Investors are being offered a 13% stake in easyProperty – due to go live in two days’ time – in exchange for £7.5m.
The online agent says it will spend half of that amount on marketing, with £2.1m going on staff and the rest on admin, IT development and the costs of the deal.
The 14-page investor document, of which Eye has obtained a copy, is offering “exclusive marketing joint ventures with blue chip partners”.
The brochure also refers to its plans to roll out across Europe. It says the six European markets where easyProperty has this option are five times the size of the UK market.
The document puts the amount of money earned by UK agents at a potential total of £5.7bn this year – lettings at £0.8bn, and sales at £4.9bn. This is on the basis of 160,000 properties let per month and 1.1m homes sold.
easyProperty – which charges 0% commission but plans to make money from selling services – says it could make £1,338 per rental property and £1,947 per sales property.
In the document, easyProperty says its services will appeal to professional landlords and developers, and that it will offer serious competition to the high street.
It cites “huge savings” for both landlords and vendors, and also “Likeability – champion of the people vs disliked agent”.
The document explains that services, such as Rightmove and Zoopla listings and boards, will be bought at “wholesale prices and sold at a mark-up”.
easyProperty, which is holding a launch party on Wednesday at the Natural History Museum “among the dinosaurs”, is also currently raising £1m on Crowdcube.
At the weekend, it had raised £135,000 from 68 investors. The largest investment so far has been £60,000.
The Crowdcube campaign has ten days left to run to reach its target of £1m in exhange for 1.5% equity. So far, it has achieved 13% of target.
Comments (36)
Come on easy Chris – I asked a perfectly reasonable question yesterday, which you have so far ignored. Here – I will repost it, so you don't have to look for it… you state "…we are not a "passive intermediary" we offer the full range of letting agency services and much more besides to come…". All well and good – if and ONLY IF that is actually the case. Let's test the claim. Now – the property in Middlesbrough you had as your one and only has miraculously disappeared from view (no doubt you'll say you let it in a day…), so I'd like to pick up on the nearest to my location. You list a property in Arthur Street, Ferryhill, DL17. Please tell me – HOW was that property actually listed by easyProperty?
Hopefully you'll get round to affording me the courtesy of an answer TODAY…
Not much of 'today' left, easyChris – I'm still patiently waiting…
You and me both Peebee. Having this story drop into the achive has let Chris off the hook, but no doubt you will be waiting for him next week.
NEXT WEEK?? Come on, Robert – what with the wildly expensive 'launch among the dinosaurs' (you've just got to admire the thought that went into that, haven't you?) tomorrow; the fact that the numptyfunding is now at near 80% of target, and the scoop that in the next 72 hours easyPlop will enter into a minimum of seventy-two new 'partnerships' (most of them with el-cheapo cameras that will take only quarter-decent pics of the properties they will list for peanuts…), you'd be wise to bet your shirt on the next thrilling instalment of 'The easyChris Show' being sometime Thursday latest. I' for one, can't wait – it'll give me YET another chance to ask easyChris the thorny question he's avoiding like the bl00dy plague… ;o)
Just catching up, Chris when you say "we are not afraid to take on a market that for too long has not served landlords nor tenants well ,by overcharging and hiding fees. Study after study shows this, as does our own research."
'Study after study' is the bit I am interested in; for the past 20 years I have been looking after the lettings industry (think of me as the janitor) and now well over half of all the rent collected annually is being processed by either one of my systems. Developing a sucessful anything requires being in touch with the industry and the market, please could you point to a couple of these studies so I can catch up with reports and findings that have passed me by?
Honestly, if this doesn't look like something two men and their dog threw together, I don't know what does. Where in earth did all that investment cash go to? Not on researching relevant legislation, apparently. Still, start at the bottom and then there's only one to go….
Easy chris I've just been taking a look and you should note that there is now a law about fees to tenants being transparent. In essence, you need to state what fees the tenant will be required to pay if they rent a property through you, and this needs to be displayed prominently, close by to the asking rent. At present you state, next to the asking rent, and in bold font, "No hidden charges! No admin fees!" Then right at the bottom of the page, in much smaller font, you list fees to tenants at £50 each. The one I'm looking at also has the following statement in the property description: "We do not charge ANY agency fees. All you have to pay for is rent and deposit". Best to get your property experts to deal with this otherwise you might have Shelter and others on your case! Good luck with the venture…
well I have a feeling Easy Chris will not be playing on here tonight then……….
