Becoming an Investor
SmartCrowd provides pre-vetted property investment opportunities, transparent data, and gives investors the ability to diversify their real estate portfolios through a secure & regulated real estate investment platform.
- SmartCrowd, a regulated platform by Dubai Financial Services Authority.
- Members get access to institutional data and market valuations for free.
- You can create a diversified real estate portfolio and start earning passive income almost immediately
- SmartCrowd is entirely Digital. You can invest from anywhere in the world and there’s no travelling required.
- Low minimum of AED 500 (approx than $140) to invest in a range of different properties.
- It’s hassle-free investing. No personal property management required and you don’t need to be a real estate expert (far from it)
It’s free for you to join SmartCrowd. There’s no commitment to invest once you create an account. However, for compliance reasons if your account is dormant (you have not completed registration and/or have not invested on SmartCrowd), your account may be deleted. Don’t worry, we’ll notify you in advance to let you know what to do if you want to keep your account!
It’s simple and free! Register on the SmartCrowd platform and complete the entire process in 5 minutes.
Click here to view how simple it is to create an account on SmartCrowd: How to create your free account?
Once you’re registered, browse live properties and invest in those that align with your goals. Top up your digital wallet via a bank transfer and complete your investment. Once the property you invest in gets 100% funded, sit back, relax and watch your wealth grow.
Professional Investor: If you are classified as a “professional client,” then you will have no limitation on how much you can invest using our platform. A professional client is one who has prior experience and understanding of relevant financial markets, and a decent net-worth from their previous investments.
Retail Investor: If you are classified as a “retail client,” then you will be restricted to $50,000 over a year. According to the DFSA, an individual is classified as a Retail Client if they cannot meet the Professional Client criteria or if they opt to be classified as a Retail Client. These clients are also offered more protection because they are deemed to have less net worth, experience and understanding of relevant financial markets than a Professional Client. We are required to provide Retail Clients with certain disclosures and risk warnings that we may not necessarily provide a Professional Client. Furthermore, we will handle Retail Client complaints in accordance with specific requirements as defined by the DFSA.
SmartCrowd classifies all users as Retail Client unless the user requests to be classified as a Professional Client.
According to the DFSA Rule Book, COB Section 2.3.7, an individual can be classified as a professional investor if:
- The individual has net assets of at least USD 1 million, excluding the value of primary residence. Assets that are indirectly owned can be included in the calculation and:
- Within the previous two years, the individual is or has been, an employee in a relevant professional position of an authorized firm or a regulated financial institution OR:
- The individual appears, on reasonable grounds, to have sufficient experience and understanding of relevant financial markets, products or transactions and any associated risks.
In either case, SmartCrowd will need to verify the above information in order to classify you as a professional client.
Investment structure and SPV
You are in 100% control of funds in your digital wallet. SmartCrowd is required to provide regular reports to the regulator on the client money account as well as conduct regular independent audits on the client money account. Think of your digital wallet like a separate bank account to keep your capital safe to invest on the SmartCrowd platform . You can add or withdraw your funds from your digital wallet at any time at no charge to you. Please note: standard bank charges may apply at withdrawal depending on your bank. These charges are independent of SmartCrowd.
SmartCrowd establishes an investment vehicle, called a Special Purpose Vehicle (SPV) for the purpose of purchasing the investment property.
Each property on SmartCrowd has its own corresponding SPV. And each SPV is broken into 1,000,000 shares. For ease of calculation, if a property is worth AED 1 million, each share in that property is worth AED 1. If an investor invests AED 500 – he/she owns 500 shares in that investment or 0.05% of the property. As per the Dubai Land Department’s requirement, this vehicle will be incorporated and registered in the DIFC (Dubai International Financial Centre).
The shares are always the property of the investors and they are the ultimate beneficial owners.
SmartCrowd does not own any shares. SmartCrowd facilitates the entire process to make this method of investing possible for you.
To learn more about how Investments are structured: Click Here
A Special Purpose Vehicle (SPV) is just a fancy way of saying “a separate new entity” – it’s no different than setting up a new business.
Currently, RERA (Real Estate Regulatory Agency) cannot accommodate more than five to ten people on a property’s title deed.
In order to accommodate multiple investors on a property title deed, SmartCrowd establishes one SPV for every investment property so that there isn’t a limit on the number of shareholders that can collectively invest in a property.
