Description
WECITY complies with Law 5/2015 and with Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European providers of crowdfunding services for companies. It is authorized by the CNMV as a Participatory Financing Platform registered under number 30, with a favorable proposal from the Bank of Spain.
Alto do Monte Properties LDA, requests financing from wecity for this investment opportunity. Investor, before making your investment please read the basic information for the investor client.
Skin in the game: “In compliance with Article 8.2 of Regulation (EU) 2020/1503 of the European Parliament and of the Council of 7 October 2020 on European providers of equity financing, we hereby inform you that partners, managers and employees of wecity may invest in this opportunity. These investments will be made under the same conditions as those of other investors without receiving preferential treatment or privileged access to information.”
The investment
The investment opportunity consists of financing the purchase and refurbishment works of a 3-storey building located at Rua de Santo António de Contumil 247, Porto (Portugal), where a development of 5 dwellings with parking and large common green areas will be developed. The project only requires a license for the transformation of the first floor, where there is a change of use to residential.
The project will be financed through a fixed rate loan of 500,000 €, with a 1st degree mortgage guarantee on the asset.
The developer will contribute €369,607 of its own funds for the purchase of the building and the payment of the fees. This amount, together with the €500,000 requested from WECITY investors, makes a total of €869,607 required for the development of the promotion.
The repayment of the loan to the wecity investors will occur with the sale and delivery of the homes to the end buyers.
Through wecity, you can participate in a fixed rate loan operation with an annual interest rate of 12% for an estimated term of 18 months (6 months mandatory) with the possibility of an extension of another 6 months. The estimated total return is 18% over 18 months (or 24% if the final term is extended for an additional 6 months).
The interest payment + the return of the invested capital will be made at maturity and we will get out when the apartments are delivered to the buyers after the granting of the housing license and the respective final deeds of sale.
With a minimum investment of 500 € and no investment limit, you can participate in this opportunity with an excellent profitability and maximum guarantees.
Investment keys
- Purpose of the loan: to finance the purchase and renovation costs of a 5-unit building at Rua de Santo António de Contumil 247, Porto, Portugal
- Collateral: 1st degree mortgage
- Term: 18 months
- Optional extension: 6 months
- Annual interest rate: 12%.
- Estimated total return: 18%.
- Interest payment: at maturity
- RICS appraisal: 617.300€ | current LTV: 80.99%
- RICS HET appraisal: 1.612.900 € | LTV: 31,01 %
- LTV appraisal First disposal: 66.32%.
- Contributions:
- Developer: 369,607
- WECITY Loan: 500,000 €.
- Minimum investment: 500 €.
- Maximum investment: No limits
- Pre-sales: 0% (0/5 units)
RICS Valuation
The current RICS valuation for mortgage collateral purposes amounts to 617.300€. This represents a Loan to Value (LTV) over the current valuation of 80.99%.
The valuation under the Completed Building Assumption amounts to 1.612.900 €. This represents a Loan to Value (LTV) over the HET valuation of 31.01%.
The first disposal Loan to Value (LTV) is 66.32%.
The independent appraiser in charge of identifying the value is GESVALT, whose corporate name is GESVALT premium, S.A., and which is registered with the CMVM as an approved appraisal company under number PAI/2017/0092.
The project
The project consists of participating in the financing of the purchase of a 3-story building with 5 dwellings and the rehabilitation and renovation works of the same, for subsequent sale, located at Rua de Santo António de Contumil 247, in Oporto, Portugal.
Plans for the proposed rehabilitation of the building
Current condition of the building
Location
Porto, the second largest city in Portugal, has a population of approximately 237,000 inhabitants and covers about 45 square kilometers in the northwest of the Iberian Peninsula. It is known as the capital of northern Portugal and its historic center is a UNESCO World Heritage Site. It is located on the north bank of the Douro River, with Vila Nova de Gaia to the south.
