Crowdprop (RF) Ltd is a real estate crowdfunding platform that connects property owners with real estate investors. Our platform provides investors with access to a range of lucrative property investments across South Africa.
Through the use of equity crowdfunding and fractional ownership we allow investors to select which property they want to invest in and enable them to partake in owning a property from as little as ZAR 10 000.
The platform also serves the property owner who is seeking to raise capital on their property or development in exchange for equity in that property. For the first time property owners now have the freedom of selling a portion of their property and maintain ownership in the residual completely debt free.
Crowdfunding is the practice of funding a project or venture by raising small amounts of money from a large number of people, typically via the Internet. It is an alternative source of finance that allows individuals to invest what they can afford into projects or ventures that they find attractive.
Equity crowdfunding allows investors to invest collectively into a venture they find attractive in return for equity in that venture. In the case of Crowprop, investors will contribute to real estate projects that will provide them with ownership in the form of shares (Equity) in that property in return for their funds. There is no debt involved.
Fractional Ownership refers to a method in which several unrelated parties can share in, and mitigate the risk of, ownership of a high-value tangible asset, such as real estate. It is a mechanism that allows the fractional owners to collectively own the underlying asset and is becoming increasingly popular as a form of finance and ownership.
These definitions were in part taken from Wikipedia.
Becoming an investor with Crowdprop is simple and free. Get started by registering an account on our platform and follow the steps required to verify your identity. The process is fast and shouldn’t take longer than a few minutes.
Once you have been verified as an investor you will gain access to a range of property investments. Simply browse our available investments and select a property you wish to purchase that aligns with your financial goals and risk appetite.
After you have selected an investment and determined an appropriate amount to invest, top up your Crowdprop wallet via EFT to the bank details provided and complete your investment. Once your property has been fully funded, you can rest assured that Crowdprop will handle the rest. Watch your wealth grow and realise your property wealth potential with Crowdprop completely passive and hassle-free.
Investors are able to view the status of their investment by logging into their Crowdprop dashboard. They have access to comprehensive details and metrics about their overall investment.
Crowdprop (RF) Ltd allows property owners a new way to monetise their properties. We aim to provide you with an alternative to raise funds on your property compared to the traditional methods of property finance.
For the the first time property owners can choose to sell their entire property or a portion of it whilst maintaining fractional ownership in your property. We offer property owners peace of mind by helping them realise the financial potential of their property through customised and bespoke funding solutions.
As a property owner you can gain access to hundreds of willing investors who are seeking to own a portion of your property. Simply register a profile, verify yourself as a property owner and submit your property details to Crowdprop all through our easy to use platform.
Crowdprop will perform a comprehensive due diligence screening on your property and provide you with an outcome. If successful we will make your property available to our network of willing investors. We will market your property on your behalf and strive to deliver to you the price you want in record time. Our fees are significantly lower than the alternatives that exist today and this we believe makes us an economically attractive option for you.
Crowdprop will provide you as a property owner with a once off due diligence cost that is required upfront and is non-refundable. This cost is determined based on the type of property you wish to list and the extent of the due diligence process. Should your property fundraising campaign be successful, we will refund you this due diligence cost along with the proceeds from your successful capital raise. Should your property not meet the criteria or fail to raise the total amount required, we will notify you of this decision.
You are able to track the performance and status of your property campaign through our intuitive dashboard in real time. Crowdprop will stand as a point of contact between yourself and the investors so that you as a property owner does not need to deal with a multitude of investors.
In order to invest with Crowdprop and browse our investment offerings, an investor needs to verify their identity or the identity of their company. This is known as the FICA process and allows us to know you better as a customer. The verification process involves the investor sharing personal information and documents with us which is required by South African laws and regulation.
The following types of investors are eligible to invest:
- Any individual over the age of 18
- Any corporate entity
Once you have been verified by Crowdprop you will be notified and eligible to invest.
