certainly be offered to our platform. However, security would still be an important aspect of the offering, and we would request a mortgage bond on an asset.
WHEN FUNDING PROGRAMMES HAVE BEEN SUCCESSFULLY COMPLETED, HOW DOES THE MONEY MOVE?
After a project has been successfully funded, the money is kept in escrow by the Realty Africa Trust. We disburse the money according to the phases of the development( drip funding) to protect investor funds. After each phase we send surveyors to check the building site, the progress and the materials used, before disbursing the next batch of money.
Proceeds due to the investors will flow back to the accounts of the Realty Africa Trust for disbursement.
HOW DO THE COMPANIES OR INDIVIDUALS WHO HAVE FUNDED THE DEVELOPMENT BENEFIT? WHAT RETURNS CAN THEY EXPECT?
It is a coomon misconception that crowdfunding is only for small amounts and non-professional investors. Crowdfunding is a way of democratising investments. In our view it is ideal for local, regional and foreign investors who want more control. You can select the project that you like instead of having to give a mandate to a fund manager.
At the same time, investing in real estate in sub-Saharan Africa is also an ideal way for professional investors to spread risk in an investment class that potentially has higher yield, but may be outside their area of expertise, or in exciting properties and locations that would otherwise not be accessible. It offers an opportunity for African cross-border and multi-currency investments that can be used by investors, investment firms and pension funds to diversify their portfolios. Investors who prefer impact investments can participate in affordable housing or eco-lodge projects.
In other words, property crowdfunding in sub-Saharan Africa offers many opportunities to all kind of investors. We are looking for partners to establish a managed fund or real estate investment trust( REIT) of African real estate when the pipeline grows.
IS CROWDFUNDING LEGAL IN SOUTH AFRICA? IS THERE ANY LEGISLATION THAT COULD HAMPER THIS PROCESS?
Legislation still has to catch up with the dynamics of crowdfunding. Therefore we have found one of the best financial attorneys in the country, Thipa Denenga Incorporated( http:// bit. ly / ThipaDenenga) to assist in setting up. We operate fully within the existing legal structures.
IS CROWDFUNDED INCOME TAXABLE?
Income from crowdfunding is investment income. This is taxable depending on your local tax legislation. See http:// bit. ly / OECD _ tax for more tax-related information.
WHAT ARE THE POTENTIAL RISKS?
Like any other investment, investing in crowdfunding entails risks. These risks vary and depend on the type and duration of the project. We give you an overview of potential risks on http:// bit. ly / investor _ risks. By applying a thorough due diligence process and drip funding with checks, and by offering security through mortgage bonds, Realty Africa is able to reduce the risk significantly.
Realty Africa has a large variety of projects in the pipeline, including luxury apartments, middleincome housing and eco lodges, but there’ s also social housing and student housing.
For more information contact:
CONTACT: www. estate-living. co. za
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