Club investment
into development projects in Germany
A joint project of Tranio and Exporo
From €250,000, yield 7 % p. a.
About Exporo
What is EXPORO?
EXPORO is an innovative internet platform based in Hamburg. It allows investors to participate in real estate projects through crowdfunding. With the help of EXPORO, even small investors can invest in real estate directly. Previously, mostly only large investors had this privilege.
How many projects has EXPORO conducted? Were they all completed on schedule (on time and with the expected return)?
172 projects financed, €316 million collected and €97.5 million paid. About 90 projects completed. All investors received their money in accordance with their expectations.
How is EXPORO funded?
EXPORO is backed by the developers. All operating expenses are also borne by the developers.
Why crowdinvesting?
Crowdinvesting through Internet brings together many investors to co-finance large projects and generate profits. Due to a significant number of investors, even those who have small amounts of assets get access to a market that otherwise would require much larger investments (usually €1-1.5 million or more).
Why do investors from Tranio get higher returns than investors who go directly to the EXPORO website?
Tranio attracts investors with €250,000 in capital, while for the clients of German EXPORO, the entry threshold is lower. At the same time, Tranio takes up a significant part of work, providing clients with all the necessary information and conducts transactions in a Russian language.
The Investment process
What happens if the platform doesn't gather enough capital to finance the project?
If the required investment capital cannot be raised during the planned period (the target is not reached), then the period may be extended or the developer may agree to accept fewer loans and use an alternative source of funding. Additionally, it is likely that large investors from the EXPORO network will reduce the gap to the target of financing.
How does the platform select, test and evaluate projects and developers?
The main factor to which attention is paid, is the economic feasibility of the project. The project is suitable for investment if it is implemented by an experienced developer, in a growing location and has a good stability (the investor can lose profit only if the price of the property significantly drops during the sale). It is vital to determine whether the developer invests own capital into the project, or takes a loan from the bank and for what amount. Before proceeding with the project, EXPORO analysts check all the criteria mentioned above. For almost 5 years for which platform has existed, neither a single project went bankrupt, nor it allowed any late payment to the investors. The Tranio team, in turn, also analyses projects before offering them to customers, and thus acts as an additional 'filter'. We value our reputation gained over 8 years of work in the market and don't want to risk it. Therefore, we offer our clients only those projects, in the success of which we believe ourselves.
How is the interest rate set?
Investor interest and the offer of participation duration are determined by the borrower - the developer of the project. In the proposal, he or she objectively describes the situation prevailing in the market, the project status and the capital structure. For example, the larger the senior debt and the smaller the subordinated capital, the higher is the percentage offered.
What do I get for my money?
You will invest by providing a subordinated loan to the project company. With it, you enter into a contractual relationship, becoming entitled to a fixed annual interest at an agreed maturity date. You will find detailed information in the presentation of the project and the sample contract, which will be provided upon your request.
How can I learn about the projects?
Submit a request, and together with you, we will select a project that suits you in terms, profitability, budget and other conditions. You will receive a project presentation, and then, if you are interested, after signing an NDA, we will provide you with a sample loan agreement. As an investor, you will regularly (monthly or quarterly) receive information on the progress of work (for example, about the completion of important construction phases or the status on the sale of the apartments).
Financing format
What is the format of financing?
For most projects the subordinated mezzanine loan is used. The term 'subordinated' means that the investor makes profit after the bank (first priority lender), but before the developer. In some projects, the bank is not involved, and investors become first priority lenders.
What responsibilities will I have in connection with participation in such development projects?
Investors don't have any additional obligations, except to provide the amount of investment chosen. In particular, there are no obligations for additional funding. However, in their own interests, the investor should notify us of any changes in your contact or bank details. This is necessary in order to ensure an uninterrupted and timely payment of the principal debt, including interest at maturity.
Am I investing in a real estate fund?
No. With a subordinated loan, the loan can be provided directly to the developer. The loan, including a fixed interest rate, will be returned immediately after its expiration. If for a real estate fund, income depends on the success of fund management, then a subordinated loan is based on a fixed interest rate requirement. You invest in individual projects of which you are informed in detail about, and not in a 'blind pool' of a real estate fund. At the same time you know exactly what your capital is used for.
Return on investment
What taxes will I pay?
