FSA gives green light to online crowdfunding platform

The Financial Services Authority (FSA) has for the first time approved a crowdfunding website facilitating direct investment in small businesses. It means investors using the website, Crowdcube, will now be able to claim compensation from the Financial Services Compensation Scheme and access the Financial Ombudsman Service if they have a complaint.

The opinion here at The House Crowd is that it’s good to see a regulator starting to approve dynamic forms of financing like crowdfunding. As demonstrated by our unique business model, crowdfunding can provide great returns for all, in a safe, transparent way.

Currently, as The House Crowd doesn’t fall under the definition of either a CIS (Collective Investment Schemes) or OEIC (Open Ended Investment Companies), we do not require the FSA’s authorisation to operate.  However, even though we are not FSA regulated, we do everything we can to ensure that all our dealings are as transparent as possible and that investors are made fully aware of the risks as well as the rewards in any investment. We also ensure your money is protected as far as possible – you never pay money directly to us, all investment monies are paid to a solicitor’s client account and held there until the property is purchased and your shares are issued.

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit www.http://thehousecrowd.com/thehousecrowd//how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit www.http://thehousecrowd.com/thehousecrowd//about/our-manifesto/). If you’ve read enough and want to invest now, visit www.http://thehousecrowd.com/thehousecrowd//invest-in-property/).

The perils of investing in repossessed property

Our MD, Frazer Fearnhead has just had an article published in the Daily Mail/ This is Money on the Pitfalls Of Buying Repossessed Property.

It’s never plain sailing when you are trying to buy investment properties at rock bottom prices, as some property investors have already have found out to their considerable cost.

But if you are a prospective purchaser of bmv properties such as repossessions, then you will undoubtedly be  interested in the sort of nonsense that goes on behind the scenes.

It’s, nevertheless, something The House Crowd will continue to take in its stride  so we can deliver high yielding investment properties for all our property investors.

Have a read through the article:

The Pitfalls of Buying Repossessed Property

£300m Money Pot to Tackle Plethora of Empty Homes

We were extremely pleased by Communities Minister Don Foster’s announcement earlier in the week, pledging to ensure that some 5,000 empty homes could be refurbished and brought back onto the market as the government battles to end the national housing shortage.

Local councils, housing associations and a range of other organisations including community and voluntary groups are being invited to bid for money from a £300million pot of funds, in order to tackle the number of empty and run down houses in the Greater Manchester area, which could help rejuvenate often blighted local areas.

With a nationwide council house waiting list of over four million people, we think this is a great idea, as it will help tackle the plethora of empty run down properties to be found throughout the UK. Furthermore, it will hopefully help alleviate the vicious cycle where one run down home can bring an area down, which can then spiral into whole communities being affected.

Recent government figures show the number of empty homes is already decreasing, having dropped from 300,000 in 2009 to 259,000 in 2012.

At The House Crowd, we purchase BMV properties which are often unliveable in when we acquire them, and regenerate them into attractive homes before renting them out, providing affordable housing in areas that are often desperately short of housing.  And all of which still delivers an excellent return on investment for our investors.  So we’re providing a community service with the help of our investors, whilst still providing them with a better return on their investment than they would find with any bank.

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit www.http://thehousecrowd.com/thehousecrowd//how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit www.http://thehousecrowd.com/thehousecrowd//about/our-manifesto/). If you’ve read enough and want to invest now, visit www.http://thehousecrowd.com/thehousecrowd//invest-in-property/).

The Perils of Buying Repossessed Property Part 1

All the property “gurus” (and I’ve really started to despise that word) advocate buying BMV property – “you make your money when you buy the property not when you sell it” as Robert Kiyosaki (the guru’s guru) says.

One of the best ways of doing that is buying repossessed properties at below market value. Given the state of the economy, you can find plenty of these deals through estate agents and auctions and, if you are buying large numbers direct through the asset management companies. It helps enormously if you are a cash buyer and at the very least you need to have funding already in place as the seller will always want to see proof of funds before even considering an offer.

So, in theory at least, buying repossessions (or “corporate sales” as the agents euphemistically now call them) can be a lucrative property investment strategy enabling you to buy at a bargain price, renovate it and sell to the open market at a decent profit or rent it out and obtain a very decent yield.

But you need to be fully prepared for what’s in store. Here are a few examples of the issues we have encountered in the last few months which are (apart from the last one) fairly typical of what you will experience if you start buying repossessions.

Ask Yourself: Is it really a bargain?

