Crowd funding property - minimum investment £50

[Cornishfarmer]

I think in the future more people will rent houses, with pension short falls and the extortionate cost of elderly care houses will be sold when people get to 60 have fun and give some to family then the state will pay. Sad fact but it's already happening

[HighlandTiger]

PP just raised £490k in half an hour to buy a central London flat. I got my £50 in early on this one.

[morezone]

PP just raised £490k in half an hour to buy a central London flat. I got my £50 in early on this one.

I missed it. But I now know not to hang about just in case it's super popular. Like with Arshi's stuff, you got to be quick quick quick!

[SolidSilverBogbrush]

I missed it too. I was having lunch!

[Investor1989]

Does anyone know when the transaction fee has to be paid out?

[HighlandTiger]

Does anyone know when the transaction fee has to be paid out?

 

it's calculated automatically when you put in the amount you want to invest, and comes off that amount straight away . 

 

It's 2% for new properties, but about 2.5% when you buy someone elses shares in a property. 

 

I currently own two door bells, one light switch, and a window sill, spread over four properties. Still waiting for confirmation of my letter box and drain pipe, on two other properties...  

[HighlandTiger]

Interview with PP founder

 

http://www.crowdfundinsider.com/2015/06/69267-interview-with-property-partner-ceo-founder-daniel-gandesha-highlights-team-synergy-real-estate-internet-finance/

[Melon]

I really like the look of this, however a few concerns;

 

• I notice thehousecrowd isn't FCA approved yet (they've got an interim approval to trade). Interim approval is pretty much the same as they haven't got around to doing a full application and proving compliance yet - slight alarm bells? Of course it doesn't mean they aren't legit, but it doesn't reinforce that they are either. I'm not sure if propertypartner is also operating only under an interim approval (it's not explicit), but I imagine they are as well.

 

• The fees sound quite high on propertypartner in particular. 15% on all income and 2% straight off the top on your investment seems like a lot. OK if you're going to drop £50 each on 10 properties I can see why the fees need to be applied, but if you want to put in a hefty amount it seems like high fees. Anyone more experienced with property investment able to let us know what's normal in management fees if you went out and bought a property yourself then used an agent to manage it? I just wonder if this model is going to get more popular going forward, and therefore if people will start undercutting these prices if they are excessive - but for all i know 15% might be the norm. £150 a month on a £1k rental - seem legit?

 

• I'm not expressly clear on how you get your money back. It sounds like on thehousecrowd you're stuck with the property until after the minimum period (ordinarily 3-5 years), but even then you can't sell without a majority vote to dispose of the property. That's fine, but it appears if you do sell your share (rather than the property) that you sell at the rate you bought it at, thereby giving up any capital gains? That seems a bit unfair!

 

 

 

 

[KDave]

 

 

 

• I'm not expressly clear on how you get your money back. It sounds like on thehousecrowd you're stuck with the property until after the minimum period (ordinarily 3-5 years), but even then you can't sell without a majority vote to dispose of the property. That's fine, but it appears if you do sell your share (rather than the property) that you sell at the rate you bought it at, thereby giving up any capital gains? That seems a bit unfair!

 

Thats the only trouble - the investment is incredibly illiquid.

 

I was once told to buy dividend paying stock, write them into my will and forget about ever selling them. This could be an investment that requires a similar mentality. You are buying the returns not the capital gains.

 

I have yet to buy any dividend stock for my will though 

 

Also keep in mind what will happen if everyone wants to sell at once in 5 years time for whatever reason. Illiquid but in theory a good return if the fundamentals that exist today regarding the housing market can continue to be supported.

[motorbikez]

I was an active investor for over 25 years & have no opinion one way or the other re crowd funding,nor have I the slightest interest in it.

There are already dozens of UK property investment trusts out there with a track record some going back 50 years and some paying tasty 5% plus dividends quarterly.Most investment trust companies or REITS will allow you to invest as little as £50-£100 per month & most UK ITs or REITS can be sheltered in your ISA , also if needs must they be liquidated immediately

 

I tried to copy & paste performance tables from my dealing account (not that I do much nowadays read divorce) but it wouldn't let me so I've put up a couple of links for anyone interested.

 

I will STRESS once again i have no interest in any of these companies I'm merely pointing out alternatives with a proven track record & low charges

 

 

http://www.money.co.uk/investment-trusts.htm

 

http://www.fandc.com/uk/private-investors/investment-trusts/property/fandc-uk-real-estate-investments-ltd/

 

I'm not advising anyone of the suitability of the above & as usual DYOR

[Melon]

Thats the only trouble - the investment is incredibly illiquid.

 

I was once told to buy dividend paying stock, write them into my will and forget about ever selling them. This could be an investment that requires a similar mentality. You are buying the returns not the capital gains.

 

I have yet to buy any dividend stock for my will though 

 

Also keep in mind what will happen if everyone wants to sell at once in 5 years time for whatever reason. Illiquid but in theory a good return if the fundamentals that exist today regarding the housing market can continue to be supported.