In order to raise capital on your property, Crowdprop requires you to verify your account as a property owner and share certain information about yourself, your company and your property which can be based anywhere in South Africa.
Your property can be either a development or an existing property as Crowdprop caters for both. Crowdprop also caters for residential, commercial, industrial and other types of property.
In order to be eligible you need to provide us with the above information and once we have verified your identity and profile we will contact you and proceed with further discussions.
At this point in time we do not cater for properties outside of South Africa but we intend to offer international property in the foreseeable future.
The structure Crowdprop has chosen to adopt is one that provides investors with complete transparency and ensures that their funds are safeguarded.
Each property is purchased and owned by a SPV (Special Purpose Vehicle) Investment Company. The sole purpose of this SPV is to house the property and Ring-Fence all incomes and expenses relating to that property as well as provide ownership to the shareholders of the SPV. Each investment property is housed in a separate SPV Investment Company for the purpose of ensuring that no one investment may negatively impact on another. The shares of one SPV company differs to the shares of any other to ensure ownership specific to a certain property investment.
Shares in a SPV Investment Company are assets and are wholly owned by the investors who have chosen to invest in that property. The shares of the SPV Investment Company will always be owned by the investors who are the ultimate beneficial owners of the property.
This structure has been employed to safeguard investor funds and provide fractional ownership. The structure also provides significant tax benefits for the investor.
The primary purpose of FICA (Financial Intelligence Centre Act) is to assist in the identification of the proceeds of unlawful activities; combat money laundering; and combat the financing of terrorist and related activities.
FICA aims to ensure that financial institutions know their customer and therefore Crowdprop is required to obtain the following documentation from you as set out in the act.
- Certified South African ID Document or Valid Passport
- Certified proof of residence
- Income tax number (optional)
- CIPC Documentation
- Company proof of residence
- SARS proof of tax number and VAT number (if registered for VAT)
- Certified Directors ID Documents
- Certified Directors Proof of Residence
In addition to the above requirements, property owners are required to provide the necessary information on their property that Crowdprop will use in the due diligence process and determine the viability of your property as an investment to be offered on our platform.
An SPV is simply a separate legal entity that is registered with CIPC (Companies and Intellectual Property Commission) as a private company.
In South Africa there is a limit to the number of owners a property can have. In order to accommodate a multitude of investors, Crowdprop has made use of a SPV structure to cater for as many investors required to invest in a specific property.
The SPV then makes an investment on behalf of its shareholders by purchasing the property. The title deed of the property is registered under the name of the SPV, however the shares that you will receive as an investor will entitle you to ownership in the SPV which in turn gives you ownership in the underlying property investment.
Each investor will own a proportionate share in a specific property via the SPV company. The returns earned on a property will be issued from the SPV company and you will receive a share of these returns in proportion to your overall ownership in the property. Returns are issued as dividends on the shares that you hold and therefore provides certain tax benefits.
The returns calculated are based on the rental incomes of the property less the property related costs. These costs include but are not limited to, utility and service charges, repairs and maintenance, management fees and SPV administration fees.
Crowdprop provides investors with estimates of the expected returns of a property upfront before they can invest. These estimates are based on past and relative performance and is not an accurate indication of future performance or guaranteed in any way.
Crowdprop aims to provide investors with a real world experience of owning property but does so in a manner that is passive. Like any investment there are real world risk factors that exist and we strive to minimise those risk factors as best as possible by actively managing the investment properties we offer.
Crowdprop does not provide investment or financial advice. As part of our investment offering we will provide you with the tools necessary in order to make an informed investment decision.
Property as an asset class is a medium to long term investment and the reason for this is so investors can benefit from both capital and rental appreciation.
Each investment listed on our platform will state an investment term. At the end of this period the property will be sold and the proceeds from this sale will be distributed according to your proportionate ownership as an investor. Investors may choose to vote at this time to not sell the property and continue to own it collectively until such time that they decide to sell the property.
