Real Estate Crowdfunding: A Gateway to Investing in Mexico's Commercial Market

In the last decade, fintech and crowdfunding have become indispensable for driving investments in Mexico's commercial real estate market. Currently, there are 650 fintech companies nationwide, a 26% increase from 2022, according to Finnovista, a specialized firm in the field. These companies leverage technology to provide financial services, including crowdfunding or collective funding. This project financing model allows obtaining support from investors, funders, and donors through digital platforms. However, do you know how real estate crowdfunding works and how to invest in it? SiiLA is here to explain.

Real estate crowdfunding is an investment vehicle that allows any legal or natural person to invest in projects at different stages of development, offering high potential returns but with lower long-term liquidity than other investment vehicles such as FIBRAs (Real Estate Investment Trusts). According to the National Commission for the Protection and Defense of Financial Services Users (Condusef), crowdfunding involves three stages: in the first stage, the entrepreneur registers their idea on a platform and sets the fundraising goal. In the second stage, the investor registers as a lender on the platform and chooses the project they wish to invest in. Finally, in the third stage, the investor receives their total or partial compensation depending on the project's success.
How to invest in real estate crowdfunding in Mexico?

Since 2018, the Secretariat of Finance, the Bank of Mexico, and the National Banking and Securities Commission (CNBV) have regulated both fintech and crowdfunding. In Mexico, there are two primary crowdfunding vehicles: Institutions of Electronic Payment Funds (IFPEs), which focus on the issuance and administration of electronic money balances for payments and transfers, and Institutions of Collective Financing (IFCs), which are authorized to carry out financing operations in the form of debt, equity, or co-ownership. Currently, 32 IFPEs and 17 IFCs are endorsed by the Mexican Government, according to the latest data from the Registry of Financial Services Providers (SIPRES).

To invest in real estate crowdfunding, the first step is to choose a reliable fintech platform and create and verify an investor profile. Among the government-authorized IFPEs are companies like Mercado Libre, Sí Vale Fintech, and EDENRED Mexico Fintech, as well as IFCs like Grupo Finansiell, Cien Ladrillos, and Monific.

The investment amount varies depending on each financial institution, but investing from 500 pesos (29 dollars) is possible. Once registered, it is essential to explore investment opportunities, invest, and monitor the investment progress. At this point, it is necessary to analyze key aspects of the property, such as location, expected return (typically ranging from 10% to 20%), and the investment term. It is important to note that investing in real estate crowdfunding carries risks, and it is advisable to seek appropriate financial advice. Before investing, carefully analyze the information provided by the platform and evaluate your risk tolerance.

To maximize your investments, SiiLA offers intelligent solutions for the commercial real estate market, such as Market Analytics, allowing you to access information on property, market, and institutional actors. For more information and insights, contact us at contacto@siila.com.mx.