Real estate projects financed through Walliance must comply with certain parameters, which are set out below as general criteria. Due to the specificities of each project, Walliance reserves the right to apply greater or lesser margins of flexibility.
In each project tab on Walliance website, investors can find specific information to perform their due diligence easily.
What are the general evaluation criteria?
1. The developer
As a first step, an analysis is made of the operator developing the operation. Several factors are considered at this stage:
background of the Issuing Company, in order to verify the existence of any outstanding disputes or other elements of concern in the past;
experience in the real estate sector and, in particular, in projects similar to the one proposed;
references obtained from lenders, investors, or other stakeholders of the operator.
2. The market
The market in which the real estate transaction is located is a further criterion for analysis. Several factors are considered.
Demographic data of the area in which the operation is developed, such as total population, average income, number of transfers, etc..
Economic trends of the real estate market in that specific area, by analyzing the trend of sales prices and the trend of transactions.
Market comparables are then examined, i.e. transactions that are similar and comparable to the potential property investment.
Real estate projects in prime locations are preferred.
3. The asset
Another key factor is the quality of the asset to be developed, examined in terms of the adequacy of the work plan and the business plan. The quality of the property or asset is considered, including its current physical condition and the proposed business plan or spending plan.
In addition, the real estate team physically visits the site of the intervention to confirm the location of the property, the characteristics of the building, and the conditions specified by the Issuing Company.
4. The investment
At the final stage, the proposed investment agreement is examined, sometimes revised to ensure that it meets legal requirements and incorporates any clauses safeguarding the investment.
The amount of the funding must be between € 1,000,000 and € 8,000,000, depending on the European country in which the Company has its registered office. The maximum amount that may be financed in any case may not exceed 200% of the risk capital contributed by the Issuing Company.
Real estate projects that are able to distribute a gross annual return equal to or greater than 10% of the capital contributed through the equity crowdfunding campaign, over a period of time between 6 and 30 months, shall be evaluated. The operation must be able to generate a return of at least 30%.
The financial structure of the operation must generally respect these criteria:
30% to 50% of the project's financing needs can be covered by a credit institution;
the entrepreneur must commit 20% to 40% of the capital needed to finance the project;
approximately 30% of the capital required can be financed through Walliance.