Frequently asked questions

At Vihorev, we prioritize the security of investments made through our P2P real estate investment platform, Fintown. To achieve this, we structure loans on the platform in form of mezzanine loans, that are directly tied to operating and developed property. 

It is important to mention that Banks usually participates in projects that are evaluated as viable by internal risk management.

Each property is carefully evaluated to ensure it has an estimated market value that fully covers all costs, including payments on a Senior loan and Fintown loan, in the unlikely event of bankruptcy. 

The Borrower always invests its own equity in each project (skin in the game), average of 20%.

To maintain maximum transparency of capital structure in each project, there are only  Bank, Fintown, and the Borrower (Vihorev.Investments SE)  involved in each project. Detailed information on structure and estimated costs can be found in the project details for your review.

Our projects include rental apartments that generate consistent positive income starting from 2019, which is used to cover both Senior and Fintown loan costs. This information is disclosed in each open project, giving investors transparency on the project's revenue streams.

Borrower doesn't rely on rental income from apartments to make interest payments. Instead, Vihorev.Investments.SE receives fixed payments from Honest Apartments on a monthly basis that are enough to cover loan costs (regardless of whether the demand for apartments fluctuates).

This means that Vihorev always has enough money to pay the interest and repay the investment in Fintown. Fintown then distributes the payments to investors.

Creating an account on Fintown is required to access our investment opportunities. As a registered user, you will have access to your personal Fintown account, which allows you to manage your investments and track their progress. Additionally, having an account grants you full access to all features and functions of our platform.

To register for an account on Fintown, you must be a natural person who is at least 18 years of age and have a valid bank account denominated in Euro.

To register for an account on Fintown, you will need to provide the following information:

• A valid email address

• Details of your bank account, including the prefix, account number, and bank code

• A valid mobile phone number

This information is necessary to ensure the security and accuracy of your account, and to facilitate the investment process.

Yes, you need to verify your identity to invest on our platform. We use the automatic service, Identomat (identomat.com), which can verify your ID by scanning your document. If you encounter any problems during registration, please send us an email, and we will assist you.

Yes, please provide us with the information of your company via the email info@fintown.eu. We will create for you a business profile where you can add all your colleagues and invest from this account.

Only registered users who understand the potential risks associated with investing are eligible to invest on our platform.

To invest on our platform, you must be a registered user, complete a verification payment, and have sufficient funds in your account to cover the desired investment amount. Additionally, you must be logged into the platform and have a valid mobile phone number.

To invest in a particular opportunity, you must first log in to the platform. Then, navigate to the page dedicated to the investment opportunity and click the "Invest" button. Select the desired investment amount and confirm the investment by clicking the "Invest" button again. We will then send you an email confirming your investment. The actual transfer of funds may vary depending on the specific investment product.

Rental Product:

• Funds are debited instantly from your account and invested in the rental product.

• Interest starts accruing on the same day, and the investor can monitor the accrual of interest on a daily basis.

• Interest is paid to the investor's account on a monthly basis.

• The minimum investment period listed in the project description.

• After the minimum period, the investor can withdraw the entire invested amount. Interest stops accruing on the day of withdrawal, and the funds will be credited to the investor's account at the beginning of the next month.

Development Product:

• Upon investment, funds are locked in your account during the fundraising period.

• In case of unsuccessful fundraising, the funds will be released, and the loan will not be obtained by the developer.

• If the fundraising is successful, the invested amount will be transferred to the developer's bank account. You will be notified by email when the funds are sent.

• The investment period is equal to the project period, which means that you cannot withdraw money before the end of the project.

• Interest is credited to the investor on a daily basis.

• Payment to the current account is made monthly, quarterly, or annually, depending on the terms of the project.

The minimum investment amount on Fintown is usually 50 EUR.

The invested amount must be within the limits of the minimum and maximum amount specified for the investment opportunity. These limits are presented on the investment opportunities page. Additionally, the invested amount must be rounded up to the nearest whole number.

For Rental products, you can cancel your investment after the minimum investment period has expired. However, once an investment has been made in a Development product, it cannot be canceled. The invested funds will be returned to you in accordance with the investment parameters or in the event of unsuccessful fundraising.

If the fundraising target is not met, all funds blocked in your account in connection with this investment will be released, and you will be able to use them again at your discretion.