Just because it’s a repo (ccmph, sorry… corporate sale) does not automatically mean it is a bargain. Doing your due diligence on the internet/ telephone is one thing to establish previous property sale prices and comparables, but you absolutely must do a site visit to establish whether it is truly a bargain. Repos, by their nature, tend to be in a fairly appalling condition. You need to calculate what you will have to spend to bring the property up to scratch. It may well be that whilst the 2 bed terrace for sale at £35,000 looks like it is a great deal at £15,000 below comparable properties, it may actually need £20k spending on it and there is little margin for profit. Many estate agents won’t tell you that over the phone, even if you ask them, as they like to get as many viewings as possible even if it should be obvious from what you’ve told them that it won’t be suitable for you – I think it gives them something to show their client as evidence they have been doing some work!

A more unusual example (but one that is becoming increasingly common) is Japanese Knotweed. In quick succession, we found two properties that looked like great deals until we realised the gardens were riddled with Japanese Knotweed. This is a notoriously invasive weed, which can cause serious damage to property. It also makes the property un-mortgageable and can be an expensive problem to clear up, taking many months. All of which can of course represent an opportunity, if the buyer will reduce the price accordingly. But many sellers, even in this market, are extremely stubborn and in neither of our cases would they reduce the price, so we had to walk away. Presumably, some unsuspecting person with an incompetent surveyor bought them in the end, as they are no longer on the market.

Tip: You must do a personal viewing and work out your refurb budget allowing a 15-20% contingency before making an offer.

Public Notice

It is the duty of the bank in possession to obtain the highest price possible. They will never agree to take a property off the market. This means even if they accept your offer, you can be gazumped at any time up to exchange of contracts, losing survey fees, structural engineer fees, search fees and legal fees in the process. Quite an expensive business, and if it happens a few times it will eat up a high proportion of any profit you hope to make, especially if you are dealing at the low end of the market. It’s especially galling when the other side has caused the delays and allowed time for a rival purchaser to make an offer.

Whilst being a cash buyer has its advantages, as an investor you are looking to make a profit. There is a ceiling to what you can pay and still retain a realistic chance of achieving this and, as you may well be competing against potential owner occupiers who are not so like minded, and likely to be prepared to pay more, expect to be gazumped – frequently.

Part 2 featuring more of the joyous perils and pitfalls of buying repossessed property will be published next week..

Who to believe in the current political landscape?

Political parties are renowned for being worlds apart, and this week was no different, as we read about, Grant Shapps, the housing minister and his Labour counterpart Jack Dromey, both announcing differing views, polls apart, on the housing sector.

As is expected, our current government claims to be seeing a rapid and dramatic increase in the number of affordable homes being built, whilst the party out of power highlights a mounting crisis and a collapse in affordable homes being built. Who do you believe?

At The House Crowd, we don’t rely on manipulated housing statistics, attention grabbing headlines or whether the market is ‘doom’ or ‘boom’. As a property investment group, we are focusing on refurbishing empty BMV properties, breathing new life into them and then selling them on, hopefully helping to get some of the currently un-lived in bmv properties back into use again in areas where they are desperately needed.

So why not leave the housing debate to the ministers and put us to the test by getting involved with the House Crowd!

 

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit http://thehousecrowd.com/thehousecrowd/how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their property investments (for more information about us, visit http://thehousecrowd.com/thehousecrowd/about/our-manifesto/). If you’ve read enough and want to invest now, visit http://thehousecrowd.com/thehousecrowd/invest-in-property/).

 

The changing face of property

You don’t need to be a property expert to spot the differences between new build properties and those which have stood firm for decades. With modernity comes change however, but what continues to monopolise the changing face of property is the level of home ownership.

According to research compiled by Lloyds TSB, since reaching a peak of 71% in 2003, owner occupation has been on the decline, while the private rented sector is on the rise.  Worryingly, the proportion of social or council housing stands at just 18%, falling from a peak of 32% in 1981. This may explain why the waiting list for council properties continues to grow throughout the UK.

We think these figures are a travesty! While we know there is high demand for rental properties (just remember those council house waiting lists!), we also know there is demand for quality, affordable housing to purchase. Which is where we come in! As a property investment group which aims, not only to create strong returns for our investors, but to make positive contributions to the communities within which we operate, we are on a campaign to breathe life back into old properties, and by default, the communities which they often blight.

Breathing New Life Into Below Market Value (BMV) Properties

We purchase BMV properties which are often uninhabitable at the point of purchase, and regenerate them into attractive homes before either selling them on, often to those seeking that illusive step onto the property ladder, or rent them out providing affordable housing in areas that are often desperately short of housing.  And all of which still provides an excellent return on investment for our investors – what could be better!

 

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit http://thehousecrowd.com/thehousecrowd/how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit http://thehousecrowd.com/thehousecrowd/about/our-manifesto/). If you’ve read enough and want to invest now, visit http://thehousecrowd.com/thehousecrowd/invest-in-property/).

