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Thread: Crowdfunding basics

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    New Member ruanh's Avatar
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    Crowdfunding basics

    Hi forum members,

    I'm not sure if anyone will be able to help me, but I thought it's worth a try given the amount of resourceful business people on this forum.

    I'm located in Namibia, and want to start a Crowdfunding platform - equity funding - entering the real-estate sector. After a few frustrating Google searches, I was unable to really understand what needs to be done before setting up this kind of platform.

    Where would I start, with regards to legal hurdles & financial protection?
    Would this be a very costly exercise to get off the ground?

    Anyone with some expertise in this area in SA, please do offer your knowledge. Namibia has a similar legal environment so it will at least give me an idea of what needs to be checked first.

    Best regards
    Ruan

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    Diamond Member adrianh's Avatar
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    The first thing to do is to get yourself educated in matters of law and of finance before you try to run with the big dogs and pee in the long grass. The big dogs in Namibian law and finance will eat you up and spit you out before anybody gets to pledge their first 5 cents. You are simply out of your depth.

    I am not attacking you, I am simply saying that you are trying to build a space shuttle without understanding the fundamentals of Newtonian physics.
    How easily someone is offended is directly proportional to how stupid they are.
    ~GS Elevator

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    New Member ruanh's Avatar
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    Hi Adrian

    Perhaps I should have stated in my initial post that this idea is relatively new to me and I just started with my research. I have a good understanding of the financial and legal sector, being in collateral/securities and business banking for 5 years as well as having been in the property market now for several months.

    I know this can be done. In the meantime I'm looking at the prospects of starting a a real-estate investment club, registered as a trust or company to get the ball rolling. My reasons for this is to enable professionals that earn a decent salary, but are excluded from the property market due to the incredibly high cost of purchasing property, to own their share in this market. My view is that it's better to own a small share of something than a large share of nothing.

    Ultimately I want a Crowdfunding website/platform that is legally watertight and complies with taxation laws, functioning as the main vehicle for this type of business activities. My reason for this post is hopefully to draw knowledge from someone with more specific expertise in these areas. Perhaps I am out of my depth, but If I was going to build a space shuttle without understanding the fundamentals of Newtonian physics, I would set out to find those who do and ask them to help me build it!

    Thanks for your input nonetheless. I sure do seem to have a lot of research to do and many hurdles ahead of me.

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    Diamond Member adrianh's Avatar
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    Well put....I eat all my words...

    Are you looking to involve only Namibian investors?

    Are you based in Windhoek?
    How easily someone is offended is directly proportional to how stupid they are.
    ~GS Elevator

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    New Member ruanh's Avatar
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    Quote Originally Posted by adrianh View Post
    Well put....I eat all my words...

    Are you looking to involve only Namibian investors?

    Are you based in Windhoek?

    Yes I'm based in Windhoek.

    For now, I think keeping it local would be a smart strategy. For example, first involve only Windhoek investors, then include the whole of Namibia, thereafter expand it to include South African investors. I'm not sure yet to be honest! What would you advise? There are many real-estate opportunities here that I feel South Africans can take advantage of, especially those looking to perhaps relocate to Namibia as I know some do.

    Just a little more about my thoughts on Namibia in general:

    The Windhoek property market recently reached a median-house price figure of R 1,000,000 for the first time and there are no signs of a slow down in sight. Demand remains high and land servicing is slow. There is massive and rapid expansion of clustered residential developments on the outskirts of Windhoek (between 8km up to 60km outside the city) which many locals feel is too far of a drive, but someone from Gauteng for example would see that as a normal distance. The B1 road between Windhoek and Okahandja is currently undergoing redevelopment into a double lane highway, which will also speed up these residential developments even more. Okahandja itself has always been a very small town, but being nearest to Windhoek and with the demand so high, it is the obvious next destination and I think it's going to explode with development. In the last year, a shopping centre & the SAB Brewery was completed there which are obvious signs of investor confidence.

    Rental yield in these areas is also very good.

    Of course the "investment club" would not only focus on residential but commercial property too, which is increasingly demanded.

    Although Namibia's currency is pegged to the Rand, and consumables are priced somewhat higher than in SA, the economy is projected to grow by up to 5.5% in 2016. Combine that with a strong financial sector, a very capable government and a rapid urbanisation trend, this is a sound investment environment!

    What are your thoughts?

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    Site Caretaker Dave A's Avatar
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    Quote Originally Posted by ruanh View Post
    Although Namibia's currency is pegged to the Rand, and consumables are priced somewhat higher than in SA, the economy is projected to grow by up to 5.5% in 2016. Combine that with a strong financial sector, a very capable government and a rapid urbanisation trend, this is a sound investment environment!

    What are your thoughts?
    That sounds absolutely marvellous!
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member adrianh's Avatar
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    @ruanh - I don't know much about these things other than that big dogs gobble the little guy up unless the little guy knows his stuff.

    Forget about my comments....consider them to be the ranting's of a w1$eA$$
    How easily someone is offended is directly proportional to how stupid they are.
    ~GS Elevator

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    Gold Member Houses4Rent's Avatar
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    Maybe get some ideas here:
    http://www.wealthmigrate.com/
    Houses4Rent
    "We treat your investment as we treat our own"
    marc@houses4rent.co.za www.houses4rent.co.za
    083-3115551
    Global Residential Property Investor / Specialized Letting Agent & Property Manager

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    Site Caretaker Dave A's Avatar
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    Looking at the wealthmigrate website, I suspect a similar operation in SA might have to register with the FSB as a financial service provider of some sort.

    One of the key issues is going to be the taking/receiving of deposits...
    The trouble with opportunity is it normally comes dressed up as work.

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    Platinum Member sterne.law@gmail.com's Avatar
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    You can use the stokvel or co op as a way around, at least initially.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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