Real estate crowdfunding with a great risk/return ratio and exposure to one of the top real estate markets
|Total Investment Volume||€90m+|
|Average annual interest||10%|
|Who’s eligible to invest||Any physical or legal entity|
|Investment Type||Real estate loans and equity|
|Auto Invest Function||No|
|Website Language||English, French, German|
PROS & CONS
- Regulated and transparent
- No defaults and high returns
- Exposure to a top real estate market
- High minimum amount
- Limited diversification
- No secondary market
- Supervision by higher authorities is always good news for investors as it provides an extra layer of control and protection. Raizers is regulated both by the French Financial Markets Authority (AMF) and the Belgian Financial Markets Authority (FSMA). But it also does a good job in keeping investors informed about their internal processes such as due diligence as well as frequently updated data on projects’ performance indicators.
- From the available statistics, we can learn that not a single loan has defaulted in the six years the platform has been in business, and only roughly 1% of the total interest repayments have been delayed for more than six months. At the same time, the annual ROI of around 10% is more than decent given the, so far, brilliant repayment stats.
- French real estate is booming. Paris in particular is consistently ranked in the top three real estate markets in the world (next to New York and London). In 2019, it was labelled “the top city in the world for cross-border real estate investment” by JLL. Putting some of your money in it is probably not a bad idea.
- The minimum investment of €1,000 can be scary for investors who just want to put some pocket money aside and are used to the usual €10 threshold set by most P2P lending platforms. It has to be said, though, that real estate crowdfunding plays by slightly different rules, and Raizers’ terms are actually among the softer ones – many REC platforms require much higher initial investments.
- The French/Parisian real estate market is potentially a great exposure. However, if you wish to diversify across different locations or asset classes, you won’t find much on Raizers. Although from time to time you can spot some projects from Switzerland or Belgium, and even from more exotic locations – Martinique and Guadalupe, the large majority of investments are based in France. There aren’t that many of them, too – over the six years of existence, Raizers has funded just over 130 projects, and at the time of writing, there are only two deals open for investors.
- No secondary market means you have to hold your investments until maturity. Combined with a high (compared to P2P lending) minimum investment, you should think twice before you decide. The average borrowing period is less than two years, though, so you will not have to wait for eternity.
Who is behind Raizers?
Raizers’ team is everything you’d expect from a FinTech management – a blend of youthful energy and experience in entrepreneurship, finance and, in this case, real estate.
The company has been growing steadily, increasing the number of projects available to investors and total funding volumes every year and opening offices in Switzerland, Belgium and Luxembourg along the way. Lately, Raizers has sought partnerships with other investment and crowdfunding companies. In spring 2020, they teamed up with Capitalium – a Swiss wealth management fund, to launch a European investment fund dedicated to real estate development. Later that year, they joined EvoEstate as a new loan originator – one of the few that have been graded at A level risk.
What does Raizers offer?
On Raizers, you can invest in two types of deals:
- Loans: You lend money, in the form of a bond, to real estate developers and property dealers in exchange for interest;
- Equity: You participate in the purchase of real estate through dedicated investment companies.
Real estate loans last from 6 to 36 months, and most are repaid on time, with only a few exceptions in Raizers’ history thus far. Equity projects probably need more time before one can make a definite judgment on their performance. Until now, almost €14 million has been raised for 31 equity deals – five of them have been successfully exited and seven defaulted.
How much can you earn?
The yields vary from 6 to 12%, and the ROI has been stable over the years, oscillating around a decent 10% annual return on Raizers.
Who is Raizers best for?
Higher than on traditional P2P lending platforms investment thresholds, the lack of a secondary market and a buyback guarantee make Raizers more suitable for more experienced investors with bigger P2P investment portfolios. If you are one of them, Raizers offer a great risk/return ratio and exposure to one of the top real estate markets in the world.
The platform’s niche focus, a limited number of deals and little diversification opportunities make it ill-suited for beginners and one-platform investors. However, if you do wish to include Raizers’ deals in your portfolio but lack the capital or require more liquidity, you can invest in their projects via EvoEstate. Evo allows you to invest as little as €100 and sell your investments on the secondary market in case you need to exit before maturity.
How to invest on Raizers
Raizers makes it even easier than usual to set up an account – you can register via your LinkedIn profile. Once you’ve done that, you can start browsing the available deals – there’s no auto-invest function available, but with only a few projects available at a time, there’s really no point in having such a function either.
Once you pick a deal to invest in, you need to go through a couple of steps:
- Complete your profile by specifying your address, nationality, country of residence and providing your IBAN.
- Prove your identity by scanning an ID card and providing proof of residence.
- Complete a suitability test to determine whether your investment project is relevant to your investor profile.
- Sign (digitally) the agreement and transfer the money.
You can then follow up on your investments via a dedicated interface for each project with all the information provided by the issuer.
Raizers has proven itself as a stable and reliable platform with good returns and an impressive zero default rate on its loans. Its exposure to the French real estate market should be considered a pro, even if it may mean a low number of projects and limited diversification options. In sum, Raizers’ deals can be a great addition to any P2P investment portfolio – either invested in directly or accessed via EvoEstate, which offers somewhat softer investment rules (a secondary market and a lower minimum investment amount).
At P2PMarketData we are dedicated to providing unbiased reviews of peer-to-peer lending, real estate crowdfunding and crypto lending platforms. Among other, in our mission to bring more transparency to the market we closely monitor and track over 70 platforms funding volumes.
When reviewing an alternative investment platform, we consider a variety of factors such as:
- Number of investors
- Minimum investment requirement
- Historical annual returns
- Diversification opportunities
- Reinvestment opportunities
- Educational and informational offerings
- Platform fees
- Total capital invested
- Features (such as secondary market and automatic investing)
- General transparency (the difficulty of finding who the owners are, how they make money on the platform (fees), terms & conditions and more)
- Management team
We also look into the company’s online reputation (for example customer reviews, news, complaints, average monthly searches and social media).