Touted as “Singapore’s best-kept secret” by its CEO and founder, Quah Kay Beng, BigFundr (BFD) stands out as a retail investment platform.
BFD promises 6 to 6.5% annual net return in short-term (three to 15 months), fixed-term real estate-backed loans, requiring as little as $1,000 as starting capital. Notably, BFD’s partner-shareholder, Maxi-Cash, guarantees principal and interest amounts.
Quah says he and his team aim to “democratise investments for everyone” by providing retail investors access to real estate debt investment opportunities previously only available to institutional or high-net-worth investors. Quah was speaking at the Australian Real Estate: Beyond Traditional Returns seminar on Jan 20 at Marina One Auditorium, organised by The Edge Singapore and supported by BigFundr.
Real estate debt investment offers an alternative approach to investing in real estate. Instead of outright property acquisition, investors provide a line of credit to real estate developers, earning interest on the principal amount.
BFD statistics show that 2023 saw 2,600 users on the platform invest $150 million across 99 loan notes, with an average investment amount of $56,900. A total of $6.6 million was disbursed as interest for the year, and 72% of users reinvested. As of January, BFD has $74 million under management. Interest is paid out to investors every month to their BFD accounts, and their investments can be withdrawn as long as they meet the minimum withdrawal amount of $20.
Licensed by the Monetary Authority of Singapore (MAS) to accept investments or funds from investors, Quah and the BFD team go the extra mile with “four layers of protection,” ensuring a robust guarantee for their retail investors.
The first layer consists of capping the borrower’s loan-to-value (LTV) ratio at 70% and acquiring the first legal charge on the real estate development. Acquiring the first legal charge gives BFD the highest priority a lender can have: BFD can claim or sell whatever assets remain to recoup their loss if the loan defaults.
Next is securing a corporate or personal guarantor for the loan. This ensures that if the borrowing entity cannot repay the loan, the guarantor is still liable for the remaining amount.
The following layer is securing buy-back provisions with fund management companies, allowing BFD to liquidate themselves from their position should they need to. The final layer of protection hinges on the deed of guarantee forged between BigFundr and Maxi-Cash Capital Management. As of January, BFD proudly boasts a 0% default rate.
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Maxi-Cash and BigFundr partnership
Maxi-Cash Capital Management is a wholly-owned subsidiary of Aspial Lifestyle 5UF . “BigFundr has a very compelling offering,” says Meelan Gurung, senior director of Aspial Corp, who participated in the panel discussion moderated by EdgeProp Singapore’s associate editor, Timothy Tay. Gurung adds that the BigFundr online platform offers a means for lower-value loan notes to be fulfilled quickly.
He adds that the BigFundr online platform efficiently fulfils lower-value loan notes, and they “plan to go all the way” with the investment platform. On Aspial’s deed of guarantee with BigFundr, Gurung remarks that Aspial is careful not to go beyond its means. But based on the current size of projects on the platform, which are mid-sized developments, he feels “very comfortable”.
Small and mid-sized property developments funded by BigFundr are from A$15 million ($13.2 million) to A$50 million. Compared to large developments and high-rises, these are easier to complete, market and sell.
Gurung adds: “In the worst case scenario if there is a situation in which [Aspial] would have to go in and take over a project from a development perspective, we’re going to be able to do so.”
see also: Real estate dilemma could happen Down Under: CBRE
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