Crowdfunding is a financing method which allows the public to finance projects they are interested in through an internet platform.
We will use Crowdfunding to launch and achieve each building project. It amounts to putting the financing of the construction projects in the hands of the public, with the double benefit of giving to all a chance to property and reducing the costs at the beginning for the Company.In other terms, all the interested persons who will choose to invest will then become partly owner of the property. Yet, it will remain in the hands of the Company to manage the property.
Once the project has come to a closure, we will organize the resale, redevelopment or rental of the property.
If the building is rented, part of the revenues would be given to the investors according to their participation in funding the project, and the rest would come back to the Corporation.
There are two possibilities for the property to be sold. First case scenario, the house is sold to an external buyer at the market price and therefore a much higher price than the construction cost. In this scenario, the various owners will receive money according to their participation and we will keep a share of the sale price.
Second case scenario, one of the crowdfunders is interested in the property and wishes to acquire it in full. Each crowdfunder has a Put Option on the house they participated to fund and can therefore choose to buy it from the other co-owners. Here, the potential buyer will benefit from a preferential price. If he does not have important funds or provide sufficient guarantees, he will still be able to purchase the house with high interest rates. The selling price as well as those high interest rates will provide revenues for the other crowdfunders and for us.