To transfer funds to your account, you must initiate the transfer from your bank account that you provided during registration. The account number for payments can be found on the "My Account/Deposit" page. When making the payment, you must include your ID on the Fintown platform as the reference.

The Fintown bank account is denominated in Euro, and if you make a transfer in a currency other than Euro, we will convert the amount to Euro using the current exchange rate offered by the bank where we have an account.

To withdraw funds from your account, you can initiate a transfer from the "My Account/Withdraw" page. You can specify the amount you wish to withdraw within the available balance on your account, and the funds will be transferred to the bank account you provided during registration.

On Fintown, you can invest in loan agreements entered into by the company with developers through participation. These agreements provide funds for the implementation of real estate projects listed on the investment opportunities page.

Participation gives the investor the right to share in the income and losses resulting from the loan agreement between Fintown and the developer. The share of income and losses is proportional to the amount of the investment for which the investor acquired the participation.

For example, if an investor acquires a participation worth EUR 1,000 (he/she invests EUR 1,000) on a loan whose principal amounts to EUR 100,000 (investment target), he will receive 1% of the total income belonging to the investors under this loan agreement.

The distribution of the proceeds of the loan agreement between the Investor and Fintown is as follows:

• Principal: 100% to Investors

• Interest: 100% to Investors

• Interest on late payment: 100% to Investors

Contractual penalties:

• Contractual penalty for non-fulfilment of drawdown conditions

• By deliberate action: 100% to Investors

• By inadvertent action: 100% to Investors

Other contractual penalties resulting from breach of the loan agreement: 50% to Investors, 50% to Fintown

Note: If there should be a change in the above-mentioned method of distribution of performance from the loan in relation to a specific investment and loan, the Investor will be clearly and visibly notified in advance by the Company before the investment is made.

Loss from the loan agreement, in which the investor also participates after obtaining the participation, is limited to the amount of the investment for which the investor obtained the participation.

We will transfer the appropriate part of the proceeds to your account no earlier than the day on which we receive the payment in the bank account in accordance with the loan agreement, but no later than on the second business day after the day on which we receive the payment. The frequency of payments shall be determined by the terms of the investment. However, accruals will be made daily, and you will be able to observe them.

For Rental product, you get the participation immediately. For Development product, you get the participation if there is a successful fundraising. From that moment on, you are a participant in the loan agreement in question.

Conditional participation arises when the investment is made and expires at one of the following times:

• Successful fundraising

• Unsuccessful fundraising

In the first case, you get the participation. In the second case, the funds previously invested in the given investment are returned to you.

Only Fintown has a direct legal relationship with the developer. There is no legal relationship between the investor and the developer.

Fintown has the right to terminate your participation even during its duration. At the same time, Fintown has the obligation to pay you the received and unpaid revenues in relation to such participation and to pay you the market value of such participation. Fintown has set up this right as a safeguard in the event that the law no longer permits Fintown to operate this business.

In the event that the developer defaults on the loan repayment, Fintown will take active and immediate steps to resolve the situation while taking into account the interests of the investors and the specifics of the given project. This may include checking the developer's current financial situation, proposing possible procedures to recover the debt, preparing necessary documents, and attempting to reach an amicable agreement with the developer. If an out-of-court agreement cannot be reached and if the developer has assets to cover the obligations or a reasonable part thereof, legal proceedings may be initiated. Fintown will also continue to explore other options to convert the developer's claim into a more liquid asset such as selling the claim to a third party, concluding a court settlement or mediation agreements. In extreme cases, if criminal conduct is suspected, Fintown may contact law enforcement authorities with the relevant information. It's important to note that Fintown will always act in the best interest of its investors and will work towards recovering the maximum amount of funds possible.

To invest in an investment opportunity, log into the platform and click on the "Invest" button on the page dedicated to the investment opportunity. Enter the investment amount within the minimum and maximum limits and confirm the investment by clicking the "Invest" button. An investment confirmation email will be sent to you.

By investing, you will receive participation in the loan for rental projects, and conditional participation which will automatically turn into participation upon a successful fundraising for other types of projects.

