Repurchase agreements: a new asset class for real estate crowdfunding investors

In a context where investors are seeking investments that are both profitable and secure, sale with right of repurchase is regaining interest, particularly via real estate crowdfunding platforms. This long-standing mechanism, governed by the Civil Code, allows investors to invest in real assets at a discounted price while financing temporary refinancing situations for owners. Combining contractual returns and legal certainty, sale and repurchase agreements offer a balanced solution between performance and asset protection.

Sale with right of repurchase: a secure, discounted investment tool

Sale with right of repurchase, or sale with option to repurchase, is governed by Articles 1659 et seq. of the Civil Code.

This mechanism allows an owner to temporarily sell their property in order to obtain quick cash, while retaining the right to buy it back within a set period, generally up to five years, and often continuing to occupy it in exchange for an occupancy fee.

A clear and definitive transfer of ownership

Upon signing the notarized deed, the company dedicated to the transaction becomes the full owner of the property. This transfer is published in the land registry and can no longer be challenged: the seller retains only a personal, temporary right, which automatically disappears if they do not repurchase within the specified period. The investor therefore owns a real estate asset acquired at a discounted price, with no subsequent legal risk of dispute.

Advantages for investors

• Acquisition at a discounted price, generally between 60 and 70% of market value.
• Immediate income in the form of occupancy compensation paid by the seller (often around 10% annual return).
• Contractual security: the repurchase price, term, and compensation are fixed from the outset in the notarized deed.
• The key risk: exit in the event of non-redemption

If the seller does not exercise its right of repurchase, occupancy compensation ceases. From that point on, exit depends solely on the resale of the real estate asset by the holding structure.

Investor protection therefore relies on the initial discount, but the final performance will depend on market conditions, marketing timeframes, and disposal costs. Hence the importanceof rigorous propertyselection and a controlled resale plan.

Illustrative example

An investor commits €100,000 to a 24-month transaction with a 10% annual return via occupancy compensation.

If the seller repurchases: the investor receives €20,000 over two years and recovers their capital, i.e., €120,000.

If the seller does not buy back: the dedicated company retains the asset acquired at a discounted price, which is higher than the capital invested. Investors benefit from this asset security, but without additional cash flow. The final performance will then depend on the price and timing of the resale.

Why real estate crowdfunding platforms finance sale and repurchase agreements 

Real estate crowdfunding platforms, including Raizers, are increasingly interested in sale and repurchase agreements. This type of arrangement is based on an existing, valuable property and is governed by specific legal provisions. It therefore offers greater visibility in terms of guarantees and completion deadlines, while offering a potentially attractive level of return in relation to the risk taken.

Repurchase agreements are emerging as a complementary alternative to property development or real estate investment, offering another form of exposure to the real estate market that focuses more on asset valuation than on the creation of new projects.

For platforms, these operations offer several advantages:

• Identified collateral: the transaction involves a property that has already been built and is owned by a dedicated company, with no construction risk.
• Increased contractual visibility: sale price, repurchase option, occupancy compensation, and duration are defined in the notarial deed, facilitating monitoring and transparency.
• A generally short investment horizon, between 12 and 36 months, consistent with the expectations of retail investors in the sector.
• A tangible social dimension: sale with right of repurchase can enable an owner to temporarily refinance their property while retaining the option to buy it back, thus combining economic logic with practical utility.

The appeal of repurchase agreements for real estate crowdfunding investors

For investors, sale with right of repurchase is a high-yield real estate investment opportunity backed by a tangible and secure asset. This mechanism has several specific advantages:

• A significant acquisition discount (generally between 30% and 40%), which protects the capital in the event of non-repurchase by the seller.
• Regular income in the form of occupancy allowances, often close to 8-10% per year, paid to investors in the form of interest.
• Strong contractual security: the notarized deed defines the repurchase conditions and guarantees full ownership of the property to the investor throughout the duration of the transaction.
• A doubly favorable outcome: if the seller repurchases, the investor achieves the expected return; if they do not repurchase, they hold an asset acquired below its market value, offering the prospect of capital gains on resale.
• A strategy of asset diversification, since sale and repurchase agreements are based on a different mechanism than property development or real estate investment transactions, which are more exposed to economic cycles.

In short, crowdfunding applied to sale and repurchase agreements combines real estate security, contractual returns, and a short time horizon, thereby meeting both the reliability requirements of platforms and the expectations of investors seeking tangible, transparent, and high-performing transactions.