“Worldwide we believe that the growth potential for (the real estate crowdfunding) market is immense.”
As CEO of Max Crowdfund, Managing Director of the Max Property Investment Group, and mentor at the Property Master’s Academy, Mark Lloyd oversees a sort of property investment empire. And with a company that facilitates global investment opportunities, there is almost always a great deal on his plate. In an exclusive interview with BrikkApp, he sheds light on the history of his platform, the popularity of real estate crowdfunding in the Benelux region, returns and yields, and provides a hopeful glimpse of what lies ahead for this burgeoning industry.
Tell us a little about Max Crowdfund and your history - how long have you been operating and why did you choose to start your company?
The founders of Max Property Group have been in the real estate business for a long time (several decades, depending who you’re talking to), and they decided in 2015 to start structuring property funds with a relatively low minimum entry (€10k). They set up two funds in the Netherlands, one in Germany, and one in the UK. They soon realized that dealing with a large number of investors is time-consuming and inefficient. That is why they contracted Erwin van Kekem in 2018 to set up Max Crowdfund and automate the entire real estate investment process, from listing projects to investing in the opportunities to providing monthly, quarterly and annual statements for the tax authorities. The goal of the founders has always been to make real estate investments accessible to everyone worldwide.
How popular is real estate crowdfunding in the Netherlands/Benelux region?
In 2020 the top 100 crowdfunded real estate projects had a total value of only €38.7m, which shows that it isn’t super popular yet, but is starting to become more mainstream already. Worldwide we believe that the growth potential for this market is immense.
As do we. So what type of investment opportunities does Max Crowdfund offer? Are you planning to offer any new types in the near future?
Currently, we are only allowed to offer debt-based real estate-backed loans. Once we have obtained the license in accordance with the new European regulation for crowdfunding platforms (CSPR), we will add equity-based deals and a secondary market.
How much money have you raised on your platform? What type of investments do you fund?
We only obtained the approval to go live from the Dutch Financial Authorities (AFM) in July of 2020, and we placed the first project on our platform in October. Since then we have raised just over €1.7m with the funded projects consisting of project development, buy-to-let, and buy-to-sell.
What is the average yield for investors on your platform? Why should investors choose to invest with Max Crowdfund?
Investors on our platform currently have a gross return of 7.92% p.a. As for why investors should choose to invest with us, we are a fully regulated platform approved by the Dutch Financial Authorities (AFM), from which the approval alone took 18 months to get. Combined with our years of experience and expertise in real estate, we believe we provide some of the safest investment opportunities available.
How much do you expect to raise in 2021?
Our goal is to have raised a total of €25M by the end of 2021, and this will be across various jurisdictions.
What would you consider to be Max Crowdfund’s biggest success so far?
Strangely enough, our biggest success is something you might take for granted but was very difficult, time-consuming, and expensive to achieve. Getting approval from the AFM as a platform using blockchain technology made us the first regulated real estate crowdfunding platform operating on blockchain technology in the world. Our blockchain enables investors to be able to look at the history of transactions in certain investment opportunities that we offer. As such this is certainly what we consider to be our biggest success.
Do you face any regulatory or similar challenges?
Regulation is obviously an issue as regulators are tediously slow, especially for start-ups that usually move (or want to move) at lightning speed. Our next big challenge is to obtain the EU license and receive banking facilities in all the jurisdictions we are expanding to. Banks and payment providers are reluctant to work with crowdfunding platforms and as soon as you say that you use blockchain technology, everything becomes 10x harder.
What’s next for Max Crowdfund?
The group has embarked on an aggressive expansion program via joint ventures, and we can already announce that we signed up with partners in New Zealand and Sweden. We are also actively talking to various other countries and hope to launch in an additional 5-10 jurisdictions by the end of 2021. With the launch of our New Zealand platform, we will also undergo a complete overhaul which will have the option for loans, equity, and the secondary market.
And lastly, what do you foresee in the future for real estate crowdfunding?
We strongly believe that real estate crowdfunding will become more and more mainstream over the next few years, and we also expect to see a lot of cross-border investment once there are platforms that are widely trusted by a large number of investors in various countries. The market as a whole will grow exponentially over the coming years and more and more investors will realize that investing your savings in real estate is more profitable than leaving it in a bank account.
You can view basic data and information to learn more about Max Crowdfund on their BrikkApp profile page: Here.
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