Real estate crowdfunding success in small towns
We kick off our series of success stories in 2024 with the Moraleja de Enmedio project (Madrid). This new residential asset is located in the center of this municipality, home to over 5,000 inhabitants, situated in the southwest of the Madrid Community. Moraleja de Enmedio has access to the capital through the A-5 and R-5 roads, and it offers numerous bus lines with direct connections to Móstoles, Leganés, Fuenlabrada, or the Príncipe Pío station in the capital.
In this case, the developer is Ilex Building Management, a company with over 30 years of experience in the real estate development sector within the Madrid Community.
The operation was launched in December 2021 and involved the development of four single-family homes, each with four bedrooms, with a built area of 134 m2 distributed on a single floor on a 450 m2 plot. The average cost per house ranged from 418,000 to 430,000 euros. This development was Phase II of another residential project by Ilex Building Management in the same municipality, which had seen notable commercial success.
Improved IRR and anticipation of the expected term
The project was structured through a fixed-rate loan for the acquisition of part of the land and the construction of the four homes. The €1,000,000 ticket was covered by a total of 900 investors. Anticipating high demand and to accommodate as many interested parties as possible, the funding process was managed through the prefunding system.
The initial estimated profitability was 15% over 18 months with a 10% IRR. Ultimately, although the total return for investors was finalized at 10.22%, the execution period was advanced by six months, improving the IRR from 10% to 10.13%.
Key success factors
Here are some of the factors that contributed to the success of this operation:
- Ilex Building Management has been involved in the promotion and construction of over 1,400 multi-family and single-family homes in the Madrid area.
- The developer had signed an exclusive earnest money contract with the owner of the four properties, and the building permit had already been requested.
- Loan repayment did not require the sale of all the homes.
- The project had a prior market study to determine if the sale prices were reasonable.
- Additionally, the promotion had one formalized reservation and three additional reservations in the process of formalization.
- The development is located in a high-demand area, an attractive location right in the center of the municipality.
In conclusion, another example of the seriousness and professionalism of the projects we launch from Urbanitae and the strength of our developers. If you also want to be part of Urbanitae’s network of investors and benefit from the profitability of prominent real estate operations, you just need to register for free on our website and check the projects we have in progress. For any questions, you can contact us via email at contacto@urbanitae.com or by phone at 911 23 25 22.