real estate

Investing in British Properties Through Property Partners

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For decades buying houses, refurbishing them and selling them at a higher price and moving on to the next property seemed like a popular sport to Brits. Many of them see properties as investments and with house prices mostly moving up lots of them aimed to finance a property while they were young and then build a portfolio. With limited supply of new land with planning permissions this strategy worked well most of the times in the past, except when the market overheated and a real estate bubble popped.

There are downsides to this do-it-yourself approach:

  1. Concentration of risk in one or few properties: if they underperperformed for what ever reason, the yield was sub-average
  2. A lot of money, time and work required. The investor had to do everything itself as a landlord
  3. Selection of new properties usually limited to a small region the investor lives in

British platform Property Partner allows everyone to invest in British properties from a minimum of 50 GBP. Investors select a listing, invest into a SPV (special purpose vehicle company) that pools the investment in the property. The SPV collects rental income and pays dividends to investors monthly. A useful table of the past achieved rental income can be seen here. In the green marked cases the actual rents are higher than the original forecsts. Potentially investors can also gain, if the value of the property rises.

The time span of an investment is 5 years, however investors can try to sell their parts on the secondary market, which allows discounts and premiums any time.

The platform allows the investor to diversify across multiple properties easily. The fee is 2% for investment (in new listings or buying through the secondary market). For management, advertising and letting Property Partner charges 12.6% of gross rent.

So far Property Partner has funded 311 properties for 43.9 million GBP with 9.100 investors participating.

property partner listingFor new listing there is a pre-order period, where bids are collected. If the listing is oversubscribed then each investor is allocated a lower proportionate amount of shares.

Each listing contains an investment case desctiption, property details, a floor plan, financials, a solicitor’s report and a surveyor’s report as well as the house price index (HPI) information for the area.

For the secondary market there is a ‘data view’ section which lists key indicators for the parts listed for sale.

Investors that do not want to pick listings can set up the auto-invest option which will automatically invest an amount the investor sets each month in 5 properties.

Investing from abroad

Property Partner allows foreigners (except for US residents) and corporations to invest. If you do not live in the UK but see the UK housing market as an investment opportunity Property Partner is a hassle free possibility to invest in british real estate. Non resident investors should consider using Transferwise or Currencyfair to avoid high bank fees and get a better currency exchange rate.

How to get 50 GBP cashback at sign-up

To get 50 GBP referral cashback, when you invest more than 1000 GBP sign up now via this link . To see available promotions by other platforms visit our cashback offer page.

property partner cashback

Property Partner cashback confirmation at sign-up. To see it follow this link and sign up.

 

 

Interview with Andris Rozenbahs, COO of Viventor

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What is Viventor about?

Viventor is about providing sensible investment opportunities for investors from all over Europe. As we started considering the idea of Viventor less than a year ago, peer-to-peer financing was achieving remarkable success in the US and the UK. In contrary, the “old continent” was relatively underserved.

And so the goal was set – to build a peer-to-peer lending platform for European investors that is accessible, makes investing convenient, and offers high quality services, investment opportunities, and the product itself.

What are the three main advantages for investors?

Firstly, it is the investments themselves. All loans currently offered are secured by liquid real estate mortgages, as well as come with Buyback Guarantee. The weighted-average LTV ratio of our loan book is 28.45%, and we are proud to be the market leaders in terms of providing such low-risk opportunities.

Secondly, the investors receive fixed monthly interest payments. Relatively few platforms do this, but we see it as an advantage for the investors. Instead of diminishing interest and trying to crack advanced formulas, we offer straightforward logics and exactly the same payments every month. We want to make investing convenient also for people relatively unfamiliar with the world of finance and peer-to-peer lending.

Thirdly, it is the simplicity and convenience of investing. We are constantly making efforts towards removing the friction from the investment process itself by building the platform and its UI simple and intuitive for any user. Improvements based on everyday findings are constantly implemented, new languages are added, and educational material is made available. Our aim is to for investing to be simple and enjoyable.

What are the three main advantages for borrowers?

Viventor does not originate loans itself, and this is unlikely to change in the foreseeable future.