Thanks to its strategic location, Porto has an excellent communications network that connects it easily with the rest of Portugal and Europe. In addition, Porto airport is only ten minutes away by car, providing flights to various international destinations.
As the seat of the municipality and capital of the District and Metropolitan Area of Porto, which includes 18 municipalities with nearly 1,300,000 inhabitants in total and an area of almost 2,400 km², the city is 320 kilometers from Lisbon.
Collateral agent
The constitution, preservation, management, administration and, if applicable, enforcement of the real estate mortgage rights on behalf of wecity investors shall be carried out by an entity external to wecity.
In this case, the appointed Collateral Agent will be the Report’s Collateral Agent.
Monitoring
The promoter must justify the use of the funds in each of the applications. The use of the funds by the promoter will be monitored by a company external to wecity.
Compliance with Regulation (EU) 2020/1503 🇪🇺
Risk Warning
Investing in this crowdfunding project involves risks, including the risk of partial or total loss of the money invested. Your investment is not covered by deposit guarantee schemes established in accordance with Directive 2014/49/EU of the European Parliament and of the Council (). Your investment is not covered by investor compensation schemes established in accordance with Directive 97/9/EC of the European Parliament and of the Council (*). You may not receive any return on your investment. It is not a savings product and it is recommended that you do not invest more than 10% of your net assets in equity financing projects. You may not be able to dispose of the investment instruments at any time. Even if you are able to sell them, you may incur losses.
Pre-contractual cooling-off period for inexperienced investors
Inexperienced investors have a cooling-off period of four (4) days during which they may, at any time, revoke or withdraw, at any time, their investment offer or expression of interest in the equity financing offer without having to justify their decision and without incurring a penalty. The cooling-off period begins at the time the potential non-experienced investor makes an investment offer or expresses interest and expires after four calendar days from that date. To exercise their revocation rights, Investors may send an email to the following address: reclamaciones@wecity.com, filling in the “subject” field of such email as follows: “REVOCATION – Name of the Opportunity – Name and surname of the Investor”. In the event that you have made a monetary contribution linked to the financing offer, said amount will be returned as soon as possible to the wallet that, as an investor/user of the “WECITY” Platform, you have open with the “LEMONWAY” Payment Institution.
Credit risk
Credit risk is defined as the loss that may occur in the event of non-payment by the counterparty in a financial transaction. In this specific case, the risk that the Promoter does not pay the principal and/or interest on the Loan.
Sector risk Risks inherent to the specific sector.
Such risks may be caused, for example, by a change in macroeconomic circumstances, a reduction in demand in the sector in which the equity financing project operates and dependencies in other sectors. In any case the investor should be aware that adverse economic conditions or cyclical changes may lead to a weakening of the Promoter’s ability to meet its financial commitments in connection with the loan.
Risk of default
The risk that the project promoter may be subject to bankruptcy proceedings and other events affecting the project or the project promoter that result in the loss of the investment for the investors. Such risks may be caused by a variety of factors, including, without limitation: (serious) change in macroeconomic circumstances, mismanagement, lack of experience, fraud, financing not matching the corporate purpose, failure to launch the product or lack of liquidity. In the event of insolvency of the Promoter, the holders of the credits will be considered as credits with special privilege, as they are secured by a mortgage guarantee, in accordance with the cataloguing and order of priority of credits established by Royal Legislative Decree 1/2020, of May 5, which approves the revised text of the Insolvency Law (hereinafter, the “Insolvency Law”), except for those amounts that pursuant to Article 272 of the Insolvency Law must be classified either as ordinary credit or as subordinated credit, as appropriate.
Risk of lower or delayed yield
The risk that the return is lower than expected or that the project defaults on the payment of principal or interest.
Investment illiquidity risk
The risk that investors will not be able to sell their investment. There is no active trading market for the loan, so the investor may not be able to find a third party to whom to assign the loan.
Other risks
Risks that are, among others, beyond the control of the project developer, such as political or regulatory risks.