During the investment term it is not possible to sell your shares through Crowdprop at this stage, however we are working on a secondary market to allow this option to provide investors the opportunity of an early exit. Investors are able to at this stage, find a willing buyer of their shares privately and Crowdprop will assist in the process of transferring ownership of said shares.
CrowdProp will periodically provide independent valuations on each and every property that we offer on our platform. This will in turn allow investors to be able to determine whether their shares have appreciated in value or not over the course of their investment term.
Crowdprop makes use of independent and certified property valuators to ensure that you as an investor receives an accurate and unbiased valuation of your property investment.
To ensure the safety of investors funds and attractiveness of investments offered on our platform, Crowdprop screens each and every property against our strict due diligence model before it is made available for investment on the platform.
As part of our screening process we put every property to the test to ensure that only safe and attractive investments are offered to investors. This process consists of the following:
- Background checks on property owner and property
- Physical Evaluation
- Financial Evaluation
- Legal Evaluation
- Internal Evaluation
- Investment Feasibility and Structuring
Crowdprop makes use of a team of external and independent experts in determining the viability of a property investment to ensure an unbiased and informed investment offering. The team consists of independent and experienced individuals such as valuators, estate agents , legal practitioners and conveyancers etc.
The due diligence model ensures that only quality properties are made available for investors and it is important to note that from the large amount of properties screened only a small portion of viable property investments are successfully listed on the platform.
Each investment property is managed on an individual basis. As part of the SPV administration service that Crowdprop provides, it is our duty to ensure that each property is appropriately managed in an efficient and cost effective manner.
Crowdprop and its associates are responsible for appointing an experienced and capable property management company to ensure the smooth running of the property and its cash flows. In most cases this management company will consist of an independent third party management company. In other instances the management of the property will be done by the property owner, in the case where the property owner is capable of providing this service. As part of our due diligence process we will investigate the property owners ability to manage the property effectively to ensure investments are not at risk.
Regardless of who is managing the property, Crowdprop will have contractual agreements in place between the SPV company and the managing agent outlining the scope and nature of the management service relating to the property. The management company will be paid form the rental incomes of the property and this information will be disclosed to you as an owner of the property.
Management services shall include but are not limited to, advertising, tenant management and acquisition, maintenance and repairs as well as collection of rentals etc.
Crowdprop (RF) Ltd is registered as a public company for the purpose of being able to raise funds from the public and issues the public with shares in return for these funds.
Crowdprop (RF) Ltd is a subsidiary of Crowdfin (Pty) Ltd which is a juristic representative of ELA Asset Management (Pty) Ltd, an authorised financial services provider (FSP number 49010).
Crowdfin (Pty) Ltd has a management agreement in place with Crowdprop (RF) Ltd for the purpose of regulating and overseeing activities within Crowdprop and specifically with regards to investments offered. Being a juristic representative of ELA Asset Management (Pty) Ltd, an authorised financial services provider, Crowdprop (RF) Ltd’s activities are governed by the FSCA (Financial Services Conduct Authority). The FSCA is the regulatory authority in South Africa that governs financial services and products.
Being a public company we are required to disclose all financial information relating to your investment and in addition we are also required to be independently audited. All financial information is made available to you as an investor and Annual Financial Statements are made available on request from our offices.
We operate with complete transparency and are committed to ethical standards as outlined in the Companies Act 71 of 2008 and King IV report for corporate governance.
During a fundraising campaign, before an investment can be fully funded and realised your funds are kept in trust with our banking partner in segregated accounts held in your own name. These funds are not utilised by Crowdprop in any way until such time the funding goal has been realised and we gain permission from you as an investor to proceed with the purchase of the property.
The Ring-Fenced structure we have adopted provides additional security in the sense that no risk from any other property investment can affect your property investment and vice versa. The structure also ensures that cash flows from one property cannot be mixed with that of another and no property can be used as security for another.
