Crowdhouse experiences

#1

Hello all,

I saw this mentioned in a couple of threads, so I wanted to inquire about your experiences.
Crowdhouse
How do you find it, if you used it?
Would you recommend it as a REIT investment option?

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#2

Another option would be https://crowdli.ch – the min. investment sum (25’000 CHF) is smaller than with crowdhouse.

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#3

My first feeling is that it seems oversold.
How can you expect 6% return on investment on housing in Switzerland when most immofunds are barely at 4% and even pension founds threw their hardly earned cash in investment with 2% return. (Still better than -0.75% by SNB).
The 6% return on investment (roi) is probably without renovation, insurance, real estate tax, administration fees and depreciation due to ageing of the building.
The picture they give is only for the dividend paid but not for increase in value.


The roi of stock is usually much higher than the dividend paid and this gives increase of value of the stock. During the same time the SMI increased in value by 14 % which makes with the dividend 17% over one year.

The last point is the legal frame which seems a bit undefined to me. I refuse to invest in collective investment not approved by the FINMA or which are not compliant with the ucits rules of the EU.

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#4

2-3x leverage with the mortgage that’s how

Yeah, even focusing on dividends alone, it’s also dishonest to compare their leveraged return with stocks’ unleveraged yields.

Direct ownership in land registry, no?

They’re just a commission-driven real estate salesmen and managing company, not a fund.

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#5

There’s yet another option here in Suisse Romande called Foxtone.

The thing is that I am convinced by the arguments put forward, contacted them, asked questions and was ready to invest. Then I saw that the minimum contribution was 50K and that is was is preventing me from “investing” with them.

On the other side, I’m irrationally convinced that there is something wrong and that these people need Swiss salaries, that they have very few projects and that therefore something’s off.

What’s your take on all this?

Yes I can confirm that this is the case with Foxstone because I asked this very same question.

#6

I’m a big fan from crowdhose. I have started following them since 2017 and have been to one of their initial seminars.

I have seen the other options in Switzerland but still belive Croudhouse is the best. They do not get involved on the construction of the property or in the deal, they make money by managing the property and organising the deal.

By investing, yes you get you name on the land registry and you are not investing on the platform. If Croudhouse goes bust you can assign another property manager to the property.

I have not invested so far as we decided to purchase a small apartment for Buy-to-let. Main reason for this is that the small apartment belongs 100% us. There is no potential problems and discussions with co-owners. Also it is easier to divest (sell) if needed. Crowdhouse has a secondary marked since about a year but it was never used, nobody sold yet. So it is untested.

Also, by Crowdhouse it is uncertain what will happen with the property after the 5-7 years investment timeframe. The plan is to sell it but owners can always oppose it.

Another point which I am not clear about is the liability of the loan, if it is only on the property or also on the investors.

In summary, I give Crowdhouse thumbs up and think it is an amazing vehicle. However I prefer to do the first deal (buy to let) on my own. The next may be through them.

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#7

Here a potentially interesting review on Crowdhouse (et al.): https://lebijou.com/insights/crowdhouse-critical-review-risks-and-5-alternatives/.

It certainly explained some of the details to me (noob), such as risks; and also confirms what @hedgehog mentioned above, on incomes “leveraged through mortgage loan”.

p.s. Do not like the oversight of index funds / ETFs at the start, listing the investment options. :slight_smile:


Long story short - based on this article and its summary, now I don’t think I will dip my toes into this instrument. :slight_smile:

In the best case, we will receive about 6% per annum; the income is not guaranteed, and we have our money locked in real estate for 5-10 years without the real opportunity to pull them out. The model is capital intense and also you take a mortgage, that doubles your risks.
Personally, I came to the conclusion that investment in Crowdhouse and similar services don’t provide a fair reward for the risk. During my career, I have been setting up deals that would yield 7% fixed returns (bonds), and also other deals without even buying the real estate but rather leasing it, that would give me up to 21%, and 13% – 18% in average.

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#8

Thx for the link, interesting review!

I think the main issue is not Crowdhouse or not, it’s shared-ownership or not. In that sense I extract from the review more it’s generic critique.

And the generic critique I tend to share. For me one big questionmark is how could you exit such a deal. In good times that might be somewhat easy. In bad times perhaps not so much. In any case that’s a very small market we’re talking about then. It’s not as if you’re selling an apartment or house which is actually of use (you can live in it) - it’s only a fraction of an asset and thus only interesting to other people willing to invest in co-ownership… a small market I think…

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