What Happens if addy Doesn’t Complete a Funding?

The basic principle behind crowdfunding is that a group of people pool their money towards a common goal that would otherwise be too high for any one person to achieve alone. Crowdfunding can help people pay for medical bills or tuition, assist in development of a creative project or in the case of addy, allow for fractional real estate ownership.

Many crowdfunding cases, however, need to hit a specific threshold in order to be fulfilled. There is a set amount of money requested and if the project isn’t fully funded, the project never gets off the ground. So what happens if an addy property isn’t fully funded?

Crowdfunding real estate

addy’s crowdfunding real estate platform works a little differently than traditional crowdfunding. Instead of a minimum threshold that needs to be cleared, each property drop comes with the maximum amount of money that can go into it.

addy divides the total amount into $1 increments to allow as many people to invest as possible. For example, if a property drops with  $500,000 available, that means there are 500,000 shares that can be purchased by members.

addy also puts in place a maximum investment of $1,500 per property by any one member so that there is room for everyone to invest; addy believes everyone should have an opportunity to own property regardless of how much money they have to invest.

What if the funding isn’t complete?

addy members can invest assured that there is no risk if a property does not sell out. Your investment goes directly to the property, whether or not the entire issuance is sold out. That’s because that transaction between the seller and the purchasing General Partner (for example, a developer) has been completed before addy members get involved. The GP purchases the property and then works with addy, a Limited Partner (LP) after the close of the original purchase agreement.

In many situations, the GP is flexible and willing to work with addy to create a win-win where they will take on the amount raised even if the property does not sell out. In a less common situation where the funding is not flexible, addy will cover the remaining money to ensure the full amount is raised. Both scenarios ensure addy members are able to invest confidently.

That is the case with Clearview on the Park, a four-storey apartment complex in northern Toronto that is still open to investors, with a total issuance of $1,000,000. As of this writing, it is just over 80% funded, but even if it doesn’t reach the target, all investments move forward with the proposed plan and timetable for returns. That’s because addy has already committed the full $1,000,000 to the GP.

When you choose to invest, all of your investment goes directly to the property. And after that, your work is done.

Invest with addy

Only addy members can invest in a property. If you’re over the age of majority in any of the four unlocked provinces – B.C., Alberta, Ontario or Quebec – you can become a member today, fund your wallet and start investing immediately.

To join addy in crowdfunding real estate, join today:

Leave a Reply

Your email address will not be published. Required fields are marked *