Modern-day innovations in financial services have reached a new height – Australia’s first crowdfunding campaign to finance a mortgage-backed loan has been successfully completed by DomaCom (ASX: DCL), a fintech property investment solution for self-managed super fund (SMSF) holders.
DomaCom has completed a crowdfunding campaign to service a mortgage-backed loan to the tune of A$1.6 million.
Financial advisory firm Shartru Wealth Management has used the DomaCom platform to acquire a A$1.6 million residential property in Melbourne using both debt and equity.
DomaCom helped raise approximately A$682,000 for the equity portion of the deal and a further A$948,000 in a separate campaign for the debt component.
The milestone means Shartru will generate an estimated net return of around 5% per year in a “low-risk environment” and has potentially set an example for other fintech companies. The loan is secured by a first mortgage security on residential property with a conservative loan to value ratio (LVR) of around 60%.
“It is great to be finally able to deliver a tax-effective investment for our growth-oriented clients whilst also being able to deliver an attractive income investment to our retiree clients. An investment option returning 5.06% and secured by a first registered mortgage with a low LVR is attractive in today’s environment where retirees are lucky to receive a 2.5% return from term deposits,” said Rob Coyte, chief executive officer of Shartru.
Gearing up for innovation
According to DomaCom, it intends to use “internal gearing to deliver long-term tax effective returns” while offering clients a range of investment opportunities via the DomaCom platform.
“Advisers can now fund both the equity and the debt portions of a property investment, which enables them to provide the appropriate investment outcomes for both accumulation and retiree clients,” said Arthur Naoumidis, founder and chief executive officer of DomaCom.
“We are now looking forward to accelerating our funds under management with these new debt facilities, particularly in the SMSF space. SMSFs can have a precise asset allocation to real property via DomaCom, including debt, without the need for a bare trust, limited borrowing and with all the additional administration and cost involved,” Mr Naoumidis added.
DomaCom’s overarching vision is to liberate the property market for all investors by effectively making smaller investment chunks available to investors and using an online portal to make the process clear and transparent.
Led by its founder’s vision, DomaCom facilitates fractional investment and therefore changes how people invest in property.
According to DomaCom, its property market novelties help to improve the market as a whole and assist investors and investment advisors to achieve their goals more efficiently and with lower risk.
“With a managed fund like DomaCom and with access to debt, advisers have an internal solution to help clients access investment property and fixed interest income in line with their portfolio strategy as part of the adviser’s fee for service. This is something DomaCom has been working towards for three years”, said Mr Naoumidis.
DomaCom’s share price was unchanged at A$0.065 in late morning trade.