Crowdfunding is sweeping the nation!

It appears The House Crowd has started a trend (well we like to think we have!) as there isn’t a week that goes by without the term ‘crowdfunding’ appearing in the media.

This week, it was great to read that Stainless Games, an Isle of Wight-based video games developer, had successfully secured cash on crowdfunding site Kickstarter, to finance a new edition of Carmageddon.

Fans of the controversial game have pledged more than £255,000 to the company, however, unlike at The House Crowd supporters do not receive a share of any profits, but instead are offered a range of scaled incentives to commit more money – including a free copy of the game. We think this method of pooling money together is a great alternative to the traditional model of funding which usually comes via large investors or publishers, as it helps gamers feel involved in the process.

As a property investment group based on the crowdfunding model, we are great supporters of the crowdfunding movement and we hope more and more companies take advantage of the crowdfunding phenomena that is sweeping the nation.  With the banks loathe to lend to businesses and individuals, not to mention the poor returns on savings from them, crowdfunding is going to be seen as the way forward for a number of businesses. So why not hop on the bandwagon and get involved too by joining us!

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit http://thehousecrowd.com/thehousecrowd/how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit http://thehousecrowd.com/thehousecrowd/about/our-manifesto/). If you’ve read enough and want to invest now, visit http://thehousecrowd.com/thehousecrowd/invest-in-property/).

Did you hear us on Radio 4?

This week saw our very own managing director, Frazer Fearnhead take to the microphone and appear live on Monday You and Yours show on BBC Radio 4, discussing the numerous benefits of being a member of The House Crowd.

The interview was a great success and as a result we have had around 40 people sign up to become members of our Common Interest Group,  who are then able to invest in property via The House Crowd.  If you didn’t get the opportunity to listen to the interview, then don’t panic, here is the link, http://www.bbc.co.uk/iplayer/episode/b01j5fwb/You_and_Yours_28_05_2012/ (here is 17 minutes, 20 seconds in).

We hope you enjoy listening, and if you haven’t already jumped on board the House Crowd bandwagon,  why not join us now?  You can sign up for our newsletter here, which will provide you with a downloadable link to our free, no obligation Information Pack which should answer all your questions on how we work and what crowdfunding is.

The House Crowd is a brand new concept in property investment which allows people to invest small amounts via crowdfunding (for more information on the process, visit http://thehousecrowd.com/thehousecrowd/how-it-works/). We are committed to breathing life into empty, rundown properties whilst giving investors great returns on their investments (for more information about us, visit http://thehousecrowd.com/thehousecrowd/about/our-manifesto/). If you’ve read enough and want to invest now, visit http://thehousecrowd.com/thehousecrowd/invest-in-property/).

Is the Government listening?

Okay, we have known for years that not enough new homes are being built. Increased demand and shortage of supply will  inevitably drive the affordability of housing out of the reach of many and create a huge problem. But what about making more use of the housing that we already have as opposed to building new homes?

(http://www.guardian.co.uk/society/2012/may/17/government-failing-homes-built?CMP=twt_gu)

We have a plethora of empty run down properties that have to be considered when we discuss this housing shortage – over 750,000 empty properties last time I read a report on it.  Surely we can look at incentivising further the investing in repossessed properties, bringing them back to life as opposed to just thinking about building expensive new ones.

At The House Crowd, our ethos is to make money for our investors; however,  we are also proud of the fact that we breathe new life into properties that others have left to rot.  Our methodology is a win/win for everyone, we allow people to make great returns from investing in property (from as little as £1,000) and in doing so provide a home that otherwise wouldn’t exist for a tenant or first time buyer.

By the way we are well under way to renovating HCP 003 and have offers accepted on HCP004. House Crowd Project 005 will be launching tomorow

If interested in joining us and making a great profit whilst breathing life into distressed property please join us here: http://thehousecrowd.com/thehousecrowd/invest-in-property/)

 

Council home eligibility means private rented sector is likely to boom

Local councils across the country are expected to announce new measures to tackle the 4m strong waiting list for council properties; meaning a wave of demand in the private rented sector is imminent.

Hammersmith & Fulham council has led the way, announcing that couples earning over £40,000 a year will no longer be eligible for a council property, which has gone much further than housing minister Grant Shapps’ suggestion that those earning over £100,000 should be not eligible. And other local authorities are expected to follow suit.

This burst of activity is in response to the Government’s new legislation which has seen an end to tenancies for life, affording local authorities more flexibility when dealing with waiting lists.

As a property investment group which focuses on refurbishing distressed or repossessed properties and providing property to those most in need,www.http://thehousecrowd.com/thehousecrowd/ is already poised and ready to meet this surge in demand from those no longer eligible for a council property.