What is RealtyBundles’ mission? RealtyBundles’ mission is to create a global marketplace which connects investors with a network of real estate agencies. Our framework allows agencies to provide online real estate investment opportunities and services, and embodies trust for investors through our transparent service model. Our system also allows for tight control over the agencies’ activities, providing the ability to monitor that investments are our investors’ best interests. What is RealtyBundles’ model? Our model connects worldwide investors with a wide network of middleman real estate agencies that create value and provide support to the investors in their investment decisions. In doing so, we also offer a new business model to European real estate agencies, enabling them to enter a regulated market of online investment services. What services does RealtyBundles provide investors? RealtyBundles creates value for investors by connecting them with a wide network of agencies. We select the markets for the investments, and we engage with trusted local partners such as RE middlemen, RE certified evaluators, RE lawyers, RE management, RE renovation teams, and more. We control the process of buying properties - our aim is to make sure that all properties are bought at bargain prices, below the market value - we control and/or monitor the renovations and day-to-day activities; we make sure that the properties are kept in good condition; and we organise periodic evaluations. In addition, we have established a corporate and contractual framework that facilitates the trading service; have created SPV’s (Special Purpose Vehicles) that own the properties or shares in other SPV’s that own the Properties ); we have ensured that investment transactions can be done easily through our online platform, and more. What regulation and legislation do we comply with? Realtybundles CFP Ltd., is a company incorporated under the laws of England and Wales under company number 10836225 having offices at: 27 Old Gloucester Street, London, United Kingdom, WC1N 3AX. Realtybundles CFP Ltd is an Appointed Representative (reference number 781948) of MET Facilities LLP (reference number 587084) is authorised and regulated by the Financial Conduct Authority. For more information please visit: https://www.fca.org.uk/firms/appointed-representatives-principals
Roles & Responsibilities
Role of RealtyBundles? RealtyBundles Ltd. is the global ultimate parent and operator of this business. It is responsible for creating the structure of the companies, the framework and the business model of the service. RealtyBundles Ltd. creates linked companies and engages third party companies to increase the success of business. RealtyBundles Ltd. Is also the sole owner of RealtyBundles CFP Ltd., which operates and runs the crowdfunding platform. RealtyBundles Ltd., as a Corporate Director of the business, is authorised by the first SPV on the platform and its shareholders to manage the SPV on their behalf and shall fulfil all tasks and obligations regarding the management of the SPV. Role of RealtyBundles Crowdfunding Platform (CFP)? CFP has been nominated by Realtybundles Ltd. to operate and develop and conduct the promotional activities related to investment opportunities on this website. CFP will maintain each investor’s investment account via the website, where they can manage their operations and control their investments. CFP will also maintain an account for the management of each SPV’s interests on the Website, to be operated by RealtyBundles, unless agreed otherwise. Other accounts for third parties, such as real estate agencies, and real estate experts may also be created and maintained by CFP. Role of investors?Investors are at the top of the hierarchy, and enjoy full freedom to select the property bundles of their choice, according to their preferences and investment interests. Investors have full access to manage their accounts, and buy and sell their shares in the property bundles.
What are Bundles?The main, innovative idea of the RealtyBundles service is the concept of property bundles, or Bundles. Bundles are a logical set of real estate assets, grouped together for the investors as a single investment package. Bundles contain properties brought to the platform and managed by local real estate agencies. Bundles can be as small as a single property or as large as hundreds. A Bundle can have certain characteristics such as specific or diverse locations, commercial or residential, long or short-term rentals, historical buildings or new buildings, or a mixed nature and much more, providing investors with diverse investment options in a single investment vehicle. The real properties associated to a property bundle are owned by the SPV’sWhat benefits do Bundles provide to investors?When investing in a Bundle, there is much less of a single point of failure, and exposure to a dynamic asset class as each Bundle grows and shrinks based on market demands. Management of a Bundle is more efficient, saves investors’ money, and provides higher liquidity to investors. At any given time, properties can be sold, and better ones bought and renovated in order to create value for investors. How properties are selected to Bundles?We analyse profitability of the real estate market trends worldwide in terms of yields. For evaluating a property’s value, prior to purchasing, we engage with certified expert groups, who evaluate the properties, bringing their own knowledge of the area, the building conditions, and more. We have a defined property selection procedure and criteria for carefully selecting the properties for Bundles. Who provides the letting and management?RealtyBundles Ltd., in its capacity as the corporate director of the SPV’s, together with real estate agencies will take care of properties in Bundles on behalf of the investors, including: day-to-day activities, renovation, letting and maintenance.
