The secondary market was a long-awaited tool for our platform and we are happy to announce that now it is available for our investors. For those who are not yet familiar with the concept of the secondary market – it is a place where investors sell their property claim units before its maturity date as well as buy the ones that are not listed anymore on the primary market. And below, we will guide you through the functionality of it as well as answer the questions You might have already.
In the “Properties” section You will find two markets – primary and secondary. After choosing the secondary market, you will see the list of all properties that currently have at least one claim unit for sale. Also, You can see how many claim units are currently available for this particular property.
After opening the details of the project, you will see its full description as well as on the right side you will see a graph which indicates the “Reflection of the market state”. It shows the information such as, how many claim units are currently available for sale, what is the cheapest claim unit, the most expensive and the amount of investments you should invest in order to buy at least one claim unit.
For example, you want to acquire 100 claim units for 0.99 EUR per claim unit, but currently, there are only 70 claim units available at this price. In this case, You need to make a decision either to buy just 70 claim units or purchase an additional 30 for the higher price – 1.00 EUR per claim unit. Also, please, note that the cheapest claim units always will be bought first.
After specifying the amount which you want to invest on secondary market, you will see:
- The price per one claim unit;
- The amount of claim units you are able to buy at this value;
- The net amount you are investing;
- The amount of fees, which is 1% of the net amount invested;
- And finally the total amount of the transaction.
At the next step, we will kindly ask You to confirm your intentions and thus approve the investment. In order to do that, make sure you get acquainted with our General loan terms and tick the box that confirms your agreement.
Congratulations on making your first investment through our newly baked secondary market! Now let’s take a look at your account and see how these transactions are displayed there.
Besides seeing each transaction you make, on the right side you see the main information about your account. Also the income statement report can be found there.
My investments section will show in what properties have you invested, how much did you invest, the income you have received, as well as how many of your claim units are currently listed for a sale on a secondary market.
The secondary market can be used for achieving a variety of goals. Some might invest in great properties which were funded years ago, some might buy claim units on a discount, thus reaching new heights for their ROI. But the main advantage of it is that now you are able to reinvest your monthly payouts! Now You don’t need to wait until your account balance reaches 100 EUR (min investment amount at Reinvest24) and put your money to work for you even in a more efficient manner.
If you wonder where a certain amount of money invested might bring you? No worries! We are not clairvoyants, but our investment calculator sure can help you. Just type in the value you would like to reinvest, add the average yield of the project you are aiming to invest and see how it does the magic of calculations for you.
One more remarkable advantage of the secondary market is the fact that now your investments become more liquid. It means that You can exit the property whenever you want to do it (after it is fully funded).
In order to do that, you need to visit the “My investments” section in your Reinvest24 investor’s account. Similar to the last steps, You will see the list of properties you invested in. Just choose the one you want to list on the secondary market and click the sell button. Now you just need to determine how many claim units you want to put up for a sale, as well as the price per one claim unit. Please, note, that you can determine any price you want (discount or premium).
At this stage you are also able to see the expected income or losses from selling. Kindly remember that the initial value of the claim unit is 1 EUR and everything that is lower than that is a discount (read loss). And accordingly everything that exceeds – Your profit.
Now it’s done! As soon as other investors purchase them, your claim units are sold and you will receive your money immediately. Also, these transactions will be visible in your investor’s profile.
You can also cancel an earlier created order, if you change your mind or in case the order was placed mistakenly.
Below we have listed questions that might help you to get acquainted with the secondary market concept even further.
1. What is the transaction cost on the Secondary Market?
At the moment, the secondary market has the same terms and fees as our primary market – 1% for buyers and 0% for the seller.
2. When can I sell my claim units?
The claim units can be sold any time, after the property is fully funded.
3. Where can I see the discounts if there are any?
The initial value of the claim unit is 1 EUR, therefore if you buy claim units cheaper – it is considered to be with a discount. For example, the claim unit per 0.98 EUR comes with a -2% discount. The claim unit per 1.02 EUR comes with a +2% premium.
4. How many claim units are available on the Secondary Market for each property?
Under the “Properties” section – there is a “Secondary market” filter. This will display all the properties with the claim units available for buying at Secondary Market. The amount of available claim units and their prices are displayed in the “Reflection of the market state” graph.
5. When I want to sell my claim units, what price can I set?
There is a limit of +/- 50% per claim unit price in order to avoid any unrealistic prices such as 1000% premium per unit. However, bear in mind that cheapest claim units will be sold first.
6. Where can I see the claim units I have listed for sale?
All your claim units are visible in the section “My investments”. It is possible to see how many claim units of a particular property you have, as well as how many of them are currently listed for a sale on the secondary market.
7. How can I declare the capital gains from the Secondary Market ? Will you supply the tax report?
Reinvest24 does provide the income and tax report and all capital gains/losses from the secondary market transactions are listed there.
8. How long are the sales offers active?
The sales offers are active for 30 days or until the order is cancelled.
9. Can I list for a sale the claim units in default/overdue?
Yes, the sellers are allowed to list any claim units they own.
10. If I buy the claim units from the rental property, how are monthly dividends shared?
The income for the whole month will go to the user who holds the claim unit at the time of the income payout. For example, the seller owned claim units for 29 days and the buyer owned it for 1 full day of the month, in this case, the buyer will receive all the dividends accrued during the period of 1 month.
11. Is it possible to sell partially?
Yes, it is possible to sell the claim units of your property partially. Besides, you can determine different prices per each claim unit.
We hope you are now more educated about how things are working on our secondary market. If you still have some questions left, please, do not hesitate to reach us out (support(at)reinves24.com) and we will be more than happy to assist you.