What is PropertyShares?
PropertyShares is an online investment platform that allows investors to invest in pre-vetted Australian real estate. Often referred to as Crowdfunding or Crowd Sourced Equity Funding (CSEF) investors have the opportunity to invest in a number of specific real estate opportunities providing capital gains, cash flows or both. Each property is hand-picked by our investment team and screened through a predefined due diligence process. Information like location, asset type, returns, market analysis, company background, management team, key financial information, legal documents and risk analysis is then made available for investors to assess for themselves. Investors have the ability to browse a variety of investment opportunities and then pick and choose which projects they would like to invest in. Investors are then able to monitor their investments and track returns through a simple investor dashboard which provides regular reports and automated returns payments.
What is Crowdfunding/ Peer-to-Peer Investing/ CSEF?
Crowdfunding, Peer-to-Peer (P2P) Investing, and Crowdfunding are all generally referred to as the practice of small amounts of capital from a large number of individuals to finance a new business venture or investment. Crowdfunding has the potential to increase entrepreneurship by expanding the pool of investors from whom funds can be raised beyond the traditional circle of owners, relatives, banks and financing firms.
How is PropertyShares different than a Real Estate Investment Trust (REIT)?
PropertyShares is different to a REIT because it allows investors to choose and invest in a specific property, whereas a REIT only allows investments into pools of capital which is then invested into projects limited by asset class or geography. Some REITs also charge substantially higher fees, oftentimes close to 15% of invested capital. Finally, because most REITs are publicly traded, they have traditionally experienced substantial volatility along with the stock market. However, these are not the only differences between PropertyShares and REIT's so please consult your tax or investment advisor for additional information.
What types of investments does PropertyShares Offer?
Through the PropertyShares Investment Platform, Investors can access a variety of real estate asset classes, including: Residential, Commercial, Land, Retail and Mixed-Use. Investors can also access both debt investments in the form of first or second-mortgage loans secured directly or indirectly by residential and commercial properties.
Who can invest with PropertyShares?
PropertyShares is currently open to high net worth individual investors and institutional investors including family trusts, SMSFs, companies, wholesale and sophisticated Investors, registered investment advisors, private equity firms, hedge funds, banks and asset managers. Currently Retail Investors are not able to invest in PropertyShares investments. We are working on opening PropertyShares to Retail Investors in the near future. Register here and we will notify you when this happens.
What is a Wholesale/Sophisticated Investor?
A Wholesale/Sophisticated Investor includes any person or entity with a Certificate from a Qualified Accountant certifying that they have :
- Net assets of at least $2.5 million; or
- gross income for each of the last 2 financial years of at least $250,000 a year.
This certificate must be obtained from a qualified accountant who is a member of the Institute of Chartered Accountants, Australian Society of CPAs or the National Institute of Accountants.
If you believe that you meet the above requirements but do not currently have a certificate, we can connect you with one of our accounting partners who can assist you in obtaining certification.
What is a retail investor?
A Retail Investor is any person that does not meet the requirements of a 'Wholesale', 'Sophisticated' or 'Professional' Investor.
Can I invest through my SMSF or a Company?
How do I start investing on PropertyShares?
The first step is to register an account. This involves an identity check to comply with Anti-Money Laundering Laws. This check is done within a matter of minutes. Once your account is set up and you sign the Investor Agreement documents you are ready to make your first investment.
What do I need to complete the registration?
In order for us to verify your identity, you will be required to provide some basic personal information such as your name, date of birth, address, drivers licence number and bank account details.
What is the IM and why do I need to read it?
A Information Memorandum (IM) is a document, or sometimes a group of documents, that contains information about a financial product including any significant benefits and risks, the cost of the financial product and the fees and charges that the financial product issuer may receive. The IM helps you understand more about PropertyShares and the investments we offer so you are able to make an informed decision about which investments you make.
Why should I use PropertyShares to invest in real estate?
PropertyShares allows you to passively invest in professionally managed real estate investments for as little as $10,000, from the convenience of your living room. As an Investor, you will have access to pre-screened deals in a variety of asset types and geographies, giving you the ability to partake in opportunities historically only available to large institutions and wealthy individuals. You will also have access to an investor dashboard where you can securely monitor your investments and cash distributions.
How do investors benefit?