…or tonight either, for that matter, Ric! ;o)
@easy Chris….You have a function on your website that tells people if students, DSS tenants etc are accepted, some properties have a cross next to it. I'm not sure you've thought this through.
Oh yes …..just seen that as well…..do you know laws associated with thet term discrimination Easy Chris??? Oh and any more thought gone into your quotes on landlords being "signed up yet"…whilst your reading this I've got to say I love some of the photos on the handful of props you are "marketing" especially the one taken with the phone of a toilet with a lid up, and the one of a kettle, and the one of the kids toys…SURELY you are vetting photos before they are published?????? second thoughts don't answer that particular question as those photos give you the impression you deserve on the site….Still want the q about the "sign ups" answered as I believe you have lied on behalf of easyproperty or at best totally mis informed people with your claims.
Well… today HAS been a busy day for numptyfunding! The easy proposition has lit the fires of another 17 investor types since this article was published – and one lucky individual has sunk 200 large into it. Should have read my post and checked out the quality of the product before gambling to that extent…
Two 911's then?
Checking out Crowdcube, isn't it curious that the last few "big investors" have actually invested in no other business in their histories other than EP….. little bit of self investment to save face going on there I wonder. The biggest investor (yeah right) is listed as £100,000, someone should have told him a new Porsche 911 turbo would cost about the same and he would lose less on it!
Check out the listing for Garras, Helston TR12 – anyone wishing to rent this property for the tidy sum of £1200pcm might just want to see more than one external pic (taken in third gear by the looks of it) before signing a rental agreement – especially a photo taken SLIGHTLY more recently than that shown… ;o)
Yup, easy Chris – a fine example of how you are going to take us all and show us the way home…
That is funny and to quote Chris further "Startups are by their nature disruptive and fast moving" ….Can I suggest you slow down then when it comes to taking the photo's, they'll be less blurry that way. That said I do accept as PeeBee has already alluded to, that time travel can be a fickle technology when you want to lean out of the window and snap a pic.
Ex home buyer report surveyors- slow down to 30, make sure it exists!
The date on the picture is 2005!!
You got it in one, matey! ;o)
And according to Easy's website, they will market to the property's "full potential", it says:
You upload your pictures, floor plan, and property description – and we’ll get it on our site in the next couple of hours. (Just as soon as one of our property experts has reviewed it to make sure it’s marketed to its full potential.) Really?
"easy Chris"? For a bloke in marketing that is a genius shot to the foot- it makes you sound like you hang about in Toilets rather than To Lets! You are easy, you are cheap but you offer a full range of services? Yep I can see why you went there! not sure you thought it through but its done now. (Where is the embarrassed emoticon Ros?
So… easy Chris (seeing as you dropped your previous monicker…) – you state "…we are not a "passive intermediary" we offer the full range of letting agency services and much more besides to come…". All well and good – if and ONLY IF that is actually the case. Let's test the claim. Now – the property in Middlesbrough you had as your one and only has miraculously disappeared from view (no doubt you'll say you let it in a day…), so I'd like to pick up on the nearest to my location. You list a property in Arthur Street, Ferryhill, DL17. Please tell me – HOW was that property actually listed by easyProperty?
£7.5 m=…"The online agent says it will spend half of that amount on marketing"….OK so that's £3.25M on seo and advertising and only £2.1 m on staff and admin…….This is the reason that these models will fail big time….they think that seo and advertising a brand is enough but as this is a sevice industry the spends are so balanced in favour of getting people to use you rather than on people to provide the service. If anyone started up a high st branch and spent masses on marketing, but only manned it with one person it simply wouldn't work as is being shown by the onlinies thus far…£millions spent on seo and advertising with no real penetration into market share.