Income tax only. For individuals - residents of the Russian Federation, it is 13%.
Can I get my money before the term specified in the contract?
The offer of participation is based on a fixed term. You cannot dispose of the money deposited during the agreed period.
When will my money be returned?
At the end of the project term. If the project is completed ahead of time, the company has the right to pay all the funds up front. In this case, all interest will be charged in advance. Thus, the IRR of your investment will grow.
Security and risks
What will help me better assess the potential project in terms of opportunities and risks?
More than 30 EXPORO analysts evaluate projects in terms of market and investment data. Tranio analysts provide additional filtering of projects. However, the investor makes a decision independently and under his or her own responsibility. In order to better assess the opportunities and risks of the projects, we recommend that clients seek additional assistance from independent consultants.
Which scenario can lead to a loss?
Losses can occur if the project's profit turns into a loss for the developer, and in this case the developer does not have any other means for maintenaning creditors. For example, apartments are being sold well below the market price or the construction costs soar. These risks are minimised through a careful analysis of the project, and vetting developers.
What happens to my money if EXPORO or Tranio platforms cease to exist?
The developer will still have to return the money to creditors. All the necessary data will be transferred to them
What happens in case the project is delayed?
Loan terms remains in effect, including timely loan repayments, including interest.
What happens if the real estate market crashes?
The offered projects are implemented in locations, where the population is growing, and housing is scarce, thus the collapse of the market is highly unlikely. In addition, regardless of the market condition, your right on timely receipt of the loan payments, including interest, will remain in force.
What other risks are there?
Risks may be associated with the fact that the investor provides a subordinated loan. During a distribution of profits (or the division of revenue from the sale of the debtor's property in the event of bankruptcy or liquidation), the money is first received by the bank, and only then by the investor. The developer gets its share of the profits last in any case, after all the lenders, including the investor.
Is there a real estate collateral to be secured?
In some projects there is a real estate pledge, in some - not, but other guarantees are provided (for example, the developer can vouch with his or her personal property to creditors).
Why not all projects provide a real estate collateral?
Such a requirement is sometimes exhibited by banks that do not want other lenders to be indicated in the Land Registry.
How is my investment secured?
For all EXPORO projects:
1) payments are made through a trustee;
2) the developer makes the profit after investors;
3) the developer invests own capital in projects;
4) the loan is not paid to the developer until the site has been acquired, preliminary construction notice and the bank's financing obligation have been received;
5) projects are implemented only in those locations where the real estate market is growing.

Are projects insured against natural disasters?
Usually yes, but it is better to specify for each individual project.
About developers
Why developers do not take all the money for projects from the bank, at a lower interest rate?
Banks regularly finance construction projects, especially in attractive locations where the demand exceeds the supply. However, they require a higher ratio of attracting equity capital (from 10 to 40%, depending on the project) from the developers. Since developers usually work on several projects at the same time, the requirements for their capital increase significantly, and as a result, there is often a shortage of funding that can be covered by a subordinated loan. So the developer gets more entrepreneurial flexibility. In some cases, developers prefer not to contact banks at all, using only mezzanine loans.
How and when do developers get money?
The sale of apartments starts with the issuance of the building permits. However, if the project involves any bank, the proceeds will go to the escrow account. The developer receives the money only after the project is complete, so they are interested in the imminent completion of the project.
What happens if something goes wrong with the developer who gave a guarantee (death, illness, other reasons to stop the activities)?
There are many construction companies in Germany that will be happy to continue a promising project. If something happens to the developer, then EXPORO will find a new one.
The procedure for signing a contract and transferring the money
With whom exactly is the contract signed?
With the project company- EXPORO.
Is it possible to issue a loan on behalf of the individual or legal entity?
Yes.
In what language is the contract written?
The contract is in German and English.
How does the contract signing undergo?
The investor receives the contract by e-mail, prints it out, signs and sends back a scanned copy. After that, the original contract is exchanged.
Do I need to open an account in Germany?
No. You can transfer money from a Russian bank account and get a loan and interest on it.
What documents will I need to provide?
You must provide documents confirming the legal origin of the funds invested by you.
Contacts
Elena Milishenkova
Club Investment Specialist
+49 302 295 7622
Investment advice consultation
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