Investors benefit from capital gain returns and cash flows, unprecedented access to pre-vetted debt and equity real estate investments, lower investment minimums and the opportunity for increased diversification.
Can I invest if I am a foreign investor?
Yes - provided you are a wholesale investor in your jurisdiction and we are able to verify your identity. Please contact us directly at email@example.com and we can assist you settling up your account.
How do I ask a question regarding a specific investment?
Please feel free to contact us directly on XXXXXXX or email us at firstname.lastname@example.org and include the name of the investment in the subject line.
How does the investment process work?
i. PropertyShares screens all investment opportunities prior to listing them on our online platform. This screening process usually includes background and credit checks on the company offering the investment as well as a review of financials, projected returns, title and inspection reports, and comparable sales. The due diligence process covers Project, Market, Management, Financials, Legals and Risk Assessments. Once an investment is listed, you will have access to detailed investment information including financials, property information, legal and financial documents and Management bios in order to allow you to make an informed investment decision. Each investment has a target funding amount and Investors who opt in for a specific investment will have their desired committed funds held until the funding amount has been met. If the target funding amount is not met, 100% of your committed funds will be returned to you. When an investment is fully funded, it usually takes 1-3 weeks before the deal closes and investors start accruing returns.
The PropertyShares platform also allows you to review and execute all applicable legal and investor documents online prior to transferring funds to a Trust Account to be held in Escrow. Please note that PropertyShares does not have discretion on how your funds are deployed once you opt in for a specific investment. Please also note that PropertyShares does not guarantee the performance of any investment listed on www.propertyshares.com.au
How is an investment made?
Investors initially deposit funds into the PropertyShares Trust Account as Cash Units which can then be used to invest in either loans and/or equity investments.
How do investors earn returns?
If you invest in a loan opportunity, you will receive monthly or quarterly interest payments. A share of those payments will be deposited directly into your PropertyShares Cash Account which can be sent directly to your own bank account or reinvested in new investments. If you invest in an equity opportunity, the fund you invest in will receive a share of the profits when the property is sold. As with debt investments, a share of any equity returns will be deposited directly into your PropertyShares Cash Account which can be sent directly to your own bank account or reinvested in new investments. Please review the information provided on each specific investment opportunity for detailed investor returns.
What is a Cash Unit?
A Cash unit is the amount of cash you have available on PropertyShares to invest in either Loan Units (Loan Investments) or Equity Units (Equity Investments)
Do Cash Units receive interest?
Yes - Cash Units receive an interest return based on the average commercial cash rate offered by Westpac Banking Corporation. However this is subject to change without notice.
Is there a minimum/maximum investment amount?
Currently there is a minimum investment of $10,000 per investment, although this may be removed on future investments. For select investments, we also offer minimums as low as $1,000. Some investments may set a maximum investment amount to maximise returns, however, there is technically no maximum and an investor can invest the full funding amount themselves.
What are the terms of each investment?
The terms of each investment on PropertyShares are specific to that listing. Prospective investors should review in detail the offering documents provided for each investment opportunity. However we have streamlined all paperwork so there are only minor adjustments which are highlighted between
What happens if the target funding amount is not met?
If the target funding amount is not met, 100% of funds you commit will be returned to you.
What happens if there is more interest in an investment than funding needed?
Investments are usually closed on a first-come, first-served basis. Once the total listing amount is reached, the offering is closed.
Can I draw an income from my investments?
Yes, all returns can be deposited into your nominated bank account as soon as they become available, or held in your Cash Account to earn interest or reinvested into new investments.
How often are returns paid?
On loan investments interest returns are paid monthly or quarterly with the principal repaid at the end of the loan. With equity investments, principal and profit returns are paid at the end of the investment.
Do I have to pay a fee to invest?
Joining PropertyShares and browsing investments is free. If you choose to invest in a specific offering, PropertyShares will charge a fee up to 3% (2% of returns or amount invested) to cover ongoing investor reporting and communications for the investment. All fees are defined in the IM (Insert Link) Please review the Operating Agreemeent for details on the fees associated with a specific investment.
What kind of updates will I get about my investment?
PropertyShares investors will receive monthly or quarterly updates and reports for each investment via email and directly to their online investor dashboard. You will also receive tax documents in each Australian financial year in which you have a distribution from a real estate investment through PropertyShares.
