What does Crowdify do?
Crowdify is an equity-based crowdfunding platform, which raises money from private investors to renovate or design and construct co-living properties. Properties are subsequently rented out by the room while the platform ensures that it delivers steady financial returns to its investors.
This approach naturally offers a more cost-effective budget to people starting out in life or in less well-paid jobs and also addresses the chronic shortage of affordable homes that exists in many parts of the country, with an emphasis on those who make a real difference to the communities in which they live and work. i.e. NHS staff, teachers, utility and food chain workers, transport, police and support staff.
What is shared or co-living?
Co-living housing is perhaps better known in the UK as ‘HMO’s ‘(House in Multiple Occupation), where operators rent by the room to individuals with kitchens and other amenities as communal spaces.
While co-living represents the next generation of renting it is not a new concept but the market has evolved. Read more here.
What Is Social Impact Investing?
Social impact investing is based on the principle that private capital can intentionally create positive environmental and social outcomes as well as financial returns.
Crowdify focusses on turning investment funds into innovative and sustainable co-housing projects that are affordable with the intention of generating a measurable social impact, while producing financial returns for investors.
This is different from a grant, which is simply a donation of funds with no expectation of a financial return.
Is Crowdify regulated?
Crowdify is directly authorised and regulated by the Financial Conduct Authority (FCA) under firm reference 650066 to operate as a Property Crowdfunding platform.
What fees do Crowdify charge investors?
Crowdify’s fees are applied in two ways;
- A platform crowdfunding fee capped at 5%, based on the overall project cost which is deducted once the legal process has been completed. This fee also covers the cost associated with payment processing, escrow services and anti-money laundering checks.
- An annual SPV management fee, equivalent to 0.5% of the overall project costs, to monitor and administer the investment on behalf of the investors.
Am I able to invest if I live outside the UK?
Yes, however investors not resident in the U.K. must first satisfy themselves that they are not subject to any local requirements, in their own country, that prohibit or restrict them from doing so. Payments to Crowdify must be made in £GBP, and may be subject to additional bank or card charges. To reduce currency conversion costs, investors may wish to use a foreign exchange broker or service
Why do I need to provide ID documents?
In order to become a member of Crowdify’s investor community, participants must meet current FCA guidelines by completing a short sign-up and onboarding procedure.
Part of the process will involve uploading either a copy of your Passport or Driving Licence and a copy of a recent utility bill (as a pdf, jpg or png file).
What happens when I make an investment?
The Investment Process
Each crowdfunded investment provides accurate and factual information to enable the investor to make an informed investment decision. This input includes clear and accurate descriptions of potential benefits, risks, management structure and exit strategies. Investors may also share knowledge by posting public questions about the offering.
When an investment is made, funds are held in escrow until the funding target has been reached, whereafter they are transferred to a solicitor to complete the legal formalities.
Upon completion investors are issued shares, within the Special Purpose Vehicle (SPV), which owns the property in direct proportion to their level of financial investment.
Participating investors will have access to a personal dashboard to monitor and track their investments.
At the end of the investment term, the property will be sold, assuming it has exceeded the original project cost; shareholders will be paid back the original amount invested, together with a share in the capital growth, in direct proportion to their level of investment. In the event the property is valued at less than the original project cost, investors will decide, via a simple ballot, whether to retain the property or sell at the present value.
What is an SPV?
A Special Purpose Vehicle (SPV) is a UK-incorporated Limited Company and is formed for the sole purpose of holding the underlying crowdfunded property asset.
How do I keep track of my investments?
For our investor’s convenience, we provide 24/7 access to a personalised online dashboard; you can track the performance of all your investments from the ‘Portfolio’ section.
Under the Account section of ‘My Portfolio’, you will be able to see your transaction history. By clicking on your ‘Folder’, updates such as annual bank statements, dividend vouchers, annual accounts and expenditure invoices may be viewed, which will be provided on an ongoing basis.
Furthermore, message alerts will be received when new documents are added.
What if the project fails to reach its target?
Initially, an extension to the funding period of a further 7 days will be applied providing 75% of the funding target has been raised by the original closing date. Funds will otherwise be returned to investors, in full, via the original payment method used.
How are offerings listed on the platform vetted?
While property assets naturally provide an element of loss protection, to reduce the risk further for investors, the engagement process with any new property – irrespective of whether it is being offered by a new or existing partner – is to ensure that the property meets the criteria of the platform’s investment guide.
The due diligence framework utilised is similar to the guidelines used by mortgage companies in determining whether a property is mortgageable. This objective assessment ensures potential offerings meet the minimum standards, in terms of property and construction type, lease length (if applicable), and legal structure.
Properties are then subject to a further rigorous 6-step screening process, whereby the financials (valuation, rental income, operating expenses) are verified to ensure that the proposed opportunity offers genuine value, to investors, and also represents a viable social return.
As a regulated firm, there is a responsibility to ensure that the nature and risks of an investment, and any information supplied, is fair, clear, and in no way misleading.
Ultimately, it is the company’s remit to disclose relevant, accurate information – such as key expenditure – and to ensure investors are not led to believe they will receive returns that are unrealistic. To this end, a full project cost, income and capital growth analysis is provided for each project, together with detailed information relating to the location, management, investment, and exit strategy.
What happens in the event should the platform fail?
Investors retain the legal share of the SPV and the crowdfunded asset held within it. In the event of the platform failing, investors can either self-manage or appoint an alternative representative.
What is Crowdify's complaints procedure?
Clients may report complaints the following way;
Clients must provide;
- Full Name
- Nature of the complaint
To resolve the complaint, Crowdify will;
- Log issue on our Customer Management System
- Advise what will happen next
- Treat the complaint fairly
- Aim to resolve the complaint within 5 working days
- Provide regular updates until the complaint has been resolved
Once Crowdify has dealt with the issue, the company will review the complaint internally, to see what lessons can be learnt.
Clients who are unhappy with the response provided, will be requested to provide further information for consideration. Any client may also contact the Financial Ombudsman Service (FOS) to carry out an independent review of the complaint.
Become Part Of Our Investor Community
In order to become a member of our investor community, you must meet current FCA guidelines by completing a sign-up and onboarding procedure. This process will identify you as a specific type of investor, providing you will full access to our property investment offerings listed on the platform.