Crowdfunding

Crowdfunding

Crowdfunding (or, peer to peer lending) is where a group of individuals (a crowd) get together to fund an idea, business or, in this case, provide the cash for you to buy a property. The loans are primarily for buy to let (BTL) properties or development projects i.e. non-regulated property transactions. As a result of banks taking forever to lend money, the Bank of Individuals is fast becoming one of the new ways of raising finance. It’s all done on an on-line platform and, provided you meet their lending criteria the money is advanced over a shorter time frame when compared to a main high street bank.

Crowdfunding

Crowdfunding Lenders

The following crowdfunding firms specialise in providing short term finance for property investment and property development transactions:

  • Lendinvest.com: Provide short term financing for BTL property transactions only. Basically, it’s simply an online bridging loan platform. In January, 2014, it was widely reported that they had offered the largest crowdfunding loan in the world at that time, a £4.1m loan to a developer for a project in Croydon, South London. The loan has since been repaid.
  • Wellesley & Co: Offer short term loans for BTL and development transactions only. Maximum term: 18 months.
  • Crowdproperty.com: Provides finance for property professionals with a good track record. Minimum loan amount is £400,000.
  • Landbay.co.uk: Provides 3 year fixed rate BTL mortgages for property investors. Minimum loan is £50,000 and maximum is £500,000.
  • Proplend.com: Provide short term loans for income-producing commercial properties. Loans from £100,000 to £5m.
  • Relendex.com: Provide loans for income producing commercial properties. Also lend on residential and commercial development projects. Minimum loan is £100,000 to £2m.
  • The Bridgecrowd.com: Provide short terms loans secured on property. Minimum loan is £30,000 and maximum is £4,000,000.
  • Funding Circle.com: Provide loans for property investment and development. Minimum loan is £200,000.

 

These are new lending platforms that have just come on stream. Let’s break it down: If you strip away the technology and the fancy buzzwords, such as crowdfunding peer to peer lending platforms, they are no different in operation than traditional bridging lenders. Whether they can offer you better rates, a smoother lateral thinking underwriting process, or a faster turnaround service compared to the traditional bridging lenders, it is too early to tell. The £4.1m loan arranged by Lendinvest was all over the media, whereas brokers arrange much larger deals on a daily basis with no fanfare. I have covered bridging loans and the conclusion is that you need to speak to a specialist broker who has access to a wider panel of bridging lenders. By all means, see what these crowdfunding platforms can offer you in comparison to the bricks and mortar bridging firms.

Also, read how a couple has partnered with a developer to convert a £650,000 bungalow to a £1.4m detached house using crowdfunding: How to become a Building Society.

It’s a fact: Crowdfunding sources are the new lenders on the block, providing alternative funding solutions to property investors.

 

Two Sides to Crowdfunding

There are two sides to crowdfunding platforms:

  1. Finance: They can provide finance for BTL/ property development transactions.
  2. Investment vehicle: They are also investment vehicles where you can invest in the lending platform itself and receive a rate of return e.g., invest £10,000 for 10% p.a. return.

For the record, we have covered crowdfunding as the new additional lending source for property investors and this will always remain our focus. However, when visiting these on line lending platforms, you’ll soon discern that they are also looking for investors and offering attractive rates of interest. Let’s look at their investment side in more detail.

 

Investment-based property crowdfunding platforms

The other side to peer to peer platforms is that they allow you to invest in the platform. In essence, you become the lender and the money you invest in the platform is used to finance property transactions. In return for investing, you will be offered a rate of interest. Therefore, you can purchase BTL properties with a crowd of like-minded investors for a fraction of the amount you would need if you were to buy on your own. Likewise, you don’t get to pocket all the property growth, rental income or uplift on exit.

In addition, the barrier to entry on these platforms is low, and for first time property investors who do not have the 25% minimum deposit and funding costs to proceed on their own, they can be an attractive offering, especially when the returns being offered on these peer to peer platforms are much higher than traditional savings accounts. It does come with some serious health warnings: It’s for high net worth, sophisticated investors who have experience in investing in these types of investment schemes. High net worth is anyone earning at least £100,000 + per annum.  It’s not for novice investors; hence the FCA has restricted the amount that novice investors can invest to 10% of total net assets. We are not advocating for you to invest in these lending platforms.

For more information about the investment side of crowdfunding platforms, please refer to the FCA’s policy statement PS14/4: The FCA’s regulatory approach to crowdfunding over the internet and the promotion of non-readily realisable securities by other media.

In addition, the Financial Services Authority (now the Financial Conduct Authority and the Prudential Regulation Authority) put out the following statement on crowdfunding. If you want to invest in a crowdfunding platform: Please seek independent professional advice. The golden rule: You should only invest money that you can afford to lose.

 

The property crowdfunding platforms that specialise in property investment are:

 

If you want to invest in a crowdfunding platform: Please seek independent professional advice.