SmartCrowd will form an SPV for the purposes of holding your investment. You will hold Shares in the SPV. The SPV will be managed by Smart Crowd under the Administration Agreement. Pursuant to this agreement Smart Crowd and its Directors will sign any related documents for the SPV including but not limited to articles of association, relationship declaration, transfer of shares, ordinary shareholder resolution, divestment of investments, appointment of authorize signatory on your behalf. A Director will disclose to the other directors the nature and extent of any material interests in, any actual or proposed transaction and shall refrain from voting at a meeting of Directors on any resolution concerning a matter in which the Director has a direct or indirect interest.
As an investor, you do!
You are the ultimate owner and beneficiary of the property proportionate to your investment amount.
For example, if you invest AED 500 in a AED 1M property, you own 0.05% of that property. The remaining 99.95% is held by other property investors like you! Collectively, you all earn dividends through the property.
Through this mechanism, not only can you invest in an affordable manner, but you can also reduce your risk because you can spread your capital across dozens of properties as opposed to one (i.e., as the adage goes: don’t put all your eggs in one basket!).
The SPV corresponding to the property investment.
Since it is not possible to list out dozens of names on a single title deed, the name issued on the title deed (ownership document) is that of the SPV corresponding to your property. Ultimately, you own direct shares in the SPV, which in turn is only responsible for holding the asset that is your investment property and paying out dividends to you. To see your name as a shareholder, simply go on to the DIFC public register and type the name of the SPV that corresponds to your property. Typically the name of the SPV starts with the initials “SC” followed by a hyphen and a number.
If the Total Funding Target is achieved and the Investment Round completes you will be sent a share certificate representing your Shares. If the Total Funding Target is not achieved within the relevant time period, all committed funds will be returned, without deduction of any fees or expenses to your SmartCrowd Account. You can then choose to use the returned funds towards another Property or withdraw the funds from your SmartCrowd Account entirely (the decision is yours!). Please note where you initiate a withdrawal of funds from your SmartCrowd Account via the Platform, we will return your funds to the bank account which you used to fund your SmartCrowd Account. Your SmartCrowd Account is a segregated account operated by Emirates NBD.
At this stage SmartCrowd does not allow for oversubscription. The shares in the investment are allocated on a first come first serve basis
In the unlikely event that Smart Crowd is unable to operate on a permanent basis Smart Crowd will follow its CP. Where CP is initiated, all investors will be notified via email of the wind-down , provided with their current investment statement and will be asked to use the platform to make a decision of whether to sell at current market levels or hold on to the property. If the outcome of a property’s shareholders is to majority hold the nvestment,the management of the property will be handed over to a predefined Property Asset Manager who will be responsible for administering the SPV, managing the facility manager, communicating with investors and distributing dividend income. If, at the time that the CP is initiated, and the majority decision of investors is to liquidate the investment, Smart Crowd personnel will manage and oversee the sale of Property and the return of funds to investors proportionately less any costs associated.
For a copy of SmartCrowd’s CP please write to [email protected]owd.ae
SmartCrowd will charge a 4% transaction fee for arranging the investment at completion of the Property acquisition, such fee to be calculated on the Total Funding Target. This fee will be split in two traches. 1.5% will be billed at the time of the transaction and the remaining 2.5% will be billed at the time of the exit. The exit fee of 2.5% will be calculated on the greater of the Total Funding Target or the “Exit Value” (being he value at which the Property is sold at the end of the Investment Term).
There will be annual administrative fees of 0.50% of total cumulative investments. Example if you have invested AED 10,000 in year 1 one then at the end of the year you will be charged AED 50 (AED 10,000 * 0.50%If you then further invested in AED 10,000 Year 2 bringing your total investment with Smart Crowd to AED 20,00. At the end of YEAR 2 you will be charged AED 100 ( AED 20,000 * 0.50%). If you exit any of your investments that will reduce your AUM which will result in lower annual administrative fees. Administrative fees will be debited from the investor’s wallet on December 31 every year and will be charged on a pro-rata basis.
SmartCrowd will earn fee from Sellers for using the platform to sell properties on ranging from 1-5%.
As a regulated entity, we are required to have a conflict of interest policy to identify, disclose, manage and mitigate any conflicts between us and our clients. We have put in place a Conflicts of Interest Policy which identifies those situations giving rise to actual or potential conflicts of interest and which provides details of how such conflicts are managed. Where the arrangements under our conflicts of Interest Policy are not sufficient to ensure, with reasonable confidence, that risks of damage to the interests of the client will be prevented, we will disclose sufficient details of the actual or potential conflict to you in order to enable you to take an informed decision as to whether to continue to deal with us notwithstanding the existence of such conflict.
Some of the Conflict of Interest might arise from the following but not limited to (1) Smart Crowd might use third parties such as brokers, affiliates and distribution channels to market and promote the Smart Crowd platform for which SmartCrowd would pay commission or share revenue for onboarding investors. (2) Smart Crowd in some cases will earn fee from Sellers including Developers/Brokers for using the platform to sell properties on. This fee is usually a % of property price.
