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Is there such a thing as a broker for peer-2-peer companies?
It seems that when I get a mortgage there are plenty of brokers to advise me of the best way to obtain finance but when I need Peer-2-Peer/bridging finance i'm left to my own devices. If someone can open my eyes should I be missing something here, I would be most grateful.
The crowdfunding world is pretty new for property. There are not a lot of mortgage brokers who would be able to advise you. For the most part, each platform provides its own advise to its borrowers. On the debt side (P2P or other labels can apply), there is a lot of differences in what a crowd lender is allowed to do. For example, some platforms decide what the lender can invest in. How platforms vet the deals and decide what to put up will therefore vary quiet a bit.
On the equity side, there are a smaller number of platforms for property. Some platforms will only fund deals that have branded as their deals (the platform's name is on the deal as if they found the deal). The ones which allow people like you and me to raise funds will explain how their platform works without being your financial advisor.
Until there is more volume, I do not expect to see many independent mortgage brokers advising on crowdfunding.
I have personally helped people structure their equity raises so it will make sense to the crowd. I do not spend time on P2P or loans as there is not a great knowledge gap. Most property investor have raised debt. Few have raised equity legally for their deals. I make the 'legal' distinction, as many of the more recommended JV ideas are not legal when you get into the details of a Finacial promotion. Crowdfunding is a great way to keep it legal yet not widely used so far.
There is a gap in the market for helping people run their campaigns. Many proeprty investors have limited knowledge of marketing, brand building and developing a tribe of investors who will come back multiple times. Those skills are not specific to debt or equity raises. If one was using a platform that is very large and where investors do not make the investment decisions, then building a tribe not really possible. You do not know who invested or funded the loan. If you use a platform where you are more directly connected, you can developer loyalty by doing what you say over time.
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Many thanks for your input John. I appreciate your comments.
Peer to Peer lending (P2P) is, if I have understood it correctly, individual people/companies offering loans to other individuals/companies rather than ‘normal’ financial institutions. I got this from https://www.moneyadviceservice.org.uk, so forgive me if I am wrong. But I think the reason you get little joy when looking for advice on it is because I suspect the people lending the money might not be FCA registered and therefore the lending is not necessarily regulated in any way.
This means the vast majority of mortgage brokers in the country rarely ever encounter it and even if they did they cannot advise on it. If they hardly ever (if ever) come across it then they wouldn’t know which direction to point you in. So I am sorry I am joining the ranks of the un-helpful but I hope it sheds a little light on why you are struggling to get advice on P2P finance.
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I've done several for development finance at £500k+ with lenders who are funded by P2P. it a sector as a broker I'm concerned about. I see a lot of deals in the market agreed by lenders that I don't deal with, which are very risky and my opinion should never have been agreed.
Regards Simon Searchlight Finance
Fulfil Your Property Ambitions
Searchlight Finance Ltd is authorised and regulated by the Financial Conduct Authority reference 743220.
HMO Finance I Complex BTL I Bridging Finance I Development Finance
Buy to Let I Portfolio Finance I Commercial Mortgages
I speak as a broker of 20+ years' experience and specialise in financing small to medium property investors and developers. A number of lenders we deal with are funded this way (peer-to-peer) and they are FCA authorised (so the comment you have received implying they aren't regulated/authorised is incorrect). There seems to be much confusion over this: the activity of offering investors a pooled investment is itself a regulated activity even if the loans that are subsequently made (BTL, property development etc) are not regulated.
P2P is merely the way a lender raises their funds to lend; bridging finance is the product created out of those funds. Some bridging lenders are funded this way, most aren't (they are funded via HNWIs, hedge funds or other methods). The point is, a good broker that specialises in bridging finance will have a wide range of lenders to choose from and will be able to get you the best deal for any given scenario. That may or may not be a P2P funded lender.
Do you have a proposition that requires funding?