The property developer is the person/company responsible for each property project and who offers the loan to investors on Fundbricks.com. The property developer typically has a site (or property) on which private homes can be built or which can be renovated/converted.
There are a large number of solid Danish real estate projects that cannot be completed due to lack of financing. The bank will typically contribute X%, the property developer can contribute Y% and the remaining Z% of funding is raised through Fundbricks.com.
The project company is the legal entity that owns the land/property (or the right to build on it), has the construction contract with those who will build the housing and is legally responsible for the implementation of the housing project.
It is also the project company that has any loan agreement with the bank and it is the project company that is the legal party with which the investors conclude the loan agreement. The project company is typically 100% owned by the property developer.
The deposit account is the main management tool to ensure that the investors' (or the fund's) money is used to realise the real estate project. Here, all deposits from crowdinvestors, fund and possibly bank will be deposited and continuously paid directly to the craftsmen/contractor as the construction progresses.
It is also through this account that your deposit and future interest profit will be paid from.
Crowdinvestors are private/institutional investors or funds that participate by lending to one or more real estate projects. A "crowdinvestor" is no different from a "regular investor", but simply an expression of a number of investors participating in a single real estate project.
Fundbricks.com has built a structure where the goal is to create maximum transparency and full clarity over the entire process. Investor clearing is done electronically directly through our platform - Here name, address and identity are verified as a condition for the validity of the loan agreement.
The bank typically has two functions in a real estate project;
1) financing/lending (1st priority financing)
2) deposit account.
The escrow account in the bank is set up based on instructions from Fundbricks.com and with wording that ensures that disbursements can only be made with the approval of external impartial construction expert and that Fundbricks.com can only withdraw its success fee.
The success fee for Fundbricks.com is the payment we receive when the money for the individual real estate project is raised through the platform. If the funding target for a project is not reached by the deadline, all deposits are reversed and Fundbricks.com does not earn the success fee.
The independent construction manager - together with the escrow account - is an important element in managing and ensuring that construction is carried out correctly and on time, that critical milestones are achieved and that payments are made only when construction milestones are achieved. The Construction Manager will visit the property/site on an ongoing basis throughout the construction period and will validate/verify that construction is being performed in accordance with applicable industry standards and to the appropriate quality.
The expert works under his own liability insurance.
In each housing project, there will be a description of what is being built, how many houses/apartments are included, the address and description of the local area.
Prior to the launch of the real estate project on Fundbricks.com, the real estate developer has concluded agreements with the general contractor(s) on the construction price, schedule, conditions of transfer, etc.
In order for a property project to be approved for Fundbricks.com, there must be independent valuations of the sale price of the completed property, to make it likely that the expected sale price will be at least 20% greater than the total construction and financing costs. An independent valuation also helps to provide an estimate of the expected selling period.
Once the bank and crowdinvestors (and fund) are redeemed, excess residual proceeds from the escrow account are released to the property developer. From this, it is the property developer's responsibility to pay any other costs related to the property project, and is from this point on beyond the control of the bank, crowdinvestors, fund and Fundbricks.com.
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Historical returns are no guarantee of future returns. The money you lend to projects can therefore increase or decrease in value and there is no guarantee that you will get back the full amount lent.
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