Fintown does not charge any fees on its investors for using our platform services. However, please note that certain banks or payment systems may charge a commission fee for transferring funds to and from the platform. This commission fee is beyond the control of Fintown, and the specific commission amount may vary depending on the bank or payment system used by the investor. We recommend that investors consult with their bank or payment system provider to understand any potential transfer fees.

The lender in the agreement is Fintown s.r.o. and the borrower is the developer.

Yes, each loan agreement is tailored to the individual needs of the project. The purpose of the loan, such as financing a real estate purchase or construction, is outlined in the contract and on the investment opportunity page.

Before a developer can receive a loan, certain conditions must be met. These conditions, such as obtaining a valid building permit and providing insurance contracts, are listed on the investment opportunity page. However, the loan approval process also depends on factors such as the project type, stage, and financing. Fintown also evaluates the developer's financial stability to ensure loan repayment.

A loan is a form of financing provided by Fintown to a developer, based on a submitted application. If the conditions are met, funds are transferred to the developer, not exceeding the amount raised during the fundraising period.

The disbursement method depends on the investment product. For the Rental Product, funds are made available to the developer immediately after investment, with interest accruing on the loan even if all funds have not been received. For the Development Product, the loan may be disbursed gradually or in a lump sum, with a reserve fee to protect the investor's income.

Repayment terms vary depending on the investment product. For the Rental Product, interest is accrued daily and paid monthly, with the loan principal repaid at the end of the term. For the Development Product, it is expected that the interest and principal will be repaid in a lump sum on the expected repayment date, with options for early repayment.

The developer is required to comply with certain conditions to ensure Fintown can verify the project's technical and financial progress, as well as protect Fintown's position as a creditor. These obligations may include allowing access to the construction site, submitting financial statements, and obtaining Fintown's consent for any other financing agreements.

Fintown may choose to implement one or more of the following actions in response to a violation of the loan agreement by the developer:

• Demand a contractual penalty

• Declare all loan debts immediately due

• Withdraw from the loan agreement

Additionally, if the loan has not yet been disbursed to the developer, Fintown may choose to refuse, suspend or reduce the disbursement of the loan in case of a breach of obligations. However, in such cases, the investors' income is protected until the next due date by means of a contractual penalty for non-fulfillment of the disbursement conditions.

A mezzanine loan is a type of financing that a developer can get, usually after they have already obtained a loan from a bank or other financial institution for their real estate development project.

A mezzanine loan is subject to a loan agreement that the developer enters into with a bank or other financial institution. This subordination is resolved contractually by concluding a subordinated debt agreement (Intercreditor Agreement) between Fintown and the financial institution. In order for a financial institution to authorize a developer to enter into a loan agreement with Fintown, the loan agreement must have certain features such as a final maturity date set after the final maturity date of the loan agreement with the financial institution, and all proceeds from the loan agreement are payable either after full repayment of the debt to the financial institution or by offsetting against the disbursement of the loan from Fintown.

Fintown offers several options for providing a developer loan: by establishing a direct loan to the project company, linking credit to a company within the developer's group, or linking credit to the developer's parent company. This means that the developer can be the project company, another company within the developer's group, or the developer's parent company.

The loan is not secured, unless it is stated in the information on the page of the relevant investment opportunity. The loan is always earmarked and the funds are used for the implementation of a specific project.

Yes, the terms of the loan may change during its term, such as in the event of the developer's financial instability. These changes are made with the goal of maximizing revenue and protecting the interests of investors.

Fintown closely monitors the loan agreement and the development project to detect any potential issues with loan repayment. In the event of a default, Fintown will take action to enforce the loan agreement, such as imposing a contractual penalty, threatening repayment of the loan, etc.

If the loan is in arrears, Fintown will take immediate action to resolve the situation, such as checking the developer's financial situation, proposing debt recovery procedures, trying to reach an amicable agreement, and initiating legal proceedings if necessary.

Fintown may also explore options to convert the developer's claim into a more liquid asset, such as selling the claim to a third party, or concluding a court settlement or mediation agreement.

If the default is caused by a violation of legal obligations by the developer or their representatives, they may be held personally liable. If the default is caused by criminal conduct, Fintown may contact law enforcement authorities with this information.

Your personal data is securely stored in our secure data centers. The transmission of data that contains your personal data is always encrypted using the SSL protocol for added security.

