Descripton

About the project

Inversity manages a unique investment opportunity in one of the expanding and most profitable districts of Madrid, Tetuán.

Promoted by TLS Europe Capital & Development SL (Investment), this project is located in one of the areas that has been most transformed in Madrid in recent years, the neighborhood of Valdeacederas, which belongs to the well-known district of Tetuán.

The constant project of the acquisition, reform and subsequent sale of a large commercial space and warehouse, which will be transformed into two apartments, one large and one smaller, and two office premises.

For this, the promoter requests a participatory loan of € 518,400 and offers an estimated total return to the investor of 13.07% in a 15-month Planned Term.

In turn, the promoter contributed € 130,585 of own funds for its execution.

The promoter

The group company that promotes this opportunity is TLS Europe Capital & Development SL. (Inversity), a real estate investment company formed by a team with more than 10 years of experience in Real Estate, which aims to provide the best investment opportunities to its clients in terms of transparency and profitability. TLS Europe Capital & Development SL. (Inversity), which currently operates in Madrid and Barcelona in addition to having an office in London, directs its services to the investor who seeks diversification, tangible assets for investment in order to protect their savings with the security and revaluation potential offered by the Real estate market today. The developer offers traditional consulting services aimed at private investors, family offices and other investment companies. The selection of the optimal investment product is based on: profitability, revaluation and exit potential in the sales market.

The building

The property, which will be acquired free of charges and debts, consists of 320m2 built. We will proceed to the purchase, reform and sale of the property that will be transformed into 2 homes and 2 offices. It is a large commercial premises that is expected to change use to be able to build the two houses together to the two offices. The license has already been requested at the town hall and is expected to be obtained during the next six months. The typologies resulting from the project consist of: Ground floor apartment B: 53.40m2 - Hall, bathroom, living-dining room-kitchen Ground floor apartment C: 53.46m2 - Hall, bathroom, living-dining room-kitchen Ground floor office A: 163.14 m2 Ground floor office D: 47,70m2 An added value will be given to the various spaces thanks to the reform of the whole complex with quality materials and the use of space.

The environment 

The environment Valdeacederas is a neighborhood with 150 years of history, forgotten at the beginning by the successive administrations of the capital and their respective General Plans, from 1985 a revitalization plan begins that completely changes its reality, gradually establishing itself as an important part of the new Madrid that is today. His membership in the district of Tetuán puts him in a central area of ​​Madrid, with large construction projects in progress, a lot of land still buildable and a progressive valuation of housing that is making it one of the most demanding neighborhoods in the city. As for its geographical location, it is located northwest of Madrid, 2 minutes walk from the Tetuán Metro station, 10 minutes from Paseo de la Castellana and 15 minutes from Santiago Bernabéu, the Real Madrid football club stadium. The neighborhood has plenty of gastronomic offer, is well equipped with shops, supermarkets and department stores, as well as schools, hospitals and various administrative buildings; It has nearby parks, such as the large Dehesa de al Villa park, which is 1 subway station away, or the Agustín Rodríguez Sahagún park, a 15-minute walk away. Being a neighborhood with 150 years of history, today it maintains its particular idiosyncrasy and its own personality. Given its relative proximity to the M-30 motorway, the neighborhood is easily accessible by car. Other transport options are the bus (lines 49, 177, 124 and 66) or the already mentioned metro (Tetuán (L1), in addition to Valdeacederas (L1), Ventilla (L9), and Plaza Castilla (L10).

The loan

• Product Type: Participatory Loan
• Destination: Purchase, segregation, change of use and comprehensive reform of an office and a warehouse.
• Total estimated return: 13.07%
• Estimated annual profitability: 10.33%
• Estimated term: 15 months
• Type of amortization and interest payment: Due
• Minimum Investment: 500 euros
• Guarantees: Debt Recognition before a Notary and endorsed by the Commercial Property Leases S.L

Market Summary

Since 2016, the increase in the number of purchase and sale transactions in Tetuán has been 60%: one of the most substantial increases in Madrid.

Despite this, the average price per square meter of transactions increased by 14% in the same amount of time, which is a great opportunity for people who want to buy in Tetouan: as demand increases, but not the price of the apartments for sale. This is one of the reasons why 30% of buyers in the district are investors, given the attractiveness of their prices and returns.

Similarly, the increase in the number of transactions position Tetuán as a magnificent district to buy a house due to prices that remain accessible and lower than the average in Madrid. It is a relatively stable district in terms of the supply of apartments for sale: 85% of the total houses to buy are located at a price per square meter between € 3,000 and € 4,000.

In fact, the neighborhood of Valceacederas currently enjoys housing prices 35% lower than the maximum recorded in 2007.

Risks

The investment in this project involves the following risks: risk of not obtaining the expected monetary return, risk of falling prices, risk of not completing the financing, political risk, risk of rising rates, risk of lack of liquidity to recover the capital invested, subordinated nature of the loan (particularly against the mortgagee, in those cases in which the acquisition of the property object of the project is financed additionally by means of loans with mortgage guarantee), risk of total or partial loss of the invested capital and risk of fraud.

• Risk of falling prices: That the price of the property falls due to the increase in supply or decrease in demand in the area. There may also be a general fall in property prices due to many factors.
• Mitigation: The promoter knows perfectly the dynamics of the market and his team is formed by professionals with extensive experience in the sector. Your knowledge and know-how allow you to identify and anticipate price trends, anticipating the market. There is an appraisal of the property and sometimes a market study is carried out.
• Liquidity risk: Unable to find a buyer when you want to sell the property.
• Mitigation: The sales team knows the dynamics of the market and is structured with a team of partners in intermediation services to reduce this risk.
• Risk of rising rates: Increase in the cost of financing in the purchase of real estate (mortgages). What would push down the demand of the housing market
• Mitigation: The most reputed economists expect the European Central Bank not to raise interest rates dramatically this year. And the rise that will be implemented in the future will be very slow.
• Political risk: What happens if political instability grows during this year.
• Mitigation: Being an asset located in a very consolidated and exclusive area, it does not influence frontally, allowing to reduce this risk significantly.
• Risk of not completing the financing: What happens if the investments do not complete the entire objective of the opportunity in the planned time.

Mitigation: Mitigation: StockcrowdIN executes a risk analysis of both the promoter and the opportunity. It is studied that the promoter is up to date with AEAT and TGSS and is not registered in the R.A.I. Likewise, it is studied that they have not registered information about the Public Administration's claim, nor lawsuits and that the company deposits its accounts regularly.

Fraud risk: It should be noted that there may be a risk of fraud due to improper use of the money obtained for the project. There may be fraudulent use of money from any real estate transaction.

Mitigation: In response to the Law on the Promotion of Business Financing 5/2015, StockcrowdIN requests a criminal record and an Honorability Test of the administrators and shareholders with high participation in the companies that execute the project. Also, explain that until the participatory financing campaign is completed, the promoter does not have the funds when going to an escrow account where he does not have access. It is also required that every two months, the promoter informs about the use of money and therefore the evolution of the project. You are also required to keep an analytical accounting of the project and separately.