Investment Vehicle and Process
What is the investment procedure? As part of the registration process, and to create an authorised account for any person that desires to become an investor, the prospect provides RB with AML/KYC documents (documentation and information we are required to ask for and scrutinize to comply with our regulations); and following a decision by the RB compliance team, is notified on the success of their application to become an investor. Using the platform, investors can browse through and select Bundles of their choice, and the amount of investment. Each investor executes a Subscription Agreement electronically with the applicable SPV, which specifies the invested amount, type and amount of shares, terms of investment, and is executed by the investor and the SPV. The invested money will be transferred to a segregated bank account held with Mangopay (www.mangopay.com) or other custodian provider appointed by RealtyBundles Ltd. After the invested amount is received in the custodian bank account, the SPV will within 15 business days approve or decline the investment. In the event the investment is approved, the SPV will update its register, and send the investor the Confirmation of Share Ownership, and release the investment (after the deduction of the any applicable fees) from the custodian bank account to the SPV’s bank account. What are the AML/KYC procedures? To comply with our regulatory and anti-money laundry (AML) requirements, we are obliged to perform AML and ‘know your client’ (KYC) checks prior to investment. These are a strict requirement, which require the investor to provide us with documents such as a valid passport or ID, proof of address and financial statements. The procedure may take up to 48 hours or more and only after the procedure is successful can an investment occur. What is an SPV? Each SPV is a holding company that is owned solely by investors that have become shareholders in the SPV by investing in it. Each SPV has ownership over the real properties; shares in other SPVs that own properties; or de facto ownership over the real properties by virtue of one or more contracts that secure the rights over real property in favour of the SPV. In addition, each SPV has a services agreement in place with CFP that governs CFPs provision of services to the SPV, including arrangement of investors in the SPV via the Website; and to enable investment promotions of the SPV via this website. What are the investor’s reports?Investors at any time can browse through their investments and monitor the nominal value of the shares they have purchased. Moreover, the investor will be provided quarterly reports on the up to date value of the property bundles and an estimated valuation of the investor’s investment and periodic tax statements. However, RB provides no warranty or assurances as to the accuracy of this information other than as required under the FCA rules. What is Confirmation of share ownership?The SPV will not issue paper based share certificates. The Company will send to each investor an e-mail with a PDF evidencing the shares and the transfer of the legal title of the shares to the investor “Confirmation of Shares Ownership”, in respect of the shares which that investor holds. Every Confirmation of Shares Ownership will specify:
- in respect of how many shares, of what class, it is issued;
- the consideration paid for those shares by the investor;
- that the shares are fully paid;
- any distinguishing numbers assigned to them.
Realizing the Investment
How can investors sell their shares? In the event an investor wishes to sell all or part of the their shares, the investor will send a selling order through the investor’s account on this website. Each selling order will be fulfilled by CFP in the order that it is received. The shares can be either sold to other investors or to the applicable SPV. The SPV will issue redeemable shares, which means that if CFP will not be able to sell shares to a new investor, SPV will buy such shares according to the articles of the SPV and its buy-back procedure. What is normal sale? A Normal Sale means when the Investor wishes to sell any amount of the Investor’s Shares without the additional condition to complete the sale within the Immediate Sale Period of 3 business days. There is no fee for Normal Sale Selling Orders. RB can use only the Liquid Cash for executing Normal Sale Selling Orders. When enough Liquid Cash is available, a Normal Sale Selling Order will be executed. SPV will not sell any of the Properties to enable a Normal Sale Selling Order. What is minimum investment duration? Shares are not liquid in nature, and no shareholder of any SPV is entitled to make a selling order for a minimum of 6 months (180 days) after the signing of Subscription Agreement. What returns will I receive?The returns will vary per Bundle and its level of capital growth, depending on the real estate market - this is reflected in the Home Price Index (HPI). In addition, the rent collected versus the expenses influences the Share Value. The latest annual returns are shown on each Bundle page. Please note, income and/or capital growth are not guaranteed, and investments may result in losses. We strongly recommend to investors to diversify their investments. Does RealtyBundles distribute dividends to investors? Currently, the SPV’s on the website do not distribute dividends to investors. RealtyBundles encourages re-investment of yields into the Bundles providing higher yields to the investors (in particular in its capacity as corporate director of any SPV, where applicable); also, for investments of small amounts we advise against distribution of dividends where wire transfer service fees could make such inefficient. However, in the future, we may support dividend distributions for investments above a certain amount.