In addition to Fintown, Česká spořitelna ("ČS") and UnicreditBank ("UNI") also have access to your personal data. These financial institutions maintain the bank account where the funds of investors, including yourself, are registered and internally distribute these funds to your accounts. Fintown may also share a limited amount of your personal information with ČS, such as your name, surname, address of permanent residence, and date of birth. Access to your personal data is also granted to Fintown employees in accordance with their job responsibilities. In certain cases, other subjects may also have access to your personal data in accordance with relevant legal regulations, court decisions, or decisions of state administration, local government, or similar institutions.

By agreeing to the rules for the processing of personal data, you also give Fintown consent to use your email address for the purpose of promoting the services and products of Fintown s.r.o. or companies belonging to the Fintown holding structure.

The money you sent to us is registered on a bank account maintained by Česká spořitelna, a.s.

Your account is secured through the use of a username and password that you created during the registration process on app.fintown.eu. Additionally, actions related to signing contracts and investing can only be carried out from your personal account, providing an added layer of security.

Average daily rate for renting a unit.

ADR = rent received / number of units rented

Profit after tax.

Profit before tax.

Free cash flow available to property owners after all costs, excluding Fintown loan costs.

FCEE=operating cash flow-capital costs+(issued type-debt principal repayments)

A proxy for the ability to meet interest costs. A value of less than 1 indicates a possible problem with the payment of interest costs during the credit relationship

ICR = EBIT / interest costs

where EBIT is the free cash flow available for interest payments.

There are several ways of calculating interest coverage ratios, and the appropriate approach is always chosen in relation to the case at hand.

The formula for calculating the internal rate of return (IRR) is:

Where "r" is the internal rate of return, and NPV is the net present value.

The ratio of total debt to the value of the property is used, among other things, in assessing the riskiness of the loan and determining the maximum amount of credit granted.

LTV = total debt / property value

Net floor area for rent.

Net operating profit of income property

NOI=Revenue from the operation of income property-operating expenses

A letter of intent (LOI) is a document declaring a preliminary commitment by one party to execute a transaction with a given counterparty. The LOI outlines the main terms of the future agreement.

Revenue per rented unit

RevPAR=Average occupancy * ADR

Return on invested capital. It is given as a multiple of the investment cost of the project without taking into account the time component.

ROIC = total projected revenues of the project / total investments costs

Weighted average of the time to the expiry of the lease contracts. The weights are the annual rental amounts under the current lease agreements. Expressed in years.

Return on invested equity. This is reported as a percentage of the pre-tax profit on the equity provided to the project by the developer, excluding the time component.

CPP - Net floor area

HPP - Gross floor area

Debt yield = net operating income (NOI) / total debt

Debt yield is a debt metric that tracks the capacity of a financed asset to generate operating cash flows with respect to its total debt. For example, Fintown monitors this metric to ensure that there is a conservative gap between the Debt Yield and the market capitalization rate for the asset.

Debt-Service Coverage Ratio

The DSCR, or Debt Service Coverage Ratio, measures the ratio of net operating profit (NOI) to the lender's debt service (principal and interest payments for the period).

The ratio of total debt to total project costs is used, among other things, in assessing the riskiness of a loan or determining the maximum amount of credit provided.

LTC = total debt / total cost of the project

The return that you receive from Fintown is gross income, which means that Fintown does not deduct any tax from the amount. All returns earned from loans are treated by tax authorities as investment income and is thus subject to income tax. Fintown does not provide tax-related advice and recommends that you turn to a local tax advisor for additional information.

When you invest in Development projects, they become - Frozen funds

When Development project, that you invested in, starts its accruals, they become - Invested

Why it is needed?

If Development project will not complete Min. Goal the funds will be transfered back to investors accounts.

A studio is a type of non-residential premises that cannot be approved as a residential unit due to a lack of compliance with certain sanitary standards. Typically, studios do not meet noise limits and do not have adequate lighting.

We calculate the total average annual cost of credit using the Internal Rate of Return (IRR) formula, which takes into account all cash flows associated with a given loan, such as fees, interest payments, etc.

The price of the work refers to the amount that the general contractor will receive from the developer for the completion of a construction project. This price is agreed upon in the construction contract.