Are investments secured or unsecured?
Generally investments are secured by real estate in Australia. Typically investments will be secured by First and Second mortgages or caveats. However, PropertyShares may offer some investments which may be unsecured creating higher risk for higher returns. Investors should refer to the information provided on each investment to see the specific security provided. However this does not mean that principal and/or interest/profit is guaranteed.
What happens if a borrower misses a payment?
If a borrower misses a payment, investors will be informed immediately and PropertyShares will determine what loan modification or loss mitigation options to pursue before beginning foreclosure proceedings. PropertyShares will inform all investors if any significant actions are taken on their specific loan investments.
How is risk managed?
PropertyShares takes a number of steps to help minimise the risk of investors losing money due to borrowers being late in making payments or defaulting on loans. This forms part of the PropertyShares due diligence process in the type of information we collect and the opportunities we present to investors. Also, until an investor's funds are transferred to borrowers, they are held on trust in a segregated bank account with an Australian authorised deposit-taking institution controlled by our custodian. This means an investor's funds do not form part of PropertyShares' assets. In addition PropertyShares is audited every year by Compliance partners to ensure that investor funds are properly accounted for and our platform is operating in accordance with our terms and conditions.
Are PropertyShares Investments liquid? When will I get my investment back?
Private real estate investments of the type you find on PropertyShares are not traded on a public market and as a result, your shares in these investments cannot be easily traded or sold. Each investment has a unique projected "term". The Term is the expected time investors will be involved with the investment until it is sold or the loan is paid off. Please note that the "term" is an estimate and may differ from the actual hold period for the investment. This expected term will be made available to investors through the Investment Overview Page for a specific investment and currently ranges from less than 6 months to greater than 5 years. For more details regarding the term, please review the Operating Agreement and Subscription Agreement associated with the specific investment.
May I sell my securities?
PropertyShares will be introducing a secondary market to on-sell your investments to other investors. While this is not currently available you may on-sell your investments in private transactions subject to certain restrictions specific to each offering and under the Securities Act of 1933. If you have any questions concerning restrictions on the resale of your investments, please refer to the offering documents associated with each investment as well as with your legal counsel or financial planner.
What am I investing in?
Investors receive Units in a Unit Trust which are directly allocated to each specific investment. For example if you invest in Property A as a Loan you will receive Loan Units for Property A. If you invest in Equity of Property B then you will receive Equity Units for Property B.
Why do investors invest into a Trust?
By investing into a Trust Structure this minimizes overheads for the borrowers, maximises returns for investors and allows PropertyShares to access more investment opportunities for investors. It also allows for streamlined reporting, distributions and tax documentation through the PropertyShares software.
If I am invested in Loan A and Loan B loses money could this affect my investment?
No. Each investment is completely separate and the performance of one has no impact on the other.
Are all PropertyShares investments the same?
No, each investment is unique. However we have streamlined all paperwork so there are only minor adjustments which are highlighted between investments. A separate due diligence is performed on each investment to ensure only high quality deals are listed.
What if a borrower wishes to extend their loan term?
The extension will be treated as a new loan. The original investors will be repaid and if they wish they may reinvest in the new loan.
How do I manage my investments?
All your PropertyShares investments can be viewed and managed through your online investor dashboard.
Will I be on the Title of the Property?
No, your name will not appear on the title of the property. The name of the entity purchasing and developing the property will normally be included on the property’s title. Your name will be listed on the ownership documents of the entity that develops the property. ANTH TO ADD HIS TOUCH
Can I view the properties?
Yes. We will arrange open days for you to view potential investments and meet the management team on the project.
Can I meet the management team?
Yes. We will arrange open days for you to invest potential investments and meet the management team on the project.
How safe is my investment?
Like all investments, investing in real estate does involve some element of risk. PropertyShares performs due diligence to provide you with as much information as possible to make an informed decision. Should something go wrong with a specific investment then that investment will be wound up and the net proceeds returned to Investors.
Is my personal information secure?
