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Rating System

icrowdhouse has implemented a rating system in projects that measures the relative risk-adjusted performance of an individual series of Note. These have a scale that goes from «A1» to «E3», which represents the level of lowest and highest risk respectively.

For example, a C rating would connote more risk than a B rating. Therefore, an investor would expect to receive a higher return on a C rated project than a B rated project as a result of the relatively higher project risk. It does not imply that an investment is inherently better, worse or more suitable for an individual investor. Next, we tell you in detail how they work.

Understand the rating of projects in icrowdhouse

Icrowdhouse´s rating It´s not a measure of the quality or suitability of the project - and should not serve as a replacement for individual due diligence.

Rating projects

icrowdhouse has implemented a rating system in projects that measures the relative risk-adjusted performance of an individual series of Note. These have a scale that goes from «A1» to «E3», which represents the level of lowest and highest risk respectively.

What do we measure?

The ratings are an indicator of the viability of the project, the reliability of the Promoter team, the equity of the proposal to Investors and the environment in which the project is developed.

What data is used?

The ratings are based on information obtained from the promoter team during the initial phase of the financing procedure: description of the asset and the operation, business plan, financial plan, asset valuation, legal and technical information and market research. This information should be clear, timely, sufficient, objective and not misleading and should allow to an average investor, a well-founded judgment on the project financing decision.

Important Note:

The icrowdhouse rating is not a measure of the quality or suitability of the investment and should not serve as a replacement for individual due diligence. It is important to note that the classification system is not similar or comparable to the ratings of agencies such as Standard and Poor's or Moody's.
The icrowdhouse due diligence process is rigorous, we take pride in providing investment opportunities in high quality real estate projects with experienced developers.
Icrowdhouse´s ratings are only informative. Each rating has no personal character, is not valued individually and does not take into account the financial situation of a specific investor. Nor is it an investment advice. These ratings are not intended and should not be interpreted as an estimate of how a particular investment will actually work. Each investor must carefully value their investments, whatever the value, feel comfortable and understand it. You as an investor may also consider seeking independent professional advice.

Rating system

A1 Very low risk
Solid projects from the financial point of view, which have a structure of social capital and balanced indebtedness and a treasury planning without uncertainties. Projects where the quality of its assets is clear and has a solid market based on product and price. Managed by a promoter team that has an excellent track record and operates in an solid environment without variations.
A2
A3
B1 Low risk
Financially viable projects, which have a good social capital and debt structure and a viable treasury planning. Projects where the quality of its assets is potential and have access to the market based on product and price. Managed by a promoter team that has a good track record and operates in a potential environment.
B2
B3
C1 Moderate risk
Stable projects, but with a weaker financial statement and a medium market position. Projects where the reality of the asset require further development. All this managed by a promoter team with relevant experience or operating in a less developed environment or characterized by greater uncertainty.
C2
C3
D1 High risk
Projects with financial performance and a market position with considerable weaknesses. Its competitive position is limited or the quality of its assets is below average. Its history is limited, its management team does not have experience or operates in an environment subject to considerable risk characterized by uncertainty.
D2
D3
E1 Very high risk
Speculative projects, with insecure financial performance and market position.
E2
E3

Evaluation Methodology

ICrowdHouse Rating sets a numerical score on your Project Analysis. Project Analysis is a quantitative method to measure eight key risk criteria in a real estate investment. Each of the eight criteria are evaluated and scored with the corresponding number of points, resulting in a total numerical score ranging from 6 to 20 points.
A score of 6 points will result in an A1 rating, a score of 7 points will result in an A2 rating, a score of 8 points will result in an A3 rating, a score between 9 and 11 points will result in a B1-B3 rating and so on. 20 points or more will mean an E3 rating

Minimum requirements:

  • Amount to be financed: cannot exceed 2 million euros to qualify for all types of investors and 5 millions of euros to exclusively qualify for accredited investors.
  • Project term: up to 60 months
  • Indebtedness: maximum 80%
  • Developer capital: minimum 10%
  • Developer experience: Minimum of 5 times the project to be financed. If you request 1 Million Euros you must prove minimum experience for 5 Million Euros.
  • Legal aspects: investment articulated through a Limited Liability Company, appraisal and Fair proposal.
  • Minimum C3 rating (14 points).
IndebtednessNotesPoints
0%—–1
1-50%—–2
51-70%—–3
71-80%More than 80% would not meet one of the minimum requirements4
Promoter CapitalNotesPoints
40% or more—–1
30-39%—–2
20-29%—–3
10-19%Less than 10% would not meet one of the minimum requirements4
LocationNotesPoints
ElementaryMain Urban Areas1
Middle SchoolSecondary urban areas2
TertiaryRural or emerging areas3
MarketNotesPoints
PessimisticBelow the market price (-10% or more)1
RealisticAt market price (appraisal)2
OptimisticAbove market price (+ 5% or more)3
Development phaseNotesPoints
StabilizedExisting asset without any notable improvement1
Value addedExisting asset in need of rehabilitation2
PromotionNew assets New Plant Works3
Developer ExperienceNotesPoints
More than 10 times the value to be financed—–1
Between 5,1 and 10 times the value to be financed—–2
5 times the value to be financed—–3
Personal GuaranteeNotesPoints
SiThe developer provides personal assets as a guarantee in the investment-1
NoThere is no personal guarantee from the promoter0
Investment vehicleNotesPoints
Newly constituted SL—–0
Existing SL—–1
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