other studies to obtain building permits.

The idea is to complement the investment in large projects through its network, while in other smaller ones, the developer must provide a minimum of 10% of the total investment of the project.

All good intentions, but lack of an important player of the sector that bets for this financing. "As soon as the first one does, everyone will go later," says Poveda. The problem is that until these promoters have unlimited checks from private investors it will be very difficult to acquire this part of the pie. In addition, in the case of this 'start up' do not close to other niches outside the residential. The retail, which lives a great moment, also this other option to value for the company.

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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