If you’re looking to invest in French, Belgian and Swiss real estate, you can take a look at Raizers.
The French market is one that has been in constant growth for the past decade, so it’s quite a solid market.
While Raizers also operates in Belgium and Switzerland, there is currently more demand in French for borrowing. This is mostly due to the fact that real estate development deals are structured in France versus Switzerland. Nevertheless, we should be seeing opportunities in other countries too when the conditions are right. So if your aim is to geographically diversify your real estate investments, you should still consider Raizers.
I interviewed the CEO of Raizers, Maxime Pallain, on my podcast Mastermind.fm. There are a lot of gold nuggets about real estate crowdfunding in general, so I highly suggest listening to that episode if you’re interested in this space or Raizers in particular.
Raizers’ Founding Story
Associated in the creation of a first company in 2012, Maxime Pallain and Grégoire Linder encountered difficulties in finding financing. After five refusals from banks, the sixth agreed to finance this company which has moreover become a success.
Following this experience, the two founders wanted to respond to this difficulty of access to financing by launching a platform that could remedy this difficulty of finding equity capital. This is how Raizers was born in 2014, bringing together companies and investors, allowing individuals as well as professionals to lend to real estate developers, thus providing access to investment opportunities previously limited to institutional investors.
A little later, in 2018, Raizers specialized 100% in financing real estate developers and property traders.
Since its accreditation in France by the AMF (Autorité des Marchés Financiers), Raizers has opened offices in Switzerland, Belgium and Luxembourg.
Today, Raizers registers more than 90 million euros invested with an average return of 10% and a default rate remaining at 0%, on more than 140 transactions.
The vast majority of investment opportunities are in France, so we can say that this country is the current focus of Raizers. There have been other opportunities in Switzerland and Belgium, as well as Martinique and Guadalupe.
Raizers, on the one hand, provides the web platform and attracts investors, while on the other end establishes good contacts in the markets it operates in to find property developers and property projects that the team believes offer a good return at a minimal level of risk.
The minimum investment amount is €1,000. While others have criticized this limitation and see it as a con for this platform, I think it is a low enough limit. It simply does not make sense for investors to invest less than €1,000 in anything in my opinion. Many of the investors who do invest lower amounts tend to be less financially savvy and should be spending their time amassing a bigger investment pot through side hustles, their main job, or entrepreneurship. When they have sufficient funds they can look at setting aside part of that for investing. I’ve written more about this topic in my post about whether you should invest in P2P lending, and in my other post about FIRE.
The average length for investments is 20 months and the preferred vehicle for investments is short-term bonds. There have been no defaults so far in the five years that Raizers has been in operation.
Raizers does not withhold any taxes for you. You can read more about taxation of P2P lending in my post on the subject.
Phone and live chat support are available in English and French, and I found the support staff to be professional and helpful. No problems whatsoever.
Raizers does not currently provide a secondary market, which is a disadvantage compared to other platforms that offer the ability to liquidate investments early should the need arise.
On the other hand, you probably don’t need a secondary market for investments that are less than two years anyway. When investing in such platforms you should only invest money that you won’t need in a few months.
I have also confirmed with Raizers, that in the eventuality that an investor wants to sell his investments to another investor of his choice, Raizers will have no problem in changing the contract to assign ownership of the investment to the new investor.
Partnership with Capitalium
Recently, Raizers launched with Capitalium, a Swiss-based asset manager and family office, a partnership investment fund to co-invest alongside the crowdfunders in real estate transactions funded on the platform.
The two companies are stepping up their development in a market acknowledging a strong growth in demand, +102% in 2019, demonstrating their ability to innovate for the benefit of their clients.
This partnership seeks to combine the best of both worlds, the one of traditional but innovative finance, seeking alternative and responsible investment opportunities, and the world of fintechs, which brings transparency and simplicity to investor and entrepreneur clients.
Alternatives to consider include EstateGuru, CrowdEstate, iFunded and Rendity. Check out all the real estate crowdfunding platforms I’ve used in my dedicated post on the best European real estate crowdfunding platforms.
If it’s the French market you’re targeting, then I can say I haven’t come across a better option thus far. Most of the platforms are only available to French investors, either legally or de facto by only providing the website in the French language.
Raizers, on the other hand, is clearly focused on the international investor community, which is a big plus for those of us whose French is non-existent or shaky at best. You don’t want to be taking investment decisions when you don’t properly understand the project descriptions, financial documentation and contracts you’re signing.
Raizers has a team of 10 motivated employees and, despite the corona crisis, and considering the crowdfunding constant growth in demand, are seeing a steady growth in their business.
I am monitoring this platform and will be updating this post as the months go by, but in the meantime, please feel free to leave your comments below if you have already used this platform yourself.
One of the few platforms focusing on French real estate, so it’s worth using if you want exposure to that market. It’s been functioning for a few years now with many projects funded, so I think it’s a good bet going forward.
- Good growth for the platform so far.
- High average return of 10%.
- Regulated in France and Belgium.
- Focused on France mostly, so not a good choice if you want to diversify geographically.
- No secondary market.