However, if we speak about the partner companies that have currently listed their loans on Viventor, there are a couple of things worth noting. The companies consist of professionals, possessing years of experience in non-bank lending and underwriting, and having their skin completely in the game. Also, access to financing for eligible borrowers is considerably faster than that offered by alternative creditors. This has been achieved by combining years of experience and knowledge with machine learning and other modern technologies.

Andris RozenbahsWhat ROI can investors expect?

Currently, investors can earn up to 7% p.a. fixed, and there are no fees withheld. The number will be going up though, as we will be adding other types of loans with higher levels of interest.

Prestamos Prima, the mother company of Viventor, operates in Spain? What led to the decision to incorporate Viventor SIA in Latvia?

We as professionals have been in the non-bank lending for many years, involved in other projects before Prestamos Prima. While Spain is one of the major markets at the moment, it is certainly not the only one, and you can expect loans from other European countries being added.

What concerns Viventor being incorporated in Latvia – we are Latvians, and prefer to stick to our origins whenever we are able to choose. There is a lot of untapped potential and hidden talent in the Baltics, but then again – I believe people familiar with the European peer-to-peer financing market are well aware of that already.

Is the technical platform self-developed?

Yes, Viventor has been built in-house from the very first line of code, and we will keep the development of platform to ourselves. All in all, we believe the right approach for improving Viventor is by gathering feedback, applying our lessons learnt, constantly pivoting and optimising. And it is clearly much more efficient to achieve this with a dedicated engineering team in-house. Continue reading →

Interview with Brian Dally, CEO and Co-Founder of Groundfloor

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What is Groundfloor about?

GROUNDFLOOR is taking private real estate lending public. We’re paving the way to open a new $70 billion lending market to all – and that’s in single family home renovation and construction lending alone. You can read more about how we’re doing that here.

More broadly, we like to think of the company as an exposition on a theory of capital markets. We believe the broadest base of capital wins—because it’s faster, cheaper, more flexible and more efficient.

What are the three main advantages for investors?

  1. GROUNDFLOOR makes real estate investing more accessible than ever before. We create new investment opportunities for non-accredited investors; a group of Americans that have never had access to these types of investments before.
  2. Our typical loan term is dramatically shorter than what you see with P2P lending products like Lending Club. Our average term is 6 or 12 months, compared to 3-5 years for typical deals elsewhere.
  3. We offer dramatically higher returns than traditional investments. During our one-year pilot in Georgia, the average annualized yield for our investors was over 12 percent. For context, that means that GROUNDFLOOR outperformed the compound average annual return of Charles Schwab’s mutual funds between 1970 and 2014.

What are the three main advantages for borrowers?

  1. It’s fast and simple to get funded on GROUNDFLOOR. You can submit a project by checking your rate in less than 5 minutes. Projects have 30 days to fund, but most projects fund much sooner once they are posted. The closing process is quick and painless using the same closing attorneys you already use.
  2. GROUNDFLOOR is a reliable source of capital. We fund construction, renovation and other loan types that are typically difficult to bank finance, and we offer low fixed interest rates starting at 6% (not including fees).
  3. We offer terms that fit borrower needs. Most of our loans run from 6 to 12 months. Borrowers can repay their loan at any time to reduce borrowing costs, and personal guarantee and cross-collateralization is not required in most circumstances.

Brian DallyWhat ROI can investors expect?

GROUNDFLOOR backs independent builders with secured loans that pay 5-26% annually. During our one-year pilot in Georgia, the average annualized yield for our investors was over 12 percent.

What is the background of Groundfloor? Who are your seed investors?

GROUNDFLOOR was founded in February 2013 and is based in Atlanta. We have raised $2.5 million in seed funding from angel investors including Michael D. Olander Jr, Bruce Boehm, Tibor Nagygyorgy, Mark Easley Sr. and Inception Micro-Angel Fund.

Brian Dally is co-founder and CEO. He has spent his career building disruptive technology startups during stints in Silicon Valley, Boston, London and the North Carolina Triangle region. Previously, he led the launch of Republic Wireless to take on the big four cellphone carriers to international acclaim.

Nick Bhargava is co-founder and EVP of regulatory affairs. An expert in securities law, Nick was heavily involved in the JOBS Act as an early pioneer who advanced the concept of equity crowdfunding. Nick and Brian met through Groundwork Labs in the Triangle-area startup hub the American Underground. His years in finance have included work for the Financial Services Roundtable, SEC, FINRA, TD Waterhouse and RBC Financial Group. Continue reading →

Prestamos Prima Set to Launch P2P Lending Service Viventor in Spain

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Viventor logoBarcelona based company Prestamos Prima launched Viventor, a p2p lending marketplace for real estate loans.

