- Explain PropChunk in one sentence.
- What is Fractional Ownership?
- What happens if the funding goals are not met?
- What is the 'Minimum 15% p.a. appreciation or we don't make money' deal?
- Is PropChunk a partner in the Fractional Ownership deals?
- What do I get when I invest in one of the projects?
- What is the 'Hold Period'?
- What is my security?
- Can I withdraw my investment before the end of 'Hold Period'?
- What is the process to sell my share before the end of 'Hold Period'?
- Are the investments risky? Is there any assured return?
- What if there is slow growth or depreciation of the purchased property at the end of hold period?
- What are the tax implications? Do I get tax benefits like I get on taking a home loan?
Real estate investing is expensive and tedious and we're here to make it affordable and easy, by enabling small-ticket investments in highly appreciating projects with deep discounts, typically for a period of 2-5 years.
Indians love property, and it is a great asset to invest in. But investing in real estate typically requires huge amounts of money, locking out most investors. We have setup the financial structures using a Special Purpose Vehicle (SPV) based model in which many small investors come together to contribute small amounts towards a specific project development. Thus, any individual can be a Property Owner by investing as little as 1 Lakh*
The company is entitled to a grace period of 30 days within which the Company has to ensure that all the required funds are present with the company. However, in the event that the full investment amount required for this project is not raised and/or the complete process of documentation and/or partnership share hand-over is not done on or before the mentioned 'Project Close date', then in such an event the company will refund the entire amount collected from the purchaser(s) without any deductions. Note: If the payment is made through cheques, the Purchaser’s cheques will be encashed if and only if the goal amount of the campaign is reached. Otherwise, the cheques will be handed over back to the Purchaser
After the sale of the property, the remaining proceeds (after all expenses, fees, taxes, duties) from the property sale will be subjected to a 2% commission cut by the company if the total appreciation before all expenses, fees, taxes, duties is greater than or equal to 15% per annum at the time of sale. If the total appreciation before all expenses, fees, taxes, duties at the time of sale is less than 15% per annum, the company will not take any commission cuts and will transfer the remaining proceeds to the purchasers equitably. That is, if and only if the above condition is met, M/s. Chunk Technologies Pvt. Ltd. will be eligible to take 2% of the proceeds.
Yes, we put our own skin in the game. The commission is made by PropChunk by the way of holding 2% management stake in the partnership with the investors. The company agrees to and is bound to relinquish the 2% stake that it owns and distribute its associated proceeds equitably if the 15% condition mentioned in the above question is not satisfied.
In return of investment the net profits or net proceeds of a Special Purpose Vehicle will be distributed to the Purchaser in accordance to the amount invested. For example If you invest Rs. 10L in a property worth Rs. 1 Cr., you are entitled to receiving the 10% share of the net income the property makes in the duration of the your investment. In the event the Development is not completed or the said property is not sold, the term will be extended for as long as is required to sell the property and final distribution of the net proceeds is made to investors.
The ownership percentage or shares (units) are issued with a recommended investment period, example 24 months. This is the targeted “Hold Period”. The hold period commences on the date share units are issued to investors.
The #1 priority at PropChunk is Investor Protection. We have partnered with a lawyer having around 60 (yes SIXTY) years of experience in Real Estate corporate law and he has handled clients like JLL and Lodha. He does the due diligence on all the builders and their crucial documents (like Title document, Commencement certificate, etc) and all the investor MOU's are verified by him. Also, since the SPV is governed by a deed, this deed has been prepared from scratch by the lawyer and every document holds true in the court of law.
Yes, by a vote of unanimity amongst the partners, you can choose to sell their investment stake at a date before the completion of the hold period end date. But PropChunk shall have to be informed of the same by the purchaser at-least 7 business days in advance. PropChunk can, for a fee, help the purchaser sell off his/her shares before 24 months, subject to availability of a buyer at that time, for those shares. PropChunk, however, always recommends that the purchasers hold on to their investments for at-least the hold period in order to optimize their returns
You need to mandatorily offer your part of shares to the existing partners for a period of atleast 15 days before offering them to any other person(s) or company (or companies). In the same way, if the purchaser gets an offer from one of the other purchasers for the sale of their part of the shares, the purchaser has to, in writing, respond within a period of not more than 15 days expressing their interest to purchase these shares
Yes, while a lot of due diligence and vetting is done and despite the fact that these are property based, these investments can be risky and investors should assess the probability of the loss of their entire investment. Returns are based on the supply-demand dynamics of the market and hence there cannot be any guarenteed amount of return we can promise.
Firstly, in such a case, PropChunk itself will recommend you on the action that should be taken - sell, hold, or rent and the realization of the same will be subject to the consent of all investors. As mentioned in the MOU signed by investor as well as the deed, investors can also impose such decisions on PropChunk.
Firstly, there is no tax benefit if you invest in an under construction property, even if you have started paying interest on loan (Sources: Video 1, Video 2). Our ideology is to take you away from paying hefty interests on loans and allow you to invest in small ticket sizes with your savings.