Right, there's clearly an IT problem, this cant be right. 10,000 landlords busting to get going with them and on launch day 60 odd listings for rent?? – 0.6% conversion………….also its seems some / many of the photos might have been taken on a camera phone and aren't all that, All very strange?? – Jonnie
I don't think I've seen a poorer set of photos. There was one where the photo was of a Finding Nemo shower curtain going into a bath. I think I may have to back track on any of my statements regarding their possible dominance though as I think they are about to take over the slum landlord market by storm. Has the domain sleazyProperty.com been registered yet?
"Selling services" …… isn't that what we all do? The difference being that the fees for their "services" will be payable in advance with no guarantee of a sale. If I was the owner of the 'average' property in the UK worth £265K (outside London), I can't see why paying 0.75% in advance to do most of the work myself with no guarantee of a result will be more attractive than paying 1.25%-1.5% only on successful completion, with the agent taking an active interest in the success of the my sale. Also, if they are expecting to get an average of £1338 pa per rental property without providing the full range of hands-on tenancy management services that the usual non-local investor landlord expects, they must be relying on finding some extremely gullible customers. I can't comment on the potential for their success in Europe – maybe there is a huge untapped market there and if so, good luck to them. I have nothing against this company and if their model works then they will prove me wrong, but asking for this amount of investment before they have any share of the market does require considerable faith in the 'easy' brand. If I have done my sums correctly, £7.5m (13%) puts the company valuation at £57m. If this represents 10x their anticipated annual profits then they are expecting to make £5.7m pa profit from a market worth a maximum of £5.7Billion. So are they claiming that their profit will be 10% of the entire domestic UK property marklet? Someone – please correct my assessment if this is too naive – I am no stockbroker.
The market isn't worth 5.7 billion more like £2.7 billion of which abour 2% goes to this niche end of the market. That 2% is worth £53.5 million in total if and only if they are pulling in break even commisions averaging 1.2% (they won't be the service level won't support it; it is "Easy" after all)
In effect if Easy Property are 100% dominating the passive intermediary end of the industry and are charging break even fees then they might bring in £5 million profit, but to invest in such a scheme would be an ego punt by people either too rich to miss the cash or just naively stupid.
thanks @benay , we are not a "passive intermediary" we offer the full range of letting agency services and much more besides to come. If you believe we will only take share from other online players then it is you my friend who are naively stupid. Startups are by their nature disruptive and fast moving,we are not afraid to take on a market that for too long has not served landlords nor tenants well ,by overcharging and hiding fees. Study after study shows this, as does our own research. You can throw rocks at us all day long,we will just get on with growing a business from nothing to something,how big the something is time will tell.
yadda yadda yadda
no one throws rocks at you…..you talk nonsense to a point where you are always proved WRONG and then go quiet…Then dip into the discussion and then you're off again.
You still haven't answered the 1000's of landlords "signed up" question….so here it is again . Can you clarify that you have these landlords "signed up" which in the industry means contractually signed up to sell or rent their property or just registered for more information on your site. You are probably sick of the site of this question so either answer it accurately or don't bother posting the nonsense on this site.
Not a passive intermediary firm? why set out your stall to look like one? That is a bit like a Red Kite dressing up as a Turkey in December.
I am incredibly stupid, I admit that, but at least I am smart enough and experienced enough to see the flaws in what you are trying to do in the market sector you are trying to enter.
Have you managed to think of a service industry that has transitioned on line yet?
uhh, 10% of £5.7 billion is £570 million not £5.7 million. Even so, trying to capture 1% of the annual market is going to be hard from a start up company.
Thanks Ray – I always get my millions and billions mixed up….really annoys my bank manager. But as you say, a projected profit equating to 1% of the entire UK property market turnover is pretty ambitious to say the least!
So Purple bricks go out and raise £7.5 million from an investor and Robert Ellice thinks "oh me too". This company is looking more and more like one of those firms in the internet boom who thought that if you had a company called Pileof Sh1t and added .com to the end of it then it was going to be a success!
EasyProperty have a mountain to climb in order to raise that much. Which reminds me, so do we so please support us – over £9k raised so far for Pancreatic Cancer Research.
https://www.justgiving.com/Northwood-Charitable-Foundation
Did Stellios (Or his Dad) put the £60k in?