Given that we will operate through collective investments through “Peer to Peer” loans (Loans between individuals), each of the investments made by a user will be understood as a loan between the user (hereinafter the Lender) and W.R.C. (hereinafter the Borrower) that is why a contract will be signed between the parties for each of the contributions & operations.
· Capital to invest = loan to make
· Investment coefficient granted on the investment made
· Interest rates on the loan, offered by the Borrower
· Interest rates on the benefit obtained by the Lender and in favor of the Borrower
· Operation costs
· Sales Values
· Loan terms
As we have previously commented, the user is free to acquire the amount of shares he/she wishes as long as the amount to be invested is equal to or bigger than the established minimum investment for each of the operations.
Since it’s a collective investment, the User Lender agrees to know that several other lenders will participate in the investment, as many as the Borrower (W.R.C.) considers based on the total cost of the investment, with that, the Borrower (W.R.C) will establish the minimum contribution access. The amount contributed in the loan will provide the Lender with a coefficient on the total cost of the investment. This same coefficient will be the one used later for the distribution of the benefits obtained.
· The purchase and reform of a unit has a total cost of 100.000€, 4 users in addition to the borrower enter into the investment with the following contributions:
Investor 1 = 30.000€ // Investor 2 = 25.000€ // Investor 3 = 20.000€ // Investor 4 = 15.000€ // Borrower = 10.000€.
· Being the participation coefficient for each of the investors and borrower, and based on the following formula ((Capital invested / Total unit cost) x 100%) of:
Investor 1 = 30% // Investor 2 = 25% // Investor 3 = 20% // Investor 4 = 15% // Borrower = 10%.
· The unit after the renovation ends up being sold for 130.000€, reporting a profit of 30.000€, these will be divided between the investors and the borrower based on their investment coefficients, with the results for each of them being:
Investor 1 = 9.000€ // Investor 2 = 7.500€ // Investor 3 = 6.000€ // Investor 4 = 4.500€ // Borrower = 3.000€.
· In the event that the renovated unit ends up being rented while waiting to find a buyer and thus obtain an immediate post-renovation benefit, setting a rental price of €500 per month (€6,000 per year) and having a profit after the payment of the expenses associated with the unit, such as: IBI, community expenses, supplies… of €5,000, these will be divided between the lenders and the borrower based on their coefficients, with the results for each of them of:
Investor 1 = 1.500€ // Investor 2 = 1.250€ // Investor 3 = 1.000€ // Investor 4 = 750€ // Borrower = 500€
· Borrower (W.R.C.) in favor of the Lender (User): The operations to which we will access will have an estimated return on investment time of less than 12 months, but as with any loan with a contract involved, legally W.R.C. has to assign an annual interest, that for the case will be a fixed annual interest of 3% in which the Borrower (W.R.C.) must pay annually in favor of the Lender (user) and based on his economic contribution.
In the event that the unit is put up for rent once its renovation is complete, the Lender (user) will receive an interest rate based on the profitability obtained from the rental of the unit, which will always be greater than the 3% fixed in the contract.
· Lender (User) in favor of the Borrower (W.R.C.): In consideration for the services that Wonder Rock Capital provides in each of the operations, W.R.C. will obtain as fees a percentage of between 10% and 20% of the benefits obtained by each Lender (user) in each of the operations. The percentage variation will derive from the type of operation and will be defined in the operation presentation that will be sent to the users.
In the event that the unit is put up for rent once the renovation of the unit is complete, W.R.C. will receive as fees for the management of the rented unit, an interest rate of 5% on the benefits that each of the users obtains from each rented unit once the annual costs associated with the unit have been settled.
The detailed costs & sale values of each operation are reflected in the Operations Study document that will be sent together with the rest of the information and documentation of the unit.
Once the unit is purchased, all the costs of the operation will be reflected and updated weekly in the “Operation Development” document, each user who participates in the operation will receive a link via email to the document so with that they can verify the financial status of the operation. In this same document the state of the renovation will be updated after each work visit through photos and videos as well as all the documentation of the operation and its invoices and payments done.
The sale of the unit can be made directly to one of the users in a “preferential purchase option” with a preferential purchase value. If this option were to materialize, the amount invested in the operation and the benefit obtained by the user with his/her investment coefficient would be subtracted from the agreed closing price by selling the unit to an end customer for the same value.
ent, with that, the Borrower (W.R.C) will establish the minimum contribution access. The amount contributed in the loan will provide the Lender with a coefficient on the total cost of the investment. This same coefficient will be the one used later for the distribution of the benefits obtained.
The loan or investment made will not be returned until the sale of the unit has been completed. After the sale, once the whole numbers are closed, the investment will be returned plus its corresponding benefits to each of the users.
The user may not in any case request the return of the capital invested during the agreed period of time. Only the user may opt for this condition in the event that any of the other users participating in the investment or the same borrower (W.R.C.) assumes the participation coefficient; or part thereof; that the user has on the operation, in the event that it occurs, the acquiring user of the shares will sign a new contract with W.R.C. setting the new participation coefficients.
We want to aspire to the complete digitization of the process through mobile applications in which the user can feel part of the process at all times. Making them participate in decisions to be made and making him feel part of the game to the extent that the user wants.
As I have commented in the first point of this chapter, there have been many years of trial and error that have led me to start this project and I would never have taken the final step without being sure of knowing where I was stepping. There is still a long way to go, but every walk is always more entertaining when it’s shared.