Crowdprop has taken every step necessary to ensure that investors funds are well taken care of and secured. We pride ourselves on safety and security and provide you with peace of mind at every step of the way.
Crowdprop (RF) Ltd does not negate any of the real world risks involved in owning a property yourself by means of an outright purchase without a bond facility.
We do not guarantee any of the expected returns advertised due to a number of varying factors. Some of the risks involved in property investments can be found below:
- Variable returns due to vacancy loss, negotiated lower rentals, tenant defaults, maintenance and repairs. Due to these factors it is possible that rental incomes are lower than expected and investors will receive a lower return than stipulated.
- Property investments are speculative and the property market can rise as well as decline. Rental income can change from time to time and valuations of properties can change as a result of macro and micro-economic factors. Real estate is cyclical as with many asset classes and can increase or decrease in value as a result.
- Forecasts and past performances are not an accurate indicator of future performance.
- A decline in property valuations can be as a result of various reasons such as the wider economy weakening or problems with the property that may require an injection from future cash flows.
- Legal, political and economic factors can negatively impact on property values.
- Investors may lose their capital or a portion of it, incur costs or experience delays in winding up their investment.
Other risk factors specific to crowdfunding include:
- Investors will not own the property directly but rather by means of owning shares in a SPV investment Company that owns the property. These shares are not easily traded and are regarded as illiquid as they cannot be easily traded. What this means is that investors should be prepared to hold the investment for the complete investment term until the property can be sold and proceeds distributed.
- Since property is regarded as a medium to long term investment it is regarded as an illiquid investment. This means that at the end of the investment term it may not be possible to dispose of the property and collect the proceeds immediately. This may result in investors experiencing a delay in receiving their capital or the property being sold at a loss. This depends on being able to sell the property timeously and at an attractive price which may not be possible at that point in time.
Bearing this in mind Crowdprop strives to mitigate these risks at every step of the way. We aim to minimise risk and downside as much as possible on behalf of the investors by selecting properties that are attractive. Our due diligence model addresses all these risks as much as possible to ensure that investor risk is minimised and only quality properties are offered on our platform.
We encourage investors to diversify your Crowdprop investments across multiple properties. This will safeguard your property portfolio against excessive exposure to any one property that could incur negative risk factors.
Real estate as an asset class is considered an attractive investment due to its dual-yielding characteristics such as capital appreciation and rental yields. It is also attractive because it is tangible and appreciates in value over time. The tangible aspect is important as no matter the circumstances there should always be a residual value in the physical asset should any issues occur.
Investors are encouraged to individually asses the risks involved at the outset of the investments based on their appetite for risk and seek independent financial advice if necessary.
We do not provide financial advice and any investment decisions made are made by the investor and not Crowdprop (RF) Ltd or its associates.
Investors can invest from as little as ZAR 10 000 unless a specific investment requires a larger minimum amount to invest.
The maximum investment amount will depend on the outstanding balance of a specific investment’s fundraising target.
An unsuccessful raise occurs when there are not enough funds raised by investors to fulfill a property purchase. If this happens the investment will lapse and all funds raised will be returned to the appropriate investors less any transaction fees.
The property owner will be notified of the unsuccessful funding campaign and the investment will not be offered on the platform. The property owner will not benefit from the campaign.
In this case Crowdprop will not earn any fees on funds raised as the capital raise was unsuccessful.
Crowdprop specifically utilises equity crowdfunding and does not invest in debt or interest bearing investments. All funded accounts held by investors with Crowdprop will not partake in any interest-related returns.
We only invest in free-hold investment properties. If there is a property that has a registered bond on it or is pledged as surety, we will ensure that the bond is settled in full and the property is free-hold. This ensures investors peace of mind and reduces risk on the investment as a whole.
Crowdprop ensures that all investments offered on our platform are completely Shariah compliant.