We have structured a 3-stage approach to evaluate each investment opportunity in the most efficient way. The properties go through a rigorous selection process and as a result, only a small amount of them actually end up on the platform.
We work with financial institutions, property brokers and consult with independent consultants who provide their expertise. Alongside this, we use real-time market data provided by REIDIN, a reputable leader in real estate market data to ensure that our platform offers only quality properties that will provide healthy returns.
You can review the extensive details of our screening criteria here.
Yes. You have 100% control over your investment decisions. SmartCrowd only provides you with a marketplace of select, and pre-analyzed options to choose from.
SmartCrowd lists property details, including property amenities, financial data, market data, and real-time property valuation powered by an independent third party to assist you in your decision-making.
SmartCrowd does not provide any advice or recommendation. You decide how much and in which property you want to invest in.
A: You may exercise your right to withdraw from an investment up to 48 hours (“cooling off period”) from the date of the Property reaching its full funding target by notice on the Platform, emailing us at [email protected]
If you exercise your withdrawal right above, you will be entitled to withdraw the Investment Amount from the client money account subject to completion of know your customer and anti-money laundering processes.
Profiting From Your Investments
You own a share of an individual property via a DIFC Special Purpose Vehicle (SPV). The returns are issued from the SPV and you receive a share of returns proportionate to your investment as a shareholder.
The frequency of returns are based on the current tenancy contract and how many cheques the tenant pays their rent in.
The returns available to property owners are calculated as the rent collected from tenants, minus the property-related costs, which include but are not limited to, service charges, repairs & maintenance, property insurance and management fees.
Estimates of future returns are provided with the property listing on the platform. Our estimates are available for review as part of the investment process. However, it is important to note that this information is based on past performance, which cannot be regarded as an accurate indicator of future results. Smart Crowd does not provide investment advice. We only provide you with the tools and transparent market information to help make your investment decision.
Investors can sell their shares at any time, although SmartCrowd recommends a holding period of 5 years. At the end of the recommended holding term, a mandatory vote is called where investors are given the option to sell their investments at market value (each property is evaluated by an independent Real Estate Regulation Authority (RERA) approved valuator).
However, this vote can be called sooner by SmartCrowd, or any of the investors for valid reasons (i.e., there’s opportunity to make a handsome profit). The vote is based on proportionate weighting of your investment. That means, if you own 10% of the shares in a property, your vote carries a 10% weight. We don’t allow anyone to own more than 24.99% of a property. This is designed to ensure that no one is a controlling party. Here’s an example: imagine 60% of the shareholders decide to exit/sell their shares. In this case, 60% of the shares will be re-listed on the platform to replace those shareholders with new ones. If the 60% does not get funded by investors on the platform, then the property is sold in the open market and everyone is exited. Conversely, in a situation where 40% decide to sell and 60% decide to retain the investment, we will list 40% of shares on the platform. However, if we the 40% does not get funded within the funding period, the investors will have to retain their ownership along with the majority.
We are launching a secondary market in the second half of 2021 where you will be able to sell your shares at periodic intervals within a year to other investors. This will provide you with more options to exit your investment more frequently. Remember, real estate should not be treated as a speculative asset. It is a great investment for those who have the appetite to weather out short-term economic fluctuations.
Maintainance, Management & Insurance
Each property will have an assigned facility manager. All facility managers are RERA-approved and reviewed by SmartCrowd.
The investment vehicle will enter into a management agreement via SmartCrowd in its capacity as the administrator of the investment vehicle, which will assign property management to the selected facility manager.
Facility management fees are typically 3-5% of the gross rent deducted from the rental income. These charges include advertising, managing the property, collecting rents, managing tenants and works with RERA for any issues. This charge excludes VAT, legal expenses and certain costs, such as standard maintenance charges and any repair and maintenance expenses.
Managing your SmartCrowd Account
Please contact us at [email protected] with the email subject “Deactivate MFA” one of our support team members will be in touch with you to process your request
What are the payment options in SmartCrowd?
By selecting the offline bank transfer option, you will be redirected to a page that contains SmartCrowd’s bank account details and will be asked to complete the wire transfer offline either by visiting your bank or by using your banks online banking method. Usually the payment takes 3-7 days in order to be processed by the bank so please make sure to send us a proof of transfer to [email protected].
Please note that your investment will be held for 6 days only until the payment is processed from your side, if you fail to make the payment, your shares will be released back and your investment will be rejected.