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A starter question from the Crowdinform team, to get the conversation going. Share your own experience below.
A property loan looks attractive on the platform. Which points in the project documents matter most before putting money in?
Points worth checking in the documents:
- Loan-to-value (LTV): the lower it is, the more room there is if the property sells for less. A common benchmark is below 70%.
- Security: is the loan secured by a first-charge mortgage, or is it a subordinated loan that is repaid only after other lenders?
- The developer: previous completed projects and a track record you can verify. No verifiable track record is a red flag.
- The exit: how and when the loan is repaid (a sale, a refinancing) and whether there is a defined repayment event.
- Stress scenarios: what happens if the project is 12 months late, or the property sells 15% below the projected value.
- Concentration: several projects on one platform add platform risk on top of project risk. Capital is at risk: crowdfunding investments are not covered by deposit guarantee schemes, can lose part or all of their value, and may be hard to sell before the end of their term.
Drafted with AI from the sources below and checked by Crowdinform. General information, not investment advice. Capital at risk.
Sources: crowdinform.com/en/articles/how-to-analyse-real-estate-crow…
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