CapitalRise Review: An innovative platform disrupting the real estate investment market in the UK and Europe. Let’s analyze the platform and why it might be a great investment avenue.
Are you looking for an alternative real estate investment platform? Do you wish to test the waters in real estate? In this CapitalRise Review, we delve into why CapitalRise is making waves in the real estate market.
CapitalRise Overview: What is CapitalRise?
CapitalRise is a real estate investment platform out to disrupt the old way of investing. It aims to give all investors access to real estate opportunities previously the preserve of corporations and the uber-wealthy.
Alex Michelin, Andrew Dunn, and Uma Rajah co-founded the company and launched in July 2016. Through the platform, over 46M pounds worth of investment has gone towards prime central London development properties.
It’s worth noting that the founding team has over 100 years of combined experience in real estate, financial technology, and finance. They have technical expertise in the mathematical and analytical side of lending and risk management.
Additionally, they have built a strong team that draws on broad experience and sector knowledge to seek appropriate investments. The team has identified lucrative opportunities in industrial, residential, commercial, and hospitality properties.
CapitalRise is unique in that the team invests their own money alongside other investors. It not only demonstrates confidence in their investment picks but also assures other investors.
How to Open an Account on CapitalRise
Signup is free. The signup process is easy and straightforward. It has been automated to cut down registration time. Here are the steps:
- Create an account on the platform and supply a strong password.
- Provide necessary information, such as contact, Date of Birth, etc.
- Submit your taxpayer ID number
- Link your bank account with them to fund your account and start investing.
How to Invest in CapitalRise
Before you start investing, you must have a valid and funded account. With that, you get access to the deal room, where the CapitalRise team posts all the ongoing investment opportunities for consideration.
You must choose the type of investor you are before you start investing. You can choose from four classes, each exhaustively described on the platform, to help you decide. The investor types include:
- Restricted investor – Applies to the everyday investor as long as they do not invest more than 10% of their net assets into specific types of investment. The majority of people fit into this category.
- Sophisticated Investor – An investor who has worked as a professional investor in the last 48 months or who has invested in an unlisted company in the same period
- High net worth investor – Investors with an income of over 100,000 pounds or held net-assets of over 250,000 pounds in value in the last 12 months.
- Corporate/Professional investors – Persons authorized to invest on behalf of a corporate investor whose primary business is to invest in bonds, shares, and other financial instruments.
You need at least 1000 Pounds to start investing on the platform.
Once you complete the signup process, click on the deal room to review investments.
As a rule, the team carries out its due diligence. It applies a strict criterion to every investment opportunity, with only 2% of all opportunities considered. The credit committee also carries out thorough background checks on potential opportunities.
At the end of the term of an investment, investors can withdraw returns along with the profits. They can also choose to reinvest in another opportunity.
The Types of Investments Available at CapitalRise
CapitalRise is specifically built to provide investors access to prime, property backed real estate investment opportunities.
The primary investment is property loans that fund professional property developers in London and some of the Home Counties. The properties are located in such iconic places as Eaton Square, Grosvenor Square, The Strand, among others.
Investments can be divided into two: the lower end of that spectrum being the senior loans, which will be lower risk, with a first legal charge, and the higher end of that spectrum being the mezzanine loans where you are at a higher risk position, subordinated behind a senior lender.
There’s also an equity product where investors share profits in selling developments like you’re one of the development owners.
CapitalRise retains step-in rights to take over a property development and see it through to practical completion. They can also force the sale of an asset to recoup some of the capital.
The team charges fees to property developers looking to raise funds on the site. It’s low enough to attract the best investments.
CapitalRise Auto Invest Tool
Currently, there is no Auto-Invest tool on the platform.
The volume of the deals isn’t that high on the platform. Investors can efficiently conduct due diligence and make financial decisions.
How Much Can You Earn on CapitalRise?
The loans attract an interest of around 9.8%.
Investors, therefore, stand to make between 8 – 12% pa in returns on their investments, potentially tax tax-free on up to £20,000 per year if they are using their IFISA allowance. (Innovative Finance ISA)
Who Can Invest In CapitalRise?
CapitalRise accept international investors, but it depends on which jurisdiction they come from. Typically, European customers have no problem, but if you’re from a non-European country, then it very much depends on the country as to whether or not they can accept you as an eligible investor.
Additionally, investors must have a minimum of 1000 pounds to invest.
You must also be of legal age.
- No fees charged to investors for using the platform
- Potential returns of 8-12% pa on investments
- Innovative Finance ISA (IFISA) available providing tax-free returns on investments
- Founders invest personal funds into every project, giving them “skin in the game.”
- Professional founding members with over 75 collective years of experience in the sector
- Transparency with details on investments including location, sales/letting data, developer history, financial appraisal, etc. provided
- Simple application process
Our CapitalRise review has unearthed one or two drawbacks that you should keep in mind:
- High minimum investment at 1000 pounds
- Risk of investing in prime real estate backed loans
- Investment performance not covered by the Financial Services Compensation Scheme (FSCS)
- Time-consuming to carry out due diligence
CapitalRise Review: Verdict
CapitalRise is a young innovative company. It’s slowly disrupting the real estate investment sector by bringing exclusive investment opportunities to the ordinary investor.
Additionally, it has a strong founding team with extensive experience in property development, technology, finance, and investment. The team also invests personal funds alongside other investors.
Investing through the platform is a natural process, with a transparency guarantee on every investment opportunity. The potential returns are average compared to other P2P investment returns.
Perhaps the only drawback is the high minimum investment that might lock out most investors.
Bottom line: If you’re looking to diversify into the real estate sector, and test the waters, CapitalRise might be a great opportunity. You must, however, carry out your due diligence on every deal before you commit your money.
Other Crowd Investing Resources
Looking for more options? You might want to read some of our other crowd investing and peer to peer lending reviews. There are many peer to peer lending and investing platforms currently available, and you can diversify your interest income by using several of them simultaneously.
You can consider some other peer to peer companies by checking out our Estate Guru review or our PropertyPartner review. Also check our posts on the best peer 2 peer lending platforms in Europe, and the best real estate crowdfunding platforms in Europe.
Are you already investing in CapitalRise or in any other peer to peer lending platform? Leave your thoughts and questions about this CapitalRise review below.