Foxstone’s ambition is to democratize and digitalize real estate investment for the Swiss middle class. The company offers participative investments that allow to invest in real estate in tranches and to become co-owner of a fraction of a high yield building. Each share of co-ownership is registered in the land register and is worth CHF 25’000, including all costs.
Since the launch of the first investment opportunity in June 2018, the minimum investment amount has increased from CHF 100’000 to CHF 50’000, and finally to CHF 25’000 for the majority of the offers offered on the platform.
The minimum investment amount for a transaction may therefore vary from one property to another. It depends mainly on two factors:
- the amount of equity to be raised
- the number of investors authorized by the mortgage providing bank
Dividing the first by the second gives the average investment amount. This is then used to determine the minimum investment amount which varies between CHF 25’000 and CHF 50’000 depending on the investment opportunities.
New investment opportunity
Let’s take the concrete example of the building located in the commune of Vully-les-Lacs, VD.
The amount of equity capital to be raised is CHF 1’275’000 and the bank limits the number of investors to 20 people; this gives an average investment of CHF 63’750. The minimum investment amount has therefore been set at CHF 50’000, which corresponds to two co-ownership shares.
However, if a person acquires a significant number of shares (e.g. 16 shares for CHF 400’000) this allows Foxstone to free up places at CHF 25’000 as long as the maximum number of authorized investors is respected.
Participatory investment therefore allows investors to invest in real estate with affordable amounts. It also offers great flexibility of choice: each investor decides how much he or she wants to invest in CHF 25,000 tranches in the properties that best match his or her location and yield expectations.