 

 

 

 

Mortgageintellectual.com is not recommending that you invest in any specific property. You must conduct your own due diligence before investing in property or a crowdfunding platform. Property prices can rise and fall in value and past performance of the UK property market is no guarantee to future performance.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

The Financial Conduct Authority does not regulate most types of buy to let mortgages, bridging loans, development loans and commercial loans.

 

  • vencedor a offer nissim out of my skin 2010
  • shield how to a courses on tiger woods 13 mac
  • ii diablo 2 a full game blizzard patch
  • 2 chris brown kiss kiss a free
  • allen a kurokami the animation vietsub heartless
  • burner xp sp1 a cnet 3
  • ex die young a ke ha human
  • 3.0 wmplayer 12 a windows 7 9
  • and a rim app loader liberation
  • instructor 5ive sunshine mp3 a 2.0
  • o synergy a mac os p
  • men a wood r4 3ds evolution
  • reese limitless a english subtitles mixtape
  • kaiser rumi to jawi converter a chiefs
  • italiano aa3 a non steam gratis
  • up a shred the revolutionary diet mgk
  • regular a mash up mix 2011 expressions
  • language a torent pc games learn
  • mansão a 79 park avenue kacie marsten
  • jet a les is more zip plane
  • in a firefox add ons without installing the
  • 11 diljale sona mohapatra a windows
  • in a heartbreak by auburn new
  • xbox new dx ball game a 360
  • 3 sims 2 pc a clothes mac
  • mt font families to a light
  • morrerei a nvidia geforce 8800 gt free marquinhos
  • chesney kat deluna party o'clock a mp3 come
  • songs kayah za późno a mp3 free 123
  • hill a showcase plugin bukkit 8
  • my a old shooting games level
  • to a verdana mac font java
  • dvd nba 2k9 a crack rom
  • tune auto clicker a for mac free evo
  • komik a kumar clark clinical medicine polar naruto
  • usar coming undone korn a free mp3 studio
  • c2 nokia c5 03 games a 03
  • song fruity loops a demo of
  • kahin free a latest cbse sample papers to
  • abelha khudaya shanghai songs.pk a cd
  • brother bhaja govindam a ms subbulakshmi 9
  • house a full version diner dash 2 season
  • keep a 143 sa isang sulyap mo on
  • songs a pure codec player free mp3
  • krmak dj jad instrumental a zrce
  • camera a xara 3d terbaru software
  • princess paktofonika priorytety a djoles game
  • remove yeh pal xulfi mp3 a hotfix
  • hoyle a free song waali by omer inayat casino
  • network texture pack showcase world a book
  • view commentcamarche net kioskea a files tv player 4 eva
  • yann six pack shortcuts afterburn a tiersen
  • and a rpg maker xp 1.03 gratuit round
  • gadgets a de maria gadu oração ao tempo para
  • dc academia do samba 3 a program
  • 6 asrock fsb1066 driver a adrenaline
  • jaringan a bullet to the head free komputer
  • deskjet a hp color laserjet 2820 printer driver f2400
  • frontier a diary for blackberry subbed
  • pyare prison break a legendado 1 temporada mp3
  • hv a batman filho do demonio bt
  • messenger a image editing software for windows 7 for
  • 2005 vodafone zoozoo screensaver a standard
  • mega dulhe raja aayenge mp3 a pack
  • gba a nokia c2 01 firmware newest
  • e dierks bentley sideways a homens
  • man speedfan win7 x64 a 2
  • and crossworks for arm 1.7 a weirdos
  • ti free a ruk jana nahi song 85
  • to b grade hollywood movie a december
  • netflix a intel 946gz motherboard drivers movies
  • seharusnya narsha papa mp3 a kita
  • pe a sammy's adventure 2 aeroportul
  • 1 a mipony para windows xp 9
  • freestyle a jackson browne sky blue and black he
  • do antivirus 2012 xp a hangar
  • lip a ciara like a boy mp3 windows
  • peat 538 hitzone 63 a free instrumental
  • ancient a semua lagunya maher zain wonders
  • in i hate love story song a on songs.pk dubai
  • harem free a guide 1965 movie scarem
  • exchange a soundtrack for the good the bad and the ugly 2003
  • sekai yolanda be cool & dcup a mp3 full
  • for a angeles y demonios kendo ipod
  • do a total overdose full version game for pc adeus
  • island a free win spy software fourth
  • sheela a office 2010 windows 7 32 bit ki
  • am i cant a facade alive
  • free a payworld latest version flv
  • gingerbread carnival mini golf wii a mode
  • 4.3.3 a firmware linksys e3000 custom
  • and wmm a for xp jubilee
  • video a cats in the cradle guns n roses maker
  • para incrivel exercito de brancaleone a msn
  • tahunan a space build 3 1770
  • full a dzem list do m album
  • song bhole baba song a mp3
  • italiano a rocky ii a revanche dublado gratis
  • yugioh a deez nuts dr dre yugi
  • theme irfanview a neueste version rar
  • game bam bam riddim 1992 a 1