The net income from a credit agreement is the payments received by investors based on their participation, after deducting any applicable fees. It is expressed as a percentage per annum (p.a.) of the amount of the investment.

The final due date is the last possible day that a credit can be fully repaid without incurring penalties for late repayment or default interest. This date is stated in the loan agreement and should not precede the final maturity date set by the senior lender, if the loan is granted to the same developer.

The settlement day is the second business day after the day on which Fintown receives a payment for a specific credit, and records at least one participation for it.

A developer is a legal entity with which Fintown plans to enter into, or has already entered into, a loan agreement.

Financial costs refer to the expenses associated with financing a project, typically through debt financing. These costs include estimated interest payments and fees associated with external financing.

The identification payment is the first transfer of funds from an investor's bank account, provided during registration, to Fintown's designated bank account for investment.

The act of committing funds to an opportunity in exchange for a financial return or stake in the venture. This can include both direct investments in the form of equity or debt, as well as indirect investments through financial products or vehicles.

The targeted amount or range of capital to be raised through the investment campaign, which serves as the principal of the loan or funding for the project.

The expenses incurred in the execution of a project, including but not limited to surveys, land acquisition, project documentation, engineering, construction, project management, legal fees, and marketing expenses. Financial costs may also be considered investment costs if they are paid during the project's implementation.

The opportunity to participate in a credit agreement or funding campaign through our platform, providing access to detailed information and loan agreement terms.

A registered user of our platform who has completed the necessary steps to become an investor and has the ability to participate in investment opportunities.

The act of committing funds to an investment opportunity in exchange for a financial return or stake in the venture. This process may involve the acquisition of conditional participation, which may convert to direct participation upon successful fundraising.

Interest is only charged on the investment. Interest calculation:

Interest = principal * (r/m)

Where
r is the annual interest rate
m is the interest rate frequency

The individual components of a development project, typically comprising of residential units, commercial spaces, or retail areas.

The analysis of the financial liabilities and obligations of the project company, including long-term debt, with a maturity of more than 180 days, if the project is developed directly by the project company. In cases where Fintown finances the project through other means, the capital structure refers to the analysis of the claims of the entities financing the project, either directly or indirectly, and the costs associated with the project.

The formal approval of the completed building by the relevant building authority, based on the approval of the building permit.

A method used to estimate the value of an asset based on the net annual cash flow generated by the asset and a discount rate that takes into account the risk associated with the cash flow.

Price estimate = net annual cash flow / (discount rate - growth in annual cash flow)

We assume zero growth in net annual cash flows unless we state otherwise.

The earliest possible date on which a loan must be repaid, which may occur if the developer accelerates construction or achieves an unexpected sale of project units.

The situation in which the amount of funds raised during the fundraising period falls short of the Investment Goal.

A legally binding document that confirms a debtor's commitment to repay their debt to the creditor within a specified period of time. This allows the creditor to seek enforcement of the debt through a bailiff without the need for court proceedings, in the event that the debtor fails to repay the debt.

The period during which the developer can apply for loan disbursement, typically prior to the start of a successful fundraising campaign.

The time frame in which investors can acquire conditional participation in an investment opportunity, which converts to direct participation upon successful fundraising.

A strategy in which detailed investment analysis is made available online prior to the start of fundraising, allowing investors to familiarize themselves with the opportunity before committing to invest.

The key factors that determine the potential return on an investment, such as the net income and maturity of the investment.

The website of Fintown s.r.o. (www.fintown.eu) where investment opportunities are made available to registered investors.

Specific requirements that must be met before loan disbursement can occur, which vary depending on the project and its stage of development. These may include the delivery of a valid building permit, insurance contracts, and expert reports, and the absence of any breaches or violations under the loan agreement. Fintown may also assess the economic situation of the developer and the project before approving a drawdown request to ensure the loan is not subject to undue risk.

The expected date on which a loan will be fully repaid, as determined by a financial and technical analysis of the project, including the anticipated construction schedule and expected sales or occupancy rate.

A separate legal entity established for the purpose of owning and managing a specific real estate project, and which may be owned by the developer or an immediate developer. Fintown may provide funds to the project company either directly or indirectly, for the purpose of construction or acquisition of real estate or any other purpose of financing or refinancing a real estate project. Financial institutions and Fintown prefer or require the project to be carried out by the project company in order to separate the risk of the project or the operation of the property from the developer's other activities and have clearer control over the financial flows associated with the project.

