Crowdfunding platform on real estate launched

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    Promising returns of between 6 and 10 percent in investment opportunities in its portfolio, the first real estate-related crowdfunding platform Flint has launched officially launched in the Philippines.

    Flint said in a statement it currently has three properties in its portfolio, valued at P6 million which it allows investors to invest part in for as low as P1,000.

    Flint, supported by real estate property listing site Signet Properties, has partnered with SeedIn and ReMAX Philippines for the platform that aims to provide “real estate investment opportunities for first-timers on a budget or investors who like to diversify their investment capital.”

    SeedIn is the largest business financing platform in Southeast Asia, facilitating over P7.3 billion worth of funds, according to Edison Tsai, company executive director.

    Andre Mercado, Signet Properties chief executive officer, said Flint distinguishes itself from other crowdfunding platforms through its pre-funded investment opportunities.

    Traditionally, crowdfunding platforms require all investors to achieve an aggregate amount to fund the investment of a real estate property, Mercado said.

    “Most of the time, it takes a while for the funding to come through. In some cases, funding may not come through at all,” Mercado said.

    He added: “At Flint, we have pre-funded all real estate properties in our real estate portfolio. This means users can quickly purchase a share of the real estate property (or more) regardless of whether or not total Flint user investment has reached the investment amount of the property selected. Moreover, pre-funding the properties allows Flint to secure higher interest rates and accelerate investment closing so users can earn the interest quickly.

    Mercado said the platform allows small investors to participate investment opportunities that provide high returns.

    Flint’s launch follows the release of rules covering crowdfunding mechanism by the Securities and Exchange Commission (SEC) in July.

    Crowdfunding, as the means by which start-ups and small and medium enterprises (SMEs) typically tap for alternative funding instead of the usual financial channel like bank borrowings, must be down through authorized intermediaries, according to the SEC.

    The SEC said a crowdfunding intermediary must be registered with the SEC, and may also be a registered broker-dealer, an investment house or a funding portal.

    The SEC also said that funds to be raised through crowdfunding will be capped at P10 million within a 12-month period, for offering that is sold to the public. If the fund raising is offered to qualified investors, it is capped at P50 million.

    Investors buying into crowdfunding activities meanwhile can buy up to 5 percent of their annual income, for retail investors who have an annual income of up to P2 million. For retail investors who have an annual income of more than P2 million, they can invest as much as 10 percent of their annual income.

    The SEC meanwhile said a crowdfunding intermediary’s portal is prohibited from offering investment advice or recommendations; solicit purchases, sales or offers to buy the securities displayed on its platform; compensate employees, agents, or other persons for such solicitation or based on the sale of securities displayed or referenced on its platform; or hold, manage, possess, or otherwise handle investor funds or securities.

    “In addition to its application to register as a CF intermediary, a funding portal must also submit an application to register as a funding portal to the Commission (a funding portal will be asked to provide additional requirements),” it said.

    “A CF intermediary must, at all times, maintain a capital amount that exceeds its annual operational expenditure constituting all expenses and losses that arise in the CF intermediary’s normal course of business facilitating the offer or sale of securities,” the SEC added.