All communication between our users and the website is encrypted and secured using HTTPS and SSL/TLS. We encrypt all sensitive personal information using the AES-256 standard, which is the same encryption standard used by banks to secure customer data. PropertyShares uses Amazon Web Services for data storage. Amazon stores data over several large-scale data centres. According to Amazon, they use military grade perimeter control beams, video surveillance, and professional security staff to keep their data centres physically secure. For added protection, we never store your banking information on our servers and we automatically log you out of your account after 30 minutes of inactivity.
What is AML and why do you need to check my identity?
The AML/CTF (Anti-Money Laundering and Counter-Terrorism Financing) Act is part of a legislative package which brings Australia into line with international best practice to deter money laundering and terrorism financing. To comply with legislation PropertyShares is required to check the identity of any person or entity making deposits or investments with PropertyShares.
How does the Identity check work?
In accordance with AML/CTF ((Anti-Money Laundering and Counter-Terrorism Financing) and KYC (Know Your Customer) requirements, PropertyShares will enlist the services of third party agencies to confirm your identity with databases they have access to.
Why do you need send mobile confirmation codes?
As is commonly done with other financial institutions and banks, to ensure that investments and transfers are not made without your knowledge verification codes are sent to your designated mobile number. These codes must be input onto the PropertyShares platform to complete any investment or transfer.
Can borrowers view my personal information?
No. Borrowers cannot see any personal or financial information about you.
Where are funds transferred through PropertyShares deposited?
All funds transferred through the PropertyShares website or by Electronic Fund Transfer (EFT) are deposited into a Trust Account with Westpac Bank. Funds are kept in this account until the target funding amount is reached. Once the target funding amount is reached, funds are transferred for the sole purpose of the specific loan or specific property you are investing in. If the target funding amount is not met, 100% of your funds are returned directly to you.
How does PropertyShares screen investments?
Before placing any investment opportunity on our platform, the PropertyShares team reviews aspects of the proposed transaction. This screening process reviews financials, projected returns, title and inspection reports, geography, property type and quality, investment structure and comparable sales. The due diligence process covers Project, Market, Management, Financials, Legals and Risk Assessments. In order to decrease fraud, we also perform background and credit checks on the Real Estate Companies. While each investment includes risk and PropertyShares cannot guarantee results, our vetting process seeks to ensure that only quality investment properties are listed on the platform. Once an investment opportunity is listed on the platform, investors have full discretion as to whether to personally invest in the opportunity, and if so, how much.
Who is MSC?
MSC is PropertyShares' financial partner who provide ASIC compliance, financial governance and regulatory oversight over PropertyShares Investments.
Is PropertyShares a bank?
- PropertyShares is not a bank and is not authorised under the Banking Act 1966 (Cth) and is not supervised by the Australia Prudential Regulation Authority. PropertyShares is regulated and licensed by ASIC, holding an Australian financial services licence number 449176 and an Australian credit licence number 449176.
- BridgeLane Asset Management Limited (BAML) has appointed the BrickX and BrickX Trusco Pty Ltd (BrickX Trustee) as its authorised representatives. BAML is currently only authorised to provide financial services to wholesale investors in this jurisdiction. Pursuant to section 911A(2)(b) of the Corporations Act 2001 (Cth), the BrickX Trustee separately appointed BrickX as its intermediary for the purposes of making offers to arrange the issue of Bricks. As BAML’s authorised representative, the Manager can, and will, make offers to issue Bricks for the purposes of satisfying BAML’s obligations under its intermediary arrangement with the BrickX Trustee.
- How is RateSetter regulated?
- RateSetter (that is, RateSetter Australia RE Limited) holds an Australian financial services licence number 449176 and an Australian credit licence number 449176 issued to it by ASIC. RateSetter Australia RE Limited is the responsible entity of the RateSetter Lending Platform (ARSN 169 500 449), a managed investment scheme that is registered with ASIC.
- To learn more about how we are regulated please see our Information Memorandum.
How can I contact PropertyShares?
What happens if I forget my username and/or password?
If you have forgotten your password, go to www.propertyshares.com.au
Click on Login and then click on forgotten password. You will then be emailed a temporary password and a link to proceed.
What should I do if I have a complaint?
Please contact the PropertyShares Team on XXXXXXXXX or email the complaints team on email@example.com. You may also write to:
PropertyShares Pty Ltd
Attn: Complaints Team
How do I access your Information Memorandum?
If you are considering investing, you should ensure you read our Information Memorandum.