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Fintown Analysis

Real Estate Debt
Real Estate Crowdfunding

Last updated in December 2023.

What is Fintown?

Fintown, founded in 2022, is a platform by the established property development and investment company Vihorev Group based in Prague, Czech Republic. Fintown is a real estate crowdfunding platform. Investors with an EU bank account denominated can participate in property development and rental projects in the Prague region. Since 2023, Fintown has raised more than €2.6 million, averaging a monthly volume of €0.22 million.[1] The platform boasts a community of 1,474 investors.[2]

Key Takeaways

  • Fintown offers two types of loans: property development and rental projects.
  • The minimum investment is set at €50 and interest rates vary between 8% to 14%.
  • The loans contractually to Fintown/Vihorev Group that co-invests and then issues the loans to property development companies of durations from one to 36 months.
  • A secondary market is not available. However, Fintown offers an early investment exit program.

How Fintown Works

Fintown serves as the bridge between crowdfunding investors and Vihorev Group as borrowers in various real estate projects. Investors make loan agreements with Fintown, which then acts as a lender to Vihorev Group. Fintown operates as an investment platform, linking its crowdfunding lenders with real estate companies of the Vihorev Group, its sister company.

Investors can choose between two types of loans: Property Development and Rental products, each at a minimum of €50 with loan duration ranging from one to 36 months. The repayment terms vary depending on the type of loan. For the Rental product, interest is paid monthly, with the loan principal settled at the term's end, while the Property Development product follows a full bullet loan structure, where both interest and principal are repaid in a lump sum at the end of the term. Fintown does not provide an auto-invest feature.[3]

The platform does not have a provision fund or buyback guarantee covering the loans. The loans are contractually to Fintown, which then issues a loan to a developer covered with real estate as collateral. There is no legally established relationship between Fintown's investors and the direct borrowers (Property Project developers), meaning investors cannot make a direct claim against the borrower and are lending money to Fintown/Vihorev Group that holds the loan contract with the real estate collateral. The platform or Vihorev Group co-invests at least 20% of its funds in every deal alongside lenders.[4]

Fintown does not offer a secondary market, but it does have an Early Investment Exit program for investors. To start the process of selling back an investment, investors need to formally contact Fintown. However, there is a fee for exiting early. Investors need to give up any unpaid interests and accept a discount on their principal based on how long they have held the investment. The discount rates are 30% for 1-12 months, 20% for 13-24 months, and 10% for 25-36 months.[5]

Fintown Returns & Fees

Among the two current and 26 completed projects, Fintown offers an interest rate ranging from 8% to 14%. Since its beginning, the platform has funded 26 projects, distributing €41,207 in earned interest to investors. As of November 2023, Fintown has not experienced any payment delays or defaults since its launch.[6]

Fintown does not impose direct fees on investors. The platform does not disclose how it generates revenue, but given that borrowers' loan agreements are facilitated by its sister company, Vihorev Group, it’s safe to assume they make money from the spread or on the real estate development.

Fintown Management

Fintown was co-founded by Maxim Vihorev and Vladislav Siganevic. Maxim Vihorev, who serves as the CEO, is also the founder of Vihorev Group, Fintown’s sister company involved in the Czech real estate scene since 2015. With a presence in the Czech real estate market since 2008, he has been actively engaged in property sales and management in the Prague region. His involvement in residential development dates back to 2014. Vladislav Siganevic is an experienced fintech entrepreneur. Before co-founding Fintown, he played a pivotal role in the consumer lender Creamfinance.

Maxim Vihorev, owner of Vihorev Group, founded Fintown s.r.o. The platform operates under his leadership. It is bootstrapped by the parent company and has not sought any external funding to date.[7]

Special Considerations

Fintown has not shared its financial statements, but the Vihorev Group has provided insight into its total assets since 2015. Over the past five years, the group has reported a Compound Annual Growth Rate (CAGR) of 24.5%. Starting from CZK 400 million, the assets have surged to over CZK 1.2 billion, translating to a Euro increase from €16.3 million to €48.9 million.[8]

In December 2023, Fintown rolled out two new loan options: Rental FLEXI and Early Rental.[9]

  1. The FLEXI product is a short-term commitment lasting one month. After this period, investors receive initial interest and principal. Investors can then choose to reinvest or exit the investment. Throughout the 60-month term, investors have the flexibility to exit the project at any time.
  2. The Early Rental product works like a typical bullet loan, with interest distributed and the principal repaid at the end of the period. However, it offers more than a standard bullet loan by guaranteeing placement in future rental opportunities. These opportunities yield additional returns over a defined period.

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