PROJECT DESCRIPTION
Designable is a crowdbuilding platform that creates neighborhood communities and connects them with landowners to develop on-demand new construction buildings in cities.
Its technology also allows owners to choose between different layouts, styles and finishes until the houses are adjusted to their real needs.
The use of sustainable materials, a highly efficient consumption of houses and the generation of renewable energy in the buildings themselves make it possible to achieve energy self-sufficiency and neutrality in emissions in all its projects. It is a new model of sustainable, risk-free and people-centered real estate development that pursues one purpose: to make it possible to live in the city, in a personalized home and protecting the planet.
After five years, two successful buildings and more than 4,000 interested people, Designable now presents its third building in Valencia, the Edificio Palleter, a project that already has 100% of the houses reserved. After having confirmed the product market fit, it opens the opportunity to co-invest in the building with a pioneering real estate investment product.
HIGHLIGHTS
This type of investment is different from investing in the traditional startup capital of the Bolsa Social. It is a real estate investment, that is, you will invest in the Palleter Building and not in the capital of Designable.
The investment in the capital of the promoting company of the Palleter Building has a similar operation to that of a loan: you will invest your money at a fixed annual interest rate (5%) for a specified period (36 months), which will end when the houses are delivered. This is a "bridge" loan, since Designable will use the financing for the purchase of the building plot, together with the down payment from the home buyers, for the further development of the development.
Here are some of the investment highlights:
Investment information:
- Fixed-term investment.
- Fixed return of 5% per annum * at 3 years.
- 100% of the houses reserved.
- More than 4,000 people interested only in Valencia.
* A 7.5% management commission from the Bolsa Social will be deducted from the interest gains. You can see an example on section "Potential return of the investment"
Building information
- Personalization: Each owner personalizes their home to meet all their needs.
- Environmental impact:
- The Building produces renewable energy with photovoltaic solar panels and uses aerothermal energy to condition and heat the water in the houses.
- The building achieves energy self-sufficiency and complies with the BREEAM Sustainability Certificate.
USE OF THE INVESTMENT
The capital obtained in this round of financing will be used as a 'bridge loan' for the “Purchase of the land” and the costs of “Project Start”.
The costs of the Palleter Building are distributed, approximately, as follows:
30% Land purchase
20% Project start (professional fees, fees and taxes)
50% Construction of the building (professional fees, construction materials and labor)
How is the project funding divided?
1. 25% funded by the neighbors: With the reservation, each neighbor contributes 25% of the total value of their house, which represents 25% of the total cost of the building, covering most of the “Purchase of the land”.
2. 25% funded by the investors in this round: The fixed-term loan of the investors of La Bolsa Social represents 25% of the total cost of the building (5% for the “Purchase of the land” and the other 20% for the “ Project Start ”).
3. 50% funded by Arquia Bank: Finally, Arquia Bank (Caja de Arquitectos) finances 100% of the “Construction of the building”, which represents the remaining 50% of the total cost of the building.
INVESTMENT POTENTIAL RETURN
The person who invests in the promotion of Edificio Palleter, means an annual return of 5% in a maximum of 36 months.
For example, the person who makes an investment of 10,000 euros in the project, seek a return of 500 euros every 12 months for three years. At the time of delivery of the houses, which coincides with the last interest payment, you will recover your initial investment of 10,000 euros.
Example: Return of a 10,000 euros investment:
- Year 1: € 500
- Year 2: € 500
- Year 3: € 500 + € 10,000 = € 10,500
Gross profit: € 1,500
Management fee of the Bolsa Social on profitability: 7.5%
Net return for the investor = € 1,500 - / (7.5% * € 1,500) = € 1,387.50
ADDITIONAL INFORMATION
FREQUENTLY ASKED QUESTIONS
Why is it a different investment?
Because it is a real estate promotion. The funds are only used if the viability of the project is assured, which happens if more than 90% of the available houses are sold. For this, each buyer must pass an independent bank scoring favorably and make an initial commitment of 25% of the value of their future home. In the case of the Palleter Building, 100% of the houses have already been reserved, a total of 12.
How do you have a fixed return of 5% per year?
The investment works as a bridge loan and complementary to the capital provided by the buyers of the building (initial 25%) to finance the purchase of the land in the Edificio Palleter, so the fixed profitability of 5% per year is considered as one more financial expense within of the operation.
Can I get my investment back before 36 months?
Yes, but it is not up to you. In the event that the delivery of the houses is advanced, the investors recover the invested capital and 100% of the promised profitability ahead of time.
Can I get my investment back after 36 months?
The normal thing is that the delivery of the houses happens between 30 and 36 months after formalizing the investment, so it is unlikely that it will be delayed much more than 3 years. If it happens, the last interest payment would be received at 36 months and the principal would be recovered upon delivery of the houses.
What happens if, due to some exception, the building is never finished or the houses are delivered?
Designable has provided a company liquidation system for exceptional cases that can hardly be taken into account. In this case, investors are expected to have a preferential position to recoup the investment by selling the company's assets, that is, the land, the project, the license and other procedures that have already been carried out.
