Equity participation
The investor holds a direct or indirect equity interest. The outcome generally depends on project performance after costs and according to the rights granted. Exit may take longer than expected.
Participatory finance
Real estate crowdfunding in Switzerland.
Real estate crowdfunding brings several investors together to finance a transaction. The term covers different structures, including equity participation, participatory lending and investment through a dedicated vehicle.
Understanding the legal and financial structure is essential because it determines investors' rights, the source of their return, their ranking and the exit terms.
Definition
Collective financing, several models.
Real estate crowdfunding connects a project sponsor with several investors. The platform facilitates the journey and access to information, while the investment's economic nature depends on the chosen structure.
Participatory loan
The investor lends to the project entity under a contractual rate, term and schedule. The borrower may repay late, only in part or not at all.
Investment vehicle
A company or another structure may pool investors. Its fees, governance, voting rights, distribution mechanics and exit rules must then be understood.
How it works
From project review to investment monitoring.
1. Presentation and assessment
The project is presented with its sponsor, budget, schedule, financing, strategy and risks. Investors should test the assumptions against the available documents.
2. Subscription
After the identity and suitability checks required by the process, the investor selects an amount within the offer limits and accepts the applicable contractual documents.
3. Execution and monitoring
Funds are allocated according to the structure. The project then remains exposed to technical, commercial and financial developments. Reporting does not remove potential illiquidity.
4. Exit or repayment
Capital recovery depends on the planned mechanism: asset or share sale, refinancing, loan repayment or distribution. The target date may be exceeded if the project is delayed.
Comparison
Crowdfunding or direct property ownership?
Participatory finance may reduce the amount committed and delegate part of the execution. In return, the investor does not control the transaction like a direct owner and often has less liquidity.
Amount and diversification
The threshold varies by offer. When lower than the equity required for a direct purchase, it may make it easier to spread capital across several projects, without ensuring sufficient diversification.
Return
In an equity structure, returns may come from distributions or capital gains. In a loan, they generally take the form of interest. A stated return must always be linked to its term and risk.
Control and liquidity
The investor follows the framework defined by the sponsor and contracts. Early resale should not be assumed: the actual horizon depends on project progress and exit.
Assessment
Risks and criteria for reviewing a project.
The project and its market
Review the land, permits, costs, contingencies, local demand and sales assumptions. An apparent margin may disappear if schedules slip or costs rise.
The sponsor and financing
Assess the developer's experience, equity, other commitments and the consistency of bank and participatory financing. Identify who bears first losses and the order in which creditors are paid.
Documents and conflicts of interest
Contracts, valuations, fees and relationships between parties help explain the transaction beyond its presentation. Any information limitation should form part of the decision.
Method
The journey through the S2I ecosystem
S2I directs investors to its specialist platforms. Final terms remain specific to each opportunity.
01Review the project and identify the financing model
02Read the documents, risks and fees
03Complete the required checks in the investor area
04Choose an amount compatible with your personal circumstances
05Follow project updates through to exit or repayment
Frequently asked questions
Key points to understand before investing.
What is real estate crowdfunding?
It is a financing model in which several investors contribute to a real estate transaction through a platform or vehicle. Their investment may take the form of equity or debt.
Do crowdfunding and participatory real estate finance mean the same thing?
They are commonly used as equivalents. Both remain broad terms, so it is important to establish whether the investor acquires equity, grants a loan or subscribes to another instrument.
What is the minimum investment?
It depends on each offer. The applicable amount must be checked on the opportunity page and in its documents rather than inferred from a general example.
Can investors recover their money early?
This should not be assumed. Many participatory investments are illiquid and have no secondary market. Exit terms must be checked in the contractual documents.
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