Descripton

Object overview

Income from the day of placing the investment, well secured rental contract and profitable exit by the end of 36-month period! 

• Category: Rental apartment  
• Total yield: 11.5%  
• Rental yield: 8%  
• Capital Growth: 3.5%  
• Payment frequency: Monthly  
• Collateral: 1st rank mortgage and 5 000 EUR to secure the buyback option  
• Duration: 36 months  

Property 
The residential property for investing is a 3-room apartment, with a total area of 76,1 m2. The apartment is located in the western side of Tallinn, with an address Oja 61-18. The apartment building has 4 floors and was built in 2005. Our apartment is located on the 4th floor, on the left wing of the building, with most of the windows and balcony facing the backyard. The apartment is fully furnished and is in very good condition. The apartment will be rented out to the seller for the period of 3 years, until the seller will buy back the property with a decent capital growth.  
 

Area 
The uniqueness of Haabersti is reflected in its urban structure, most of the territory has a landscape typical of rural areas, covered with single-family houses. The area is valued for its greenery, security and proximity to the sea (900m), as well as its moderate distance from the center of Tallinn. The area's popularity has been boosted by evolving infrastructure, a number of new buildings have been completed, such as shopping malls in the vicinity of Rocca al Mare, and the Haabersti junction has been reconstructed. The Harku lake is located a few hundred meters from the property and the Tiskre stream flows by about 50m from the backyard. 

Investment case

Monthly interest payments – repayment of principal amount together with capital growth by end of the investment period.  

Thel investment property is a residential apartment with a total area of 76,1 m2, at the western side of the beautiful capital city of Estonia - Tallinn. The apartment will be rented out to the seller, who plans to stay renting it for 3 year, until he will purchase back the apartment with premium. 

The fully furnished apartment comes at 1445 EUR per m2, which is -15% below the appraisal report conducted 2020 June. At that price level, the rental contract will yield our investors 8% net income, that will be paid out monthly. Definitely not the best timing for conducting an appraisal report, leaving the COVID19 aside, the appraisal would have been in the range of 140k. All together the discount is solid and we see it as one of the investment opportunities that is possible due to COVID19. It is the first rental property that comes with a 50% reduced entry fee for our investors - 1% instead of 2%. 
 

Securing the 3-year cash flow and profitable exit
Reinvest24 strategy with this property is to maintain the cash flow for the period of 36 months, and at the end of the period sell the apartment back to the seller. The buyback will provide our investors with 10,5% capital growth. We keep 5 000 EUR as a guarantee for the buyback and also for the rental income. In case the 36-month rental contract is violated, the seller will lose the 5 000 EUR guarantee fund as well as the rental deposit. This will also result in the seller losing the buyback option and we will be able to sell the apartment on the open market for higher capital growth than projected. 
 

Acquisition process 
Reinvest Holding company will register an SPV (Single purpose vehicle) company with one purpose - to purchase and operate the particular property. It will be a financially independent legal structure which means that even if one property will have financial difficulties, it will not affect other Reinvest24 projects. Also, the platform risk is minimized, as in a very unlikely scenario where the platform goes bankrupt, it will not have any effect on the property and your investments will still be safe.  

After making the notarial reservation, we will be making weekly payments to the seller, so that the investors will start earning from the day of placing the investment. The SPV will be the legal owner of the property and will pay out all the profits that it makes back to the platform which will be distributed accordingly to all the property shareholders.