Investing before the permit: would you, if refunds were guaranteed?

Question

Hey BP long time no see , I'm 18 and I've been working on an idea for two years. I'd love feedback from people who actually invest in real estate, because you'll see the holes faster than anyone.

The idea is called Votely. Instead of investing in a whole company or a whole fund, you back one specific project, split into milestones that get announced up front.

Example: a developer is building an apartment building. They post the milestones before anyone invests:

1. Land use permit

2. Building permit approved (this is the "decisive" one)

3. Structure topped out

4. Final inspection filed

Round 1: early backers put money in before the building permit. The money sits in escrow and the developer can't touch it. If the permit never comes through (they get 3 deadline extensions max), everyone gets 100% back.

Round 2: once the permit is verified, bigger investors come in at a higher price. Part of what they pay goes to the round 1 backers, weighted by how early they came in. When the building is done, holders get equity and a share of the project's returns.

Other rules:

- A milestone only counts if it's verifiable, like a permit or an inspection. Not "we broke ground, trust us."

- Every project a developer has done on the platform, successes AND failures, is public on their profile.

- If a developer builds in phases (Building A, Building B), each one is its own project, so a good track record on A helps B.

I built a working demo with fake money so you can click through it (there's a sample developer doing exactly the two-building example above): [link]

It's a points simulation only. No real money, not raising anything.

My questions for you:

1. Would you actually put money in before the building permit if escrow + full refund were guaranteed? Why or why not?

2. Are permits and inspections good enough as milestones, or can they be gamed?

3. How is this different (or not) from the real estate crowdfunding platforms you've used?

Be honest, I'd rather hear what's broken now than later. Thanks!

Divin Kanyama · Answer

@Celine Rechyy This is a thoughtful concept, especially the focus on verifiable milestones, escrow, and a transparent developer track record. I might consider investing before the permit if the escrow were independently controlled, refunds legally guaranteed, and the sponsor had strong site control, financing, and experience. Still, a permit does not remove construction, cost-overrun, financing, or market risk.

Permits and inspections are useful milestones, but they can’t stand alone. I’d also want verification of financing, sponsor equity, insurance, liens, and construction progress.

The staged entry and payout to early backers make this different from typical crowdfunding, but they also raise questions about valuation, dilution, investor priority, and securities compliance. The public track record is a strong feature. Before going further, I’d pressure-test the model with a securities attorney, escrow provider, developer, and experienced investors.

Celine Rechyy · Answer

Thank you so muchhhhhhh!!!!!

this is exactly the kind of feedback I was hoping for. A few things you said are going straight into the rules:

• Escrow held by an independent, licensed escrow agent instead of the platform

• Verifying financing, insurance, liens and construction progress alongside permits, not just the permit itself

• Spelling out who gets paid back first if a project fails

One question if you don't mind: how much of their own money would a sponsor need to put in before you'd feel they have real skin in the game? Is there a percentage you usually look for?

And you're right about the securities side. It's only a points simulation for now, and talking to a securities attorney is on my list before anything involves real money.

Investing before the permit: would you, if refunds were guaranteed?

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