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  • Peer to Peer Lending

    New crowd funding site: Property Partner

    Anyone heard of propertypartner.co? I just found them through a sponsored post on Facebook, "liked" by an old school mate.

    Their site looks quite slick and the team has some fairly strong looking credentials.
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    Are you an estate agent or property developer? Do you outsource your property marketing? Please take my survey now to let me know your views!

    hazeldineproperty.com
    Hazeldine Property on Facebook
    It's a simple idea. The letting agent charges a whopping 15% to manage. They allow lots of people to buy a small portion of the property and pay proportionate rent to each investor.

    Good on them for producing a loving site and a clever business model. But, personally I wouldn't do it because I want control on purchase price and yield. I'm sure your returns would be tiny.
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    I joined Property Partner just a few weeks ago after looking into their investment partners and management team.

    Agree that the website and level of detail for each property is impressive and gives me pretty much all I'd expect to see in something like this.

    I like the idea of a secondary market on which to sell your shares in a property too - have had a small punt to see what happens. Going more for capital growth than income so far as most of the properties so far (third one came on today) seem to be London-based.
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    Memfy - Because every memory matters
    www.memfy.com

    I was interested but put off by the 12% monthly management fee, Sad
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    This company has just raised 5 million pounds investment, anyone knows what is their business strategy exactly?

    on paper they make money only from management (15% gross) and only 2% cut of any money transferred over for investment. This is quite slim to justify a 50+ million company valuation.

    there must be something behind it I dont see, please enlighten me.
    Thanks!
    Pete
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    From what I can ascertain, they're making money from the 2% on sales and resale. The management fee isn't intended to make a profit though they may be building in a margin to to protect themselves against shortfall.

    The management fee plus rental income covers shortfalls, e.g. maintenance. Or at least that's their theory for now.

    The 2% sales fee applies to investors reselling their shares in properties too which is where things get really interesting. Don't know if this justifies their valuation but on have seen their properties getting funded faster and faster.
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    Memfy - Because every memory matters
    www.memfy.com
    Thanks Anand for your comments!

    Their website states that they only charge the 2% funding fee once, not every time you trade shares.

    Now, it seems to me their monthly cash flow is pretty much null. The 12% management fee and the 2% one off fee is very slim to justify a £50M company valuation. (they have sold about £1.6M property so far, that is £36k one off income, plus about a £1000 per month cash flow?

    They dont say whether they buy the properties bmv? might get a cut there?

    I m just trying to understand the business model, there are a few of these companies out there and common sense dictates its very risky and questionable if they survive on the long run. But then securing a £5.2M seriesA shows there must be something I dont see clearly, what makes these companies such a good investment.

    Thanks for anyone who could shed some light on this!

    Pete
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    (24-03-2015 10:12 AM)pete Wrote:  Thanks Anand for your comments!

    Their website states that they only charge the 2% funding fee once, not every time you trade shares.

    Its definitely 2% for initial sale and resale. Sellers don't get charged a commission, just buyers. I know this because when I first invested, I bought into their Croydon property, which was already sold out. So my entire stake in that property was bought on the resale market and I got charged the 2% fee.

    Their description on each property about how they bought it, how much for, if the PP includes any refurb costs, etc is quite detailed so easy to look up on sales history (though unlikely at the time of buying due to the records lag), comps, rental forecasts etc.

    For me its a good way of getting involved in good London deals which normally would be outside my buying criteria due to yields and initial PP. The 5yr fixed exit plan is great for giving an assured 'out' and locking in any capital appreciation though you can sell on the secondary market earlier if you price it right.
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    Memfy - Because every memory matters
    www.memfy.com

    Hi all, I like it if it can take off. (it will take off if they're careful about who the let buy or sell and to get valuations accurate).

    Its great for those who either don't have enough to buy a property outright or want to trial buy before they buy a whole one so to speak (no real time cost either). Not as risky as no bank lending but maybe not quite the returns either.

    I think it provides investors with a good exit strategy to sell their property too (or the majority of it), I'm not sure how quickly but if they can get a good price quickly (more than at auction you might find they get a lot of people to sell on their site).

    Once you have bough a share you can still sell that share on if you want so say a 200k property is fully sold (4k commission), those share holders might within 1yr have sold maybe 50% - so those new buyers of the shares pay the 2% fee on 100k's worth of traded shares (another 2k commission within 1yr).

    I wish the site every success as I can see how it can help many people if done right. Protecting the shareholders will be the key.

    regards Andrew.
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    regards Andrew Peers - property investor / sourcer - 07912674181

    a.peers@seamlessproperty.co.uk

    Property Redress Scheme Number 011436     NLA member 174404

    Property Partner, the ambitious tech start-up which allows people to crowdfund the purchase of individual properties by buying stakes for as little as £50, has laid off over a quarter of its staff.

    Announcing a restructuring of its business, the firm says that in the process, headcount is to be reduced by 13, taking staff numbers down to 31.

    A statement said: “The decision, coming after the completion of a £15.9m Series B funding round earlier this year, is a proactive move to improve efficiency and streamline the company’s cost base.”

    Full/source story

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