CrowdProperty Australia has launched a new fund for wholesale and institutional investors to invest in private real estate debt with target interest returns of up to 8.25% p.a. after fees. The new fund invests in property project loans providing Australia’s small-scale residential developers with specialist finance, a sector that is typically underserved by traditional finance.
What are the terms of the fund?
CrowdProperty’s Partner Fund offers investors up to an 8.25% p.a. target interest return paid in quarterly distributions with a minimum six-month investment term. Investments start from $25,000. Investors get a concierge service in on-boarding through a limited power of attorney enabling CrowdProperty to complete the registration process on behalf of investors.
“Our property team originates projects and conducts a rigorous 57-step due diligence process on all loan applications, funding only 4% of applications received,” Mr Ingram said.
“As a first mortgage fund, we’re the most senior debt in the projects. Our portfolio includes projects in major east coast cities and Adelaide and the Partner Fund is spread across all projects meaning it’s diversified by project type, loan term, and geographic location.”
Who else can leverage the fund?
Mr Ingram said the fund was also a way for SMSFs and other investment structures to diversify their portfolio. “Recent data analysing SMSF investments shows that 43% of SMSFs are not diversified enough, going against the guidelines set by the ATO in 2020,” he said.
“Investing in the Partner Fund allows SMSFs to build retirement wealth while maintaining a degree of liquidity as our loans run from six to 18 months,” Mr Ingram further commented.
CrowdProperty launched in Australia in early 2021 and has reviewed over $360m in project loan applications. Its UK sister company was founded in 2013 and has lent over A$428m (£251m) and funded the construction of 2,670 homes worth over A$1bn (£590m).
Target returns, not forecast returns. Terms, conditions, and risks apply.