Viventor will be focused on serving the investor side of money market. “The financing model of high street banks is outdated, and they are too slow to change the course as fast as the market demands. Recent years have shown that alternative finance solutions are reshaping the industry, and a major change on stage is inevitable,” states Andris Rozenbahs, CEO of the Prestamos Prima Group.

Vivntor will serve loans for residential and commercial property. All borrowers will be businesses, with loan terms one year and longer. The average interest rate investors will earn is expected to be around 6 to 7.5%. Prestamos Prima told P2P-Banking.com that there will be a secondary market.

The new platform, Viventor, will launch in fall 2015. Initially, it will be open for EU investors only, and provide the opportunity to invest in loans secured by Spanish mortgages. Real estate crowdfunding opportunities, investment insurance and inclusion of the borrower side are all on the roadmap. The Group CEO stresses: “We are set to make tremendous efforts to ensure security and credibility. Our goal is to provide quality investment opportunities, no junks. All the loans will be secured by mortgages carefully evaluated, and Viventor will keep its stake in all the loans listed.” Continue reading →

Money360 Secures 110M US$ for P2P Commercial Real Estate Loans, Including 100M US$ from Leading NY Investment Firm

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Money360, Inc. , an online marketplace / peer-to-peer (P2P)  lending platform that directly connects commercial real estate borrowers with accredited investors, today announced that is has secured 110 million US$ to originate/purchase loans to borrowers through its online lending platform. The money was secured through a 100 million US$ loan purchase agreement and partnership with a leading New York investment firm that has pioneered online lending, as well as 10 million US$ in cash raised by Money360 through its wholly owned subsidiary, M360 Fund 1, LLC, from investors including investment banking executives and successful technology entrepreneurs.

The funding and loan purchase capacity comes at an ideal time, too, as more commercial borrowers than ever are using Money360’s online marketplace to find the best solution for their commercial real estate borrowing needs.  Since re-launching in September 2014, the company has experienced significant growth with more than 150 million US$ in loan requests last month alone. Continue reading →

Mintos – P2P Loans Secured by Residential Real Estate

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In Latvia p2p lending service Mintos has publicly launched. All loans are secured against residential real estate owned by the Latvian borrowers. CEO Mārtiņš Å ulte told P2P-Banking.com: ‘We strongly believe that secured loans in our region and beyond offer much better risk/return matrix for investors. … We have raised 1 million Euro from a local venture capital fund. That has allowed to put together a great team and build the product. Our immediate future plans are to expand to other geographies on the borrowing side as well as test other types of secured loans. On the investing side we are already open to all European Union countries and Norway and Switzerland. We are constantly improving our product and putting daily updates as we go by taking into account investor suggestions and ideas so that we can deliver great user experience.’.

Actually Mintos started accepting borrowers and making loans in September already. Mintos prefinanced all loans and now the investors can invest into these prefunded loans. Due to regulation reasons, Mintos will continue to make all loans, before investors bid on them. CEO Mārtiņš Å ulte added: ‘… we [will keep] 5% of each loan on our books to align our interests with those of investors.’.


Chart: Cumulative loan originations by Mintos

As said all loans are secured by real estate and all contracts with borrowers are signed before a notary, which eliminates the risk of identity fraud. Typcial interest rates range from 12% to 19% with loan amounts between 1,000 and 100,000 Euro (average now is about 8,000 Euro).Loan terms are from 3 months to 120 months.

Investing at Mintos – my test step by step

The minimum invest is 10 EUR per loan. Mintos charges investors a 2% annual loan servicing fee based on the outstanding principal.

Naturally I wanted to test the service myself before writing this initial review. It took only 2 minutes to register. I then transfered a small amount via SEPA transfer which – as SEPA is pretty fast – was credited 2 days later to my Mintos account.

There are currently 62 loan listings open for bidding. There are filters allowing investors to narrow the list they want to look at and the list can be sorted by clicking on the column headings. Bids can be made directly from the overview table or the investor clicks through to the loan details view. Continue reading →