The property loan with an amount of 1,75 million EUR, located in the very centre of Riga, was crowdfunded in June and repaid by the borrower at the end of November.
The property consists of approximately 80 apartments and 5 commercial premises. The vast property is one of the most valuable and significant areas in the historic city centre, yet impresses not just with its size but also presents itself in historical architecture.
Naturally, the quality of a project stands in the focus of each investor, because the highest return is useless if it never really returns. But it is getting pretty exciting if the quality is as high as the return. While most of the returns on real estate projects in the Baltic States sum up at ~15%, the annual return for Marijas Street was 17%. At the same time, the risk was minimized due to the first rank mortgage and an LTV of barely 68%. As an additional incentive, the borrower was willing to pay a higher return, related to the amount of the investment per investor. Thus, investors could earn up to 21,39% p.a., receiving cash-back payment immediately after funding the project and used the opportunity well as some of the investors contributed up to 250,000 EUR.
Before the sale of the property, the borrower has managed to carry out partly renovation works of the building as well as improvements of the surrounding territory. Only five months after its crowdfunding, the property was sold in a single deal, thus completing the project in full and covering the loan and accrued interests for investors before the set maturity term.
The repayment of loans before scheduled maturity is one of the options that make our platform attractive for developers seeking funding for their projects. We believe that these loan products are attractive to our investors as well even if repayment is allowed before maturity as all our loans are secured and, in most cases, interest rates on our loans are the same or even higher than unsecured loans (especially considering cash-back payments).
The project has once again proved the professional management of all parties involved and proves that big investment sums can be efficiently funded on Bulkestate platform, which benefits both – investors and borrowers.