This website www.yeldo.com ("Yeldo website") contains information on real estate investment proposals (“Investments”), including future forecasts. These are indications based on assumptions and estimates that are now considered appropriate but which, due to various factors of uncertainty, may differ, even significantly, from the actual results. No guarantee is provided on the merits of the correctness of the expressed opinions, judgments, projections, forecasts or statements or on the merits of the fact that the financial goals of the Investments will be achieved.
Potential investors are invited to perform their own due diligence and to evaluate the legal and tax consequences arising from an Investment and to consult professional advisors where applicable. This disclosure provides some non-exhaustive information on the risks of real estate investments.
The Investments are restricted to specific real estate properties or portfolios and hence foreclose diversification of overall risk across multiple investments.
The Investments, similarly to any business activity, are subject to the entrepreneurial risk of obtaining results that are poorer than those expected in the business plan and in the financial forecast. These estimates and projections have been carried out based on generally accepted prudential criteria, but there is no certainty as to the actual realization of the expected results. Furthermore, the current emergency situation due to Covid-19 represents an additional factor of uncertainty.
The time horizon envisaged for holding the Investments ("Holding Period") represents the time period required to carry out the property development project and the consequent liquidation of the Investment. This time horizon, calculated on a prudential basis, cannot, however, be defined with certainty. Furthermore, the current emergency situation due to Covid-19 represents an additional factor of uncertainty.
The financial resources available in the Investments could become insufficient, preventing the company from completing its real estate development project.
The real estate sector may be influenced by contingent and prospective factors relating to the type of property and its geographical location, including economic trends and the rate of occupation. Other factors that may affect the real estate market include fluctuations in interest rates on financial markets and mortgage rates, expected population growth and public investment in infrastructure. It is also necessary to consider further risks with reference to real estate, such as (i) the possible occurrence of natural and/or accidental events that have consequences on the structure and/or consistency of the real estate, (ii) the possibility of having to adopt special measures not envisaged in the business plan to ensure its state of conservation and/or safety, the costs of which may be reflected in profitability and (iii) the change in its value and/or profitability (due, for example, to natural events, changes in land-use policies and urban plans as well as events affecting contracts). In addition, the real estate market may be affected by regulatory changes of a civil, administrative or fiscal nature, as well as by the health emergency situation linked to the Covid-19 virus. Furthermore, there is no guarantee of future growth in the local real estate market. The occurrence of any of the risks described above could have negative consequences both on the profitability generated by the properties being developed under the Investment and on their value, and therefore on their price and, ultimately, on the profitability of the Investment as such.
The profitability of some of the Investment is linked to the correct fulfilment, by the purchasers of the real estate units of the purchase promises made by signing the preliminary purchase agreements (right of purchase) or the contractual obligations deriving from the relative deeds. Possible breach of contract by such purchasers could affect the profitability of the Investment.
The real estate development times and costs could be higher than those foreseen in the business plan. This could depend on possible delays in the granting or suspension of the validity of the administrative authorizations that must be or have already been issued by the competent administrative bodies for the purposes of the realization of the project itself or the effects of the measures aimed at the containment of health emergencies, such as that of the Covid-19 in course. In any case, no guarantee is provided for the actual validity, timing of release and/or any suspensions of administrative measures that may be determined by requests from any administrative body. It should also be borne in mind that the granting of the financial resources required to implement the Investment - which may consist, among other things, partly of bank loans, partly of investments, and partly of advances on the sale of the property units - could be delayed and, the aforementioned resources, once granted, could come to an end or run out before the timeframe envisaged for completion of the Investment; these circumstances could make it impossible to complete the project or delay its completion, even significantly. Other factors that could affect the increase in the real estate development costs are the increase in the cost of labor or raw materials, as well as the possible extension, beyond the estimated time horizon, of the real estate development timeframe, as described above.
The Investment may result in a total and irreversible loss of capital invested. The investor must therefore carefully assess the Investment also in relation to the size of its assets.
The Investment is not guaranteed by repurchase agreements or guarantee funds and is not admitted to trading on regulated markets or other multilateral trading systems. This makes the Investment a highly illiquid financial instrument, subject to high divestment difficulties (difficult to transform into cash in the short term). An investor interested in selling its participation in the Investment could, therefore, encounter difficulties in finding a counterparty interested in buying it.
If you like to learn more about alternative investments, you can check the following resource from Harvard Business School.