The expenses incurred in the day-to-day operation of an income-generating property, including property management costs.

The average annual occupancy rate of all units in an income-generating property, calculated as the total number of occupied units divided by the total number of available units within a year.

The initial transfer of funds from an investor's bank account, provided during registration, to Fintown's designated investment account (IBAN: CZ42 0800 0000 0000 1023 7722), which will then be deposited into the investor's account.

A loan provided by a bank or financial institution that has priority over other loans in the event of default or bankruptcy.

An occurrence or incident that results in damage or loss, which may give rise to a right to insurance benefits.

According to Czech law (Act No. 253/2008 Coll. on Certain Measures against the Legalization of the Proceeds of Crime and the Financing of Terrorism), a "beneficial owner" is a natural person who has the ability to exercise significant influence over a legal entity, trust fund, or other legal arrangement, without having a legal personality. This person is considered the real owner of the entity. The beneficial owner is determined as follows:

• In the case of a commercial corporation, a natural person who holds more than 25% of the voting rights, controls a person who holds more than 25% of the voting rights, or is a member of the statutory body.

• In the case of an association, public benefit corporation, community of unit owners, church, religious society, or other legal person, a natural person who holds more than 25% of the voting rights, receives at least 25% of the funds distributed, or is a member of the statutory body.

• In the case of a foundation, institute, endowment fund, trust fund, or other legal arrangement without legal personality, a natural person or the beneficial owner of a legal person who is in a position such as the founder, trustee, obligee, person in whose interest the foundation, institute, endowment fund, trust fund, or other arrangement without legal personality has been established or is operating, unless a nominee is designated, and person authorized to supervise the administration of the foundation, institute, endowment fund, trust fund, or other legal arrangement without legal personality.

Interest is also accrued on the interest accrued so far:

Where

r is the interest rate

m  is the interest rate frequency (by default we choose annual, where m =1 unless otherwise stated)

A legal agreement between a developer and a general contractor, in which the general contractor agrees to construct a building according to the design documentation, deliver it to the developer without defects or damages, and do so at a specified price and within a specified time frame.

A legally binding agreement between Fintown (as the lender) and the developer (as the borrower) that outlines the terms and conditions for obtaining Participation from investors.

A contract for a future purchase agreement that the developer enters into with a prospective purchaser of a project unit, where a deposit or full payment is made in advance for the purchase of the unit, and the terms and conditions for the final purchase contract are established.

The date on which a loan instalment is due and received by Fintown in its bank account.

The payment account of an investor from which they invest through the platform.

Default Interest: Additional interest that the developer must pay in the event of default on any debt from the loan agreement.

 The stated rate of interest on the loan agreement.

The situation in which the amount of funds raised during the fundraising period meets or exceeds the Investment Goal.

An agreement or funds obtained from investors during a fundraising period, or funds borrowed by the developer.

A contract between Fintown and a financial institution in which Fintown acknowledges the priority of the financial institutions loan repayment and waives its rights to intervene in any insolvency proceedings.

The personal account management section of the website that can be accessed after logging in.

A unique identification number provided during the registration process and used for communication and fund transfers with Fintown.

Financial contributions made by the developer to the project company, including equity, loans, or credit from related entities.

The time during which a rental space is unoccupied and a new tenant is being sought.

Property that generates regular rental income.

Payments made to investors from a credit agreement, with "yield" referring specifically to payments that are not repayment of the principal.

A ratio that demonstrates the performance of an income property by comparing the Net Operating Income (NOI) to the value of the real estate.

An event that is beyond human control and caused by natural causes, resulting in the inability to operate the property or endangering the safety of employees, residents, owners or tenants of the project.

Purpose for which the proceeds of the loan will be used by borrower.

Percentage of earnings from the amount of your investment in this project.

Interest earned on the investment is paid out to the investor at specified time intervals.

Minimum amount of investment for current project.

Expected days to complete the fundraising for current project.

Collateral value is the fair market value of an asset used to secure a loan.

Location of the investment property.

Company responsible for timely execution of the project.

Current phase of project development.

Type of security or collateral offered by the borrower.