In a sign of the times, crowdfunding platform Property Partner has unveiled plans to launch a fund that will take advantage of the slowing market by purchasing homes that aren’t selling.
The intention is to sell the homes for profit, at full value, at the end of 18 months.
The proptech firm will work with a range of estate agents and its own network to identify properties that can be purchased at a discount by The Opportunistic Fund and will then be improved and rented out to pay interest to investors before eventually being sold at full market price.
The fund will look for properties particularly where home owners are struggling to sell, including auction lots and those in receivership.
It will purchase homes valued between £500,000 and £2m, which it says is too large for most amateur investors.
Investors will earn 10% a year for backing the fund.
The fund is looking to raise a minimum of £1m and at least £2m, and said it expects the money to be spent within three to six months once it has been raised, while anything not used will be returned to investors.
Investors will pay 3.5% plus VAT as a fee plus 1% plus VAT management fee.
Those investing £50,000 or more will share 80% of the net profits of the fund at the end of the 18-month term once all properties are sold and capital and profit has been returned to investors.
Anyone investing more than £50,000 will see their profit share boosted to 90%, while the rest goes back to the fund.
Robert Weaver, chief investment officer of Property Partner, said: “The Opportunistic Fund will enable Property Partner to move fast as a cash buyer on properties where vendors are highly motivated to sell.
“Very often these are receivership sales or properties where debt costs have extinguished developer returns.
“We are seeing more and more of these opportunities through our network as the market softens and demand from mainstream investors is increasingly constrained by the current climate of political and economic uncertainty.”
Good grief.
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I can’t wait to invest and watch my money disappear down the drain as the market falls. I get the horrible impression that they seem to think they know what the market is going to do in the next few years. I’m not sure any sane person would predict any further than tomorrow.
I’m sure I would have a better chance of success on the geegees
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Opportunistic….yep that nicely sums it up
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Advert alert !!!!
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Surely this should come with a warning along the lines of “your investment is at risk, and you may not recover the initial funds you invest……” because this stinks of advertising and propaganda. There is no way you can guarantee prices will increase even if you buy what you feel is below market value….you might also say that the agents would not be working for their clients if they were to partner with people targeting under market value properties…..beware of lawsuits if you don’t explain to the Vendor why they want to by that property.
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So the vulture fund is hoping to raise enough to buy two properties. Wow not exactly the most ambitious of ventures.
Tell you what as a former head of aquisitions for one of the countrys largest buy to let businesses I will do it in my spare time for free.
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Proptech?
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We are considering both main providers of these products however I remain to be entirely convinced.
Neither are FCA compliant and also where there is an underwriter with commercial exposure, I’m not convinced the adjudication process is going to be entirely unbiased.
I’m edging towards the side of caution and will wait and see how it plays out during the next 12 months.
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Posted this under wrong story! doh.
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Given current the current political climate and likely economic difficulties/effect on the housing market it is difficult to think of more questionable timing for such a venture!!
Although one thing is for sure; they won’t be short of stock to choose from!!
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bonkers! is this a joke or just a bunch of tech’s watching too much homes under the hammer……don’t forget stamp and fees when shouting about your 5k profit after full refurb..
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This is pathetic, a “fund” buying 1-2 properties. These clowns are just flippers like the rest of us
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