 

Mm perhaps, but at 3% yield (which seems the norm) you'll be waiting an awful long time just to get your money back, let alone profit (unless of course prices boom, but then even more reason to be able to sell!).

 

In fact someone better at finance than me might be able to calculate the value of a 3% annuity with a discount factory to allow for present value of future cash flows (fancy). I wonder if you can ever make your money back without selling the principle? Again assuming no large rise in value equalling a large rise in rent/yield.

 

Propertypartner does seem to offer easier methods to sell by the looks of it mind, I can see tons of shares for sale on there. Of course, raises the question of demand?

 

I'm overthinking all this aren't I 

[KDave]

Mm perhaps, but at 3% yield (which seems the norm) you'll be waiting an awful long time just to get your money back, let alone profit (unless of course prices boom, but then even more reason to be able to sell!).

 

In fact someone better at finance than me might be able to calculate the value of a 3% annuity with a discount factory to allow for present value of future cash flows (fancy). I wonder if you can ever make your money back without selling the principle? Again assuming no large rise in value equalling a large rise in rent/yield.

 

Propertypartner does seem to offer easier methods to sell by the looks of it mind, I can see tons of shares for sale on there. Of course, raises the question of demand?

 

I'm overthinking all this aren't I 

 

You are not over thinking it at all, I think you have identified the problem on your own and are looking for confirmation. From my own investigation into it I think it will be a very difficult investment to get your money out of - just my opinion. If I was trying to look for a way to diversify into property via a small stake, there are alternative and more liquid ways to do it as Motorbikez has already pointed out. Again this is just opinion.

 

Have to make your own mind up on this stuff and not be swung by the crowd, so to speak!  

[HighlandTiger]

 

I'm overthinking all this aren't I 

 

LOL, don't forget you are on a silver forum, where most of us a currently holding a loss on our silver stacks if we go by current spot price.....What do we know about investments  

[HighlandTiger]

For anyone interested PP have a new property available tomorrow from 11am.

 

Been in email contact with them about their secondary selling of shares, to incorporate transparency of real time and historical secondary share purchasing. In other words, there is no point seeing lots of shares for sale if no-one is buying them or being seen to be buying them. Obviously as PP get a fee for every secondary share sold, it is in their interest to make this market as liquid as possible.

 

Anyway it appears they are creating something along those lines as we speak. and they are hoping to roll something out in the near future.

 

 

If they get this re-selling of shares in the properties right, I can see an opportunity to make some good gains over short periods. It's my gut feeling that the reason the guy from Betfair was so enthusiastic about PP, was more about the profits obtained through the secondary share reselling market, than the actual initial purchasing of property.

[Melon]

.....

 

Sounds interesting. What's the issue with selling shares right now out of interest? Is it fees or the price is set too high? I can see loads "for sale" on the front page, which is strange given they seem to have no issue selling all the shares for the initial purchase.

[HighlandTiger]

They have indicated in past media interviews that the re-selling of shares by people after the initial purchase has been quite healthy. However there is no way to verify this currently on their website. Although I have myself bought shares on this secondary market, so I know there has been some activity.

 

With other trading platforms you can see just how much items/shares have been bought for and how many. This would indicate the liquidity of the market.

 

If say only about £100 of shares a day are bought and sold on each property, then you can say that it's going to be a bit difficult to liquidate your assets should you need to. But if it's £10,000 of shares being bought and sold daily in a single property then it's a much better proposition to take quick profits as house prices rise.

 

The value of the property is adjusted quarterly to take into consideration of the local house price index, and this can go up or down. People then can decide to sell at a certain price to accommodate the price change and make a small percentage profit

[Melon]

They have indicated in past media interviews that the re-selling of shares by people after the initial purchase has been quite healthy. However there is no way to verify this currently on their website. Although I have myself bought shares on this secondary market, so I know there has been some activity.

 

With other trading platforms you can see just how much items/shares have been bought for and how many. This would indicate the liquidity of the market.

 

If say only about £100 of shares a day are bought and sold on each property, then you can say that it's going to be a bit difficult to liquidate your assets should you need to. But if it's £10,000 of shares being bought and sold daily in a single property then it's a much better proposition to take quick profits as house prices rise.

 

The value of the property is adjusted quarterly to take into consideration of the local house price index, and this can go up or down. People then can decide to sell at a certain price to accommodate the price change and make a small percentage profit

 

Cheers for the info - it's a really cool way to invest.

 

Does look a little worrying mind when you jump on there and see the amount available for sale on the resale market. Like on the first property for instance (Kings Highway, Plumstead) there's £30k worth of shares for sale (11% of property) at the lowest possible price. Like you say hard to know for sure without knowing how many sales happen per day, but that to me doesn't imply liquidity. 

[HighlandTiger]

 

Cheers for the info - it's a really cool way to invest.