Fees and Taxes
What is Investment Arrangement Fees?
- “Investors Service Fees”: For arranging the deals between the Investor and the SPV, Investors are charged by the CFP a service fee at a rate of 2.5% of the Investment plus VAT; and
- “SPV Promotion and Regulation Fees”: The SPV shall be charged a promotion fee, to be paid to CFP at a rate of 3.5% of the Investment plus VAT from any invested money in accordance with the terms and conditions set out in the Services Agreement between RB and the SPV.
- Maximum EUR 4% of the Rental Income plus VAT for SPV Equity management;
- Maximum EUR 4% of the Rental Income plus VAT for SPV Partnership management.
- “Buying and Selling Fee”: Corporate Director will charge the SPV upon the buying or selling of a Property a transaction fee of a maximum of 1% (plus VAT) of the purchase/sale value of the Property (the Property shall be independently valued by a third party certified evaluator appointed by Corporate Director). This fee shall be charged in addition to the any agencies fees, for the avoidance of doubt.
- “Property Renovation Fee”: for planning and controlling large renovations, Corporate Director will charge the SPV a renovation fee for each renovation of a Property in the applicable Property Bundle, at the rate of a maximum of 15% plus VAT of such renovation costs.
What is Share Value? The Share Value is defined as the Property Bundle Share Value of the applicable Property Bundle, divided by the number of Shares. What is Property Bundle Share Value? The “Property Bundle Share Value” means the sum of all Property Share Values for all Properties in the applicable Property Bundle plus the Property Bundle Liquid Cash Value and the Property Bundle Receivables, minus the Property Bundle Monetary Commitments. What is Property Bundle Monetary Commitments? The Property Bundle Monetary Commitments means with respect to any applicable Property Bundle all the monetary commitments the Property Bundle has (including without limitation: tax to be paid, commitments and debts to third parties and sellers, mortgages, loans, leases, fees, salaries, and dividends to be paid to shareholders). What is Property Bundle Liquid Cash Value? Property Bundle Liquid Cash Value means the current amount of cash and other cash equivalents, including without limitation from rents, investments and other profits related to the Properties in the applicable Property Bundle. Property Bundle Receivables means any and all debts owed by one or more third parties to the Company which ultimately benefit the applicable Property Bundle, including without limitation where such debts are not yet due. What is Property Share Value? The Property Share Value means the Property Fair Value minus mortgages, loans, and leases commitments related to the Property. What is Property Set-Up Cost? Property Set-up cost means a fixed value calculated once at the time Property was included into the Property Bundle, and equals the sum of all actual costs paid by the SPV to include the Property to the Property Bundle, after the “Property Market Value” is deducted. The Property Cost includes without limitation the following: purchase price for the Property, tax and transfer costs, renovation costs, legal fees; agency fees; and Promotion and Regulation Fees, and other necessary professional services fees. What is Property Set-up cost Reduction Procedure? Property Set-up cost Reduction Procedure means that only a gradually and reduced over time part of the evaluated Property Set-Up Cost will be accounted as follows. The full Property Set-Up Cost is applicable at the time the Property is included into the Property Bundle, and a linear proportional degradation will be accounted every month after such date, so that after 5 years from the inclusion of the Property into the Property Bundle, the Property Set-Up Cost will be set to zero. What is Expert Evaluation? Expert Evaluation means a property valuation performed by one or more external certified real estate experts chosen by the Corporate Director, and will where necessary reference previous valuations by such real estate expert/s, it being understood that such evaluations will be performed periodically throughout the life-time of the SPV. An Expert Evaluation around the Evaluation Time will be used to determine the market value of each of the Properties in the Property Bundle, it being understood that the applicable Property Market Bundle value is the aggregated Property Market Value’s of all the Properties in the bundle. What is Property Market Value? The Property Market Value is a property valuation performed periodically by one or more external certified real estate experts. What is Property Fair Value? The Property Share Value means with respect to any applicable Property the Property Fair Value minus mortgages, loans, and leases commitments related to the Property.
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