Willow, a Canadian startup, has launched a new fractional investment platform that allows anyone to purchase and sell shares in commercial real estate.
PropSharing enables investors to acquire and sell property ownership as simply as they do stock market shares. Property is divided into 100,000 ownership units and sold on the site. Legal ownership is standardized, and property management is handled by professionals. Participants can create their own portfolio of properly sourced assets.
The Toronto-based firm is registered as an Exempt Market Dealer in all provinces and territories, and it is governed by the Ontario Securities Commission (OSC). It limits its own stake in each property to no more than 10% and no less than 2.5%. It also controls any repairs or improvements that the property may require, as well as arranging for insurance coverage, though Willow says it will notify shareholders of any such changes.
Crowdfunded Real Estate, PropSharing, and R.E.I.T's
Willow prefers the term PropSharing, but the meaning is that you are purchasing a fractional interest in a property. You're purchasing a modest, piece of real estate. Your shares can accumulate dependent on the market worth of that property, which you can trade at any time. It differs from crowdfunded real estate, such as Addy, in which several investors pool their resources into a platform to either acquire properties or lend money to real estate borrowers. It also differentiates from REITs (Real Estate Investment Trusts), which are real estate portfolios combined into a single asset in which you can acquire shares, typically on the stock exchange.
Willow eliminates the guessing by allowing investors to just purchase shares in properties they are interested in. Limiting each property to 100,000 shares defines equity for all investors, regardless of how many they have purchased. Willow's addition of new characteristics has no effect on the value of existing ones because each one is treated individually.
All client funds and investments are held in trust accounts at Canadian financial institutions. This keeps them apart from Willow's operations and gives all investors creditor protection if the firm fails. As an investor, you can also withdraw funds at any time rather than waiting for specified times.
How it all Works Online
Willow's PropSharing platform is accessible via its website and mobile apps. You can use a Windows PC, Mac, Chromebook, iOS, or Android device to access them. It sends you an onboarding questionnaire to help you establish a financial profile when you sign up. It is required to do so under current legislation and to establish the best amount you can spend to invest in real estate. Regulatory regulations also involve information such as job, identity, tax information, and any potential conflict of interest in the event that something goes wrong.
Clients are often classified into one of three groups. The accredited investor is exempt from the recommended limit. Eligible investors with an annual income of more than $75,000 can invest up to $100,000 on the platform. Non-eligible investors may invest up to $10,000 each year. These are regulatory caps rather than ceilings set by Willow, although you must be a Canadian resident to invest.
Applications are reviewed by a compliance team, and if authorized, clients can fund their Willow accounts and begin investing. Your Willow account is linked directly to the bank account of your choice, making it easier to sell shares and deposit cash.
The Advantages of PropSharing
Ownership Standards: Each property is subdivided into 100,000 equal portions.
Active, Profitable Properties: Lease revenues pay the bills, and profits are distributed monthly, much like dividends.
Straightforward to Buy and Sell: Use our platform for simple purchasing and selling at market prices.
Financial Security: The mortgage for each property is approximately 50%, plus a 6-month reserve for unanticipated needs.
Fee Structure is Simple and Transparent: $4.99 in trading costs, 0.5 percent in management fees, and 1% in property acquisition fees.
Regulated: Willow is subject to securities laws and regulations in Canada.
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