 

Does look a little worrying mind when you jump on there and see the amount available for sale on the resale market. Like on the first property for instance (Kings Highway, Plumstead) there's £30k worth of shares for sale (11% of property) at the lowest possible price. Like you say hard to know for sure without knowing how many sales happen per day, but that to me doesn't imply liquidity. 

 

The Kings Highway property was bought originally at 26.81p a share, If sold at 28p, (minus original costs and the one off fee), that's about a 2.4% profit on your initial investment. Not a bad little earner for a few weeks.

 

My figures in this property

 

Bought 182 shares at 26.81p = £48.79

One off initial Transaction Fee = £0.97

Total = £49.76

 

If sold at 28p

182 x £0.28 = £50.96

 

£50.96/£49.76 = 1.024 = 2.4% profit

 

This is just on my £50, now imagine the £30k . 2% of £30k is £600. 

 

£600 profit on something bought less than a fortnight ago is not to be sniffed at. It's worth noting that not all properties have increased in value this quickly. Others have dropped in value, (which makes me have faith in that the are not manipulating the figures and are using the local house price indexes correctly)

 

[HighlandTiger]

There are two types of investors in these ventures. Those holding long term and those trying to make a quick few quid. Hopefully this will ensure the liquidity in the secondary market shares continues to be a healthy one

[Melon]

 

 

 

The Kings Highway property was bought originally at 26.81p a share, If sold at 28p, (minus original costs and the one off fee), that's about a 2.4% profit on your initial investment. Not a bad little earner for a few weeks.

 

My figures in this property

 

Bought 182 shares at 26.81p = £48.79

One off initial Transaction Fee = £0.97

Total = £49.76

 

If sold at 28p

182 x £0.28 = £50.96

 

£50.96/£49.76 = 1.024 = 2.4% profit

 

This is just on my £50, now imagine the £30k . 2% of £30k is £600. 

 

£600 profit on something bought less than a fortnight ago is not to be sniffed at. It's worth noting that not all properties have increased in value this quickly. Others have dropped in value, (which makes me have faith in that the are not manipulating the figures and are using the local house price indexes correctly)

 

 

Very true, but the big question mark is the "if" in "if sold". I can only speculate, but to continue with our Plubstead example, there is still the £29,759 worth of shares at 28p today that there was yesterday - nobody has bought any! I'm assuming people can't sell for less than the market value (e.g. 27p in this case), but that is an assumption just based on what I can see throughout the site. So while theoretically you can make an easy profit on these if shares sold, are shares actually selling or if you stuck your £50 in at 28p a share would you just be sitting there for months waiting for the other £29k to be bought up first? I think I'm going to buy £50 worth of something tonight just to give it a go and see what happens lol.

[HighlandTiger]

You can sell for less than market value. I know cos I bought some last night

Heathland way Hounslow

[HighlandTiger]

I was trying to get my head around the new rules re. the abolishing of the 10% dividend tax, that came in the budget, ( a loophole used by people, usually one man band or small businesses to pay less income tax by calling their income "dividends" instead of "wages"), with regards to the dividends paid out by the SPV's created for each property by Property Partners. So I emailed the nice people at PP, and got this reply, which may be of interest to anyone investing in this sort of thing.

 

 

Thank you for your email. I have summarised the changes below: 

• All UK tax payers investing in Property Partner are either better off or just as well off as a result of the summer 2015 budget.
• Corporation tax will be reduced from 20% currently to 19% in April 2017 and 18% in April 2020.  As a result of this SPV's which are used to purchase properties for Property Partner investments will be subject to lower corporation tax and this will lead to higher dividends for our investors (for respective fiscal years)
• From April 2016 the 10% dividend tax will also be abolished for UK tax payers.  In place of this a £5,000 per annum dividend allowance will be introduced.  This means that for those investing less than £150k (approx) in total across multiple equity/share investments, their dividends (assuming approx 3% yields) will not exceed the annual dividend allowance.

[SolidSilverBogbrush]

People are selling. I've been keeping a close eye on the process and yesterday there were 3000 shares at 27th available for

https://www.propertypartner.co/properties/UKSE182NL001

Over the course of a few hours this number dropped to zero. Of course it could be the seller changed their mind and withdrew them from sale but that seems unlikely. Never seen any more than 1pm below value. Did see some 10 below but these dissappeared less than 10 minutes later.

[HighlandTiger]

As the above property was purchased at 26.81p a share, anyone who sells at 27p, will actually be making a loss after taking in the initial purchase fees. The property has yet to pay out its first dividend either.

 

One has to assume the person selling, (if they did sell and didn't remove the shares for sale), needed their cash back quick, or has decided this sort of investment is not for them.

 

If any shares are sold at 28p, the person will be making about 0.4% profit. on a two week investment. Which compounds out to about 11% profit per year 

[Scuzzle]

If interest rates do actually rise at the turn of the year (which I would be surprised if the do), what effect would this have on any investment or dividend figures worked out as of now when they are practically non existent?