Crowdfunding of Mallorca real estate

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In this article you will read everything you need to know about crowdfunding Mallorca real estate: how it works and what it brings.

CPH Invest GmbH is the market leader in privately financed real estate on Mallorca.

Especially if you are thinking about buying a Mallorca property, you should know everything about crowdfunding Mallorca real estate , especially about financing and taxes and the quality of the real estate market on Mallorca. Because with crowdfunding you invest a comparatively small amount and benefit from the know-how of the market leader.

Real estate crowdfunding comparison

As an investor, what do you need to know when investing in the various real estate crowdfunding offers? Of course, first the basics. Regardless of whether you are investing in real estate crowdfunding on Mallorca or in Germany. Of course, this article does not replace a personal conversation. At the end of this article you will find the option to register for our free webinar on the subject. Because it is important to us that you know exactly where and how your money is invested.

Why real estate crowdfunding is so popular

Crowdfunding is popular because it is a concrete, comprehensible investment product and it also generates high returns with short to medium-term maturities.
Small investors in particular are looking for security and high returns in real estate crowdfunding. However, every investor knows that security and returns are polar opposites. The higher the security, the lower the interest rate that a bank offers.
Crowdfunding of real estate projects delivers a return that is often between 5% and 8% per year. But how safe are these systems?
Crowdfunding is awarded as a subordinated loan in over 90% of cases. The investor waives preferential treatment in the event of insolvency. So he only gets his money out again when all other creditors have been satisfied.
Instead of crowdfunding, you often read the term mezzanine financing. For you as an investor, the result is the same: in the event of insolvency, you lose all your claims and are served last, after all other creditors.
Hence the risk warning for all crowdfunding campaigns: “The acquisition of these investments is associated with considerable risks and can lead to the complete loss of the invested assets.”
As an investor, you should therefore ask yourself: how much loan (subordinated loan) or equity (mezzanine) does an initiator of a crowdfunding campaign take out? And what advantage do I have as an investor if I don’t invest directly with the issuer but via a platform.

Invest directly or through a portal?

The legislator sets strict limits on public crowdfunding so that companies can borrow money directly from their customers. The reason is to protect small investors. At CPH Invest GmbH, public issues are limited to EUR 100,000 and are available to a maximum of 20 investors.
Personal contact with the investor is important to us. Because we want to be transparent. Because we believe that it is particularly attractive for you as an investor to invest directly with a company you trust.
More on that later.
We are a niche provider. With crowdfunding, the vast majority of funds are raised through intermediaries, the so-called portals. These are financial intermediaries according to paragraph 34f of the trade regulations. The portals must provide evidence of financial loss liability insurance before they become active.

Which properties should you crowdfund to invest in?

Which real estate you should invest in is not just a question of personal taste. Of course, the location and facilities are advertised in the glossy brochures. Of course they also play a role. Because the end customer – i.e. the customer who ultimately buys the property – should of course feel comfortable and fall in love with his property at first sight.
But one question is much more important for you as an investor: what happens if the provider of a crowdfunding issue goes bankrupt? Then what happens to your money?
Basically and always with an investment there is the risk of a total loss.
But regardless of this, the question arises as to the debt of the issuer.
And how this debt is structured. Are there creditors who have direct access to the property before you and how many creditors have to wait for “the rest” to be distributed?
And if there are these believers, who are these other believers? Is it perhaps banks that have “over-collateralised” themselves? Then there is no bankruptcy estate left.

Financing structure of a typical crowdfunding property in Germany

If we look at the market leaders in real estate crowdfunding in Germany, then typical financing looks like this:
Around 60% of every 1 million investment comes from banks, i.e. EUR 600,000. If one assumes that in the event of insolvency the promised EUR 600,000 mortgage has not yet been paid out, then the property has not yet been completed and the forecast market values have not yet been reached.
If one continues to assume that the market value of a ruined building is subject to a significant discount, one comes to the conclusion that subordinate creditors get little or nothing in return.
After all, crowdfunding investors don’t have to inject good money. Small consolation.

Our company CPH Invest in the fact check

Our real estate projects are financed differently. The background is that Spanish banks generally do not finance construction projects based on the German model. This can have the advantage for investors at CPH Invest GmbH that there are no preferred creditors. You benefit from the fact that properties are only deposited with subordinated loans. This means that all creditors are equal in every investment. In addition, CPH Invest GmbH finances only plots of land for single-family houses and semi-detached houses that can be divided according to land register law. As an investor, you know exactly what property you are investing in.

Register now for the free webinar on crowdfunding from Mallorca Immobilien

Crowdfunding of Mallorca real estate: how it works and what it brings. In this webinar we show the only three ways to make money with Mallorca real estate. Also interesting for customers who are thinking about buying a Mallorca property: everything about crowdfunding Mallorca real estate, financing, taxes and the real estate market in Mallorca.

Our crowdfunding is flexible thanks to various models. Also exclusive: which four most fatal sources of danger you absolutely must know. Why most people don’t make money with Mallorca real estate and what you can do differently with the only three existing business models.

all projects in the fact check

In the free webinar on real estate crowdfunding in Mallorca, you will learn everything about our projects that have already been completed, about our projects that have already been placed but are still under construction. And of course everything about future investment opportunities.

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