The Spanish Royal Academy defines “shelter” as a building constructed in certain places in the mountains to accommodate travelers and hikers. Within the investment ecosystem, this term translates to those investments that help us to keep our capital safe during ” economic storms.” Over the last few months, experts have pointed to real estate as the main safe-haven asset, especially with inflation looming.
We had already discussed real estate as the perfect refuge from the current economic situation in our blog this spring. On that occasion, we announced that our real estate area raised a total of five million dollars for different house flipping and development projects in one year of activity. Just two months later, we are presenting a project with which we have doubled our commitment, raising a total of ten million euros invested in real estate!
Record target capital
Two months ago, it seemed unthinkable to close the spring with this amount, or even two weeks ago, when we reached seven million in the target capital with our “incursion” in Pozuelo. Or even two weeks ago, we announced that we had reached seven million with our “incursion” in Pozuelo. However, our current round is one of the rounds with which we will once again exceed our investment ceiling. The target capital of the round amounts to… 3,100,000 euros!
Naturally, we reached these figures hand in hand with the developer with whom we began our journey in Spanish real estate: Re-Aviva. For our sixth round with them, we decided to move to Chamartín, specifically in Canillas street, just a few steps away from the famous Príncipe de Vergara street.
What does the project consist of? We continue to follow our commitment to house flippings, currently well accepted by our investment community. These projects consist of acquiring premises or housing for subsequent refurbishment and change of use, converting them into habitable housing. It is thanks to the sale of these properties that we obtain the profits (profits to be distributed among the investors).
The higher the number of homes, the higher the minimum ticket.
The reason for the increase in the target capital is the project ambition. Whereas the last house flipping in the vicinity of Wanda Metropolitano was expected to create six homes, the current round will create up to 21. Given that this is our first round with a target capital of more than two million euros, we will only target accredited investors on our platform (any investor can be accredited on the platform), raising the minimum ticket to €2,500.
How much profit do investors get from the project? The estimated return, in this case, is 19% over 14 months, which means an annualized IRR of 16%. These figures are similar to those of previous funding rounds by the Re-Aviva group (all of them are very attractive for investors who want to obtain profits with a low level of risk).
Beyond a safe haven asset
Yields above 15% and moderate risks. Fellow Funders has seen the privileged position of the real estate sector. Not only as a secure haven asset but also as a unique opportunity to grow and offer our investors options to diversify their portfolio with a type of investment that was not even available on our platform two years ago.
Fellow Funders Real Estate is growing by leaps and bounds. Not only in record rounds but also through the quality provided by people with extensive experience in the sector. We have recently incorporated Jorge Estévez, a real estate enthusiast from the prestigious real estate brokerage firm GILMAR, as Real Estate Director.
Jorge joins our senior partner Pablo Barriopedro to lead one of the most important areas of Fellow Funders. Six of the twelve projects we have opened on our platform during the year 2022 are marked by the characteristic orange color of the brick. Our platform is now showing an increasing interest in the real estate sector, as evidenced by the interest that previous rounds have aroused in our investment community.
What if I am not an accredited investor?
Fellow Funders allows any investor to become accredited through a simple process, regardless of income and experience. Anyway, don’t panic. We are doubling our investment opportunities this week! In collaboration with Onys, with whom we have already launched a development in Sotogrande, we are launching a funding round for a development in the Arturo Soria-Alcalá axis, near the Quinta de los Molinos park.
The project consists of the construction of a building of seven apartments and an included storage room. The round has a target capital of €760,000 and a minimum ticket of €1,000. The funding round does coincide with Vergara’s project in terms of annualized IRR (16%), resulting in an estimated total return of 28% over 20 months.
As the Romans would say in the Empire, “All roads lead to Rome.” Whichever project you choose, Fellow Funders has already ensured you an investment of moderate-risk and returns above 15%. Do you want to invest in Príncipe de Vergara? Do you want to invest in Quinta de los Molinos? Or diversify your portfolio with both projects? In either case, you can already do it through our platform!