An online property business is raising money on a crowdfunding platform.
Property118 is looking for £150,000 in exchange for 10% of equity, and is planning a property portal.
The ‘pre-money’ valuation is £1,350,000, according to Seedrs.
The business has already attracted 60 investors who by yesterday had put in £113,350.
Property118 is run by Mark Alexander, who has updated the business plan for the portal which, it appears, will accept both agents’ and private listings.
Private landlord Mark Alexander has announced his intentions to sell his own property portfolio and home, and to emigrate to a Mediterranean tax haven. He insists he is not retiring, and that he will continue to be the figurehead of Property118.
His new business plan, for the portal, “caters for selling to both investors and owner occupiers, utilising the exposure of Rightmove and Zoopla . . . without any cost implications to vendors or their agents (no commission payable)”.
The revised business plan describes Mark Alexander as “a world renowned property blogger”.
It says he plans to emigrate to a Mediterranean tax have “in the near future in order to avoid paying CGT [Capital Gains Tax] on the sale of his own property portfolio, which he needs to do in order to complete a financial settlement from his divorce”.
The property portal deals in sales of tenanted rental homes.
The plan insists: “Vendors and their agents will …. be offered a zero cost, zero commission opportunity to have their properties marketed on other major portals including Rightmove and Zoopla.”
Where this option is selected, prospective purchasers can bid for property in an eBay online auction, with a conditional exchange at the fall of the e-hammer.
The whole bidding process is handed by Auction House UK, which has links with a number of estate agents.
The business plan says: “We anticipate letting agents to use the Property118 model as an aid for business retention and future growth.”
It goes on: “Agents will also be able to charge their existing landlord clients commission for managing sales, without the ongoing cost of membership fees to Rightmove and Zoopla”.
Premium listings are to cost £11.80 per week, and the business plan assumes that 20% of advertisers will upgrade.
The business plan also has an exit strategy, with a trade sale planned within three to five years.
It says: “History has proven that the established portals are more likely to acquire successful niche portals than to build their own service providers.”
Other possible purchasers could be utility and insurance companies.
Those who downloaded the new business plan this weekend received an email saying: “If you are planning to buy some shares in Property118 Portal Ltd I really think you ought to be quick. Since I published the revised business plan on Sunday 16th August well over 200 people have downloaded it. There are now very few shares left for sale. How might you feel when you see our TV advertisement if you have missed out on the opportunity to become a shareholder? Perhaps more to the point, how would you feel if in three to five years time you read that we’ve sold out to an investment group for 10’s of millions?
“I think the giant leap forward we have made recently that has really inspired our investors has been the announcement of our intention to offer advertisers the ability to make their properties appealing to both landlords and owner-occupiers. You will recall from the revised business plan that we will soon be offering an option to include advertising on Rightmove and Zoopla at no extra cost, and without having to pay any agency fees when properties are sold, because we don’t charge them. This functionality should come online within the next few weeks.
“The new business model is also appealing to letting agents because it gives them an opportunity to help their clients who have decided to sell, as well as attracting new lettings and management clients in the form of enquiries from potential purchasers. Perhaps the extra commission they could charge to their clients for this service has also crossed their minds?”
Other portals specialising in the listing of private rental properties and which are already up and running are:
“It says he plans to emigrate to a Mediterranean tax have “in the near future in order to avoid paying CGT [Capital Gains Tax] on the sale of his own property portfolio, which he needs to do in order to complete a financial settlement from his divorce”.”
That is all
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I’d be worried about investing in a company where the principles are not aware that since April 2015 non-residents have to pay capital gains tax on their UK property holdings although the base costs is taken from April, any reliefs prior to that date are lost.
Also, the company valuation for an investor is today’s value – not what it might be at some time in the future. The portal has has no trading history and you only have to listen to Peter Jones and other TV Dragons to draw an opinion on that…
I have looked at the figures and assumptions and I’m out for those reasons.
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I’ve not looked into this offering, and I’ll not be investing, but I know Mark Alexander and he’s a very switched on businessman.
He was behind The Money Centre and his property blog is a great vehicle for bringing issues to landlord attentions and fighting campaigns.
Recently he was able to use to to bring a class action against the West Bromwich for changing their interest rate terms.
I think the investment portal is a great idea.
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