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  • Peer to Peer Lending

    Our first crowd funding raise

    Just landed in Madrid. Saturday I was in the USA. It has been a while since I traveled daily. Interesting stuff. I rather enjoy having fewer travel days.  Maybe it is an age thing now.

    Stephen,

    To address your question directly.

    Sorry if I confused you. Connecting dots not in evidence.

    Someone is doing research for their degree and posted to Facebook. Vanessa directed them to this sub-forum (the P2P). I was tagged in the FB thread as someone who knows about crowd funding,.

    I clicked through from Vanessa's link.  I found a number of threads I had not seen when they first were posted. Some are pretty old. This one was over a year old before I saw it.

    Reading through, I would say that there is a lack of understanding about raising equity. Maybe to be expected given the discussion was taking place in a debt (P2P) sub-forum. People are not used to equity raises for real estate deals. That said, one or more people who contributed at the time said what was proposed is pretty standard for JV deals which are privately funded. With crowd funding everyone can watch or at least know there is something on offer.  I am curious what people think given it has been a year now. EE has raised funding 5 times using crowd funding. All equity. No debt raises using the crowd. Others have raised equity multiple times. Two of the projects (1 from Century Spaces and 1 from Grace Charles Property) are close to finishing. Glide path to a profitable landing in both cases. Until the dust settles, no one can accurately say how things will turn out. Still, hindsight is interesting when listening to what people were concerned about and what is taking place.

    One of the reasons I promote crowd funding is more people can be part of the conversation. They can take advantage of the opportunity if they feel it is suitable and appropriate for them (FCA terms). They can minimize their exposure if they want to dip a toe in and become a shareholder. Buy one share and watch fro being in the deal rather than in the dark.

    Since finding the thread I have directed the people in the crowd funding mastermind I host to take a look. As people who are looking to raise funding, hearing what people ask, why they ask it and where they are coming from is important to understand. 

    Anyone can ask a question or have a view. Not all questions or views are grounded and have relevance to the actual project. I want to encourage people to engage. And to learn how to do DD for crowd funded equity.

    Any question Stephen? Or anyone else?

    If folks are at the Property Investor Show this weekend, I will be there. Happy to chat in person.

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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.


    Thanks for your interest. Thanks also for drawing my attention to the fact that it has been nearly a year since our first crowdfunding raise. Where has that time gone? Since then we’ve had four additional raises, totalling £5.68m, from over 100 individual investors. At the outset of each project all investors are issued with a reporting schedule and are kept up to date either fortnightly or monthly, depending on the project, with a comprehensive progress report. This way all investors know when to expect communication. We have a dedicated Investor Relations Manager, Jane Scroggs, who liaises directly with all our investors on any concerns or queries they might have. 

    Our first raise was Dalston Lane. We did receive planning, thanks for asking. We even got more than we expected, a lovely surprise. It means we don’t have to waste time going back for additional planning. We have been delayed a couple of months with the planning and now refinancing. Currently we’re working to discharge the planning conditions and we expect to break ground within the next few weeks. So that answers Vanessa’s first question.

    To answer the second question the London market is a fragmented place and while prices have registered their first drop in a while overall, we’re still seeing strong demand in secondary zones. From conversations with my local contacts there is still demand for property in Hackney with its proximity to the City and Canary Wharf and improving transport links. I’m comfortable that we will shift them once we are at the stage to commence marketing. Time will tell obviously. Historically we have always sold Hackney properties to owner occupiers who are less impacted by market sentiment and driven by the desire to own their own home.

    The death of Rashan Charles and subsequent “riots” (protests against police brutality would be a better description) a couple of months ago were very unfortunate. It was also an incident that was isolated to a single area of no more than a few metres right outside the shop in which the devastating event occurred. I know first-hand because it’s no more than 200 yards from my own home and a close friend has children who go to school with the victim’s sibling. This terrible and isolated event has had no tangible impact on overall sentiment on the local housing market. It was just that, a terrible and isolated incident that could have happened anywhere. During the London riots a few years ago a former colleague had a knife in his face while dining in a Notting Hill restaurant. It can happen anywhere.  

    On a less sombre note we have near-completed the refurbishment of our second crowdfunding project, Harrington Gardens. The final touches are being done right now. I’m meeting the estate agents on site tomorrow to show them around and discuss marketing strategies. Supply is limited so I’m interested to hear their reaction and see how viewings play out. We’ll have an investor tour in the coming weeks and also invite others who are interested. It will be great to finalise this project and return the first funds back to investors.

    @LegalLandlord Stephen – Thanks for your interest in our financial soundness. John is just getting off a long haul flight so hasn’t had a chance to read or respond to this post. John and I work together closely on our Crowdfunding Workshops and roadshows along with Atuksha and Davin at Simple Crowdfunding (our next workshop is on Thursday). Obviously he can speak for himself but if he did have any concerns he would come directly to me. We were only just whatsapping this morning on a variety of property related topics.

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    East London based property developer, investor and speaker

    East-Eight.com

    Follow Me: Facebook Twitter Snapchat


    Thanks for the update Nicole.

    My reply a few back was more in response to the debate that took place a year ago and how it all seems like a tempest in a teapot now. People who are not used to the website and to crowd funding of equity raising issues. More shocking to me was the things some folks were jumping to without even reading the offer documents.

    So, I am interested in hearing from the people who were raising questions about the suitability of the deal now that the world has move on. Hindsight sort of discussion now that the deal is funded, many others have funded deals and some are even coming to their close with profits projected for the crowd.

    While I might have sounded skeptical about EE it was more about people concluding things about the raise or any crowd funded equity raise when they were largely making stuff up.

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    John Corey 


    I host the London Real Estate Meet on the 2nd Tuesday of every month since 2005. If you have never been before, email me for the 'new visitor' link.

    PropertyFortress.com/Events

    Also happy to chat on the phone. Pay It Forward; my way of giving back through sharing. Click on the link: PropertyFortress.com/Ask-John to book a time. I will call you at the time you selected. Nothing to buy. Just be prepared with your questions so we can use the 20 minutes wisely.

    Does anyone know what is happening with the sale of 36C Harrington Gardens & have the crowdfunding investors made a profit yet on their investment ?

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    The answer to my question is contained within this vlog from Nicole Bremner  - 5.05 minutes in.

    Harrington Gardens hasn't sold and they are looking to refinance the borrowing and then let it out.

    Presumably the crowdfunding investors will just have to sit it out unless the refinancing will repay their investment with the projected profit on top ? The vlog does warn of the risk to crowdfunding investors who are unable to get their money back until the project ends as there is a very limited secondary market for selling on this type of investment.

    https://www.facebook.com/NicoleSBremner/...552813005/

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