Online estate agent EstatesDirect has gone back for a second round of crowdfunding, aiming to raise £1.25m.
Last year it raised £660,000 in just ten days using the same platform, Crowdcube, smashing through its initial target of £250,000.
With 41 days to go in its current fund-raising campaign, the business – headed by ex-Poundland founder Steve Smith as chairman – by yesterday afternoon had raised £886,730. A total of 144 investors have so far chipped in, with one investing £150,000.
Reaching target will earn the investors a 5% equity stake in the company which says that in February it achieved a record performance, breaking its target for instructions by 43%.
Yesterday, EstatesDirect had 150 properties available for sale and 17 for rent across the country.
Among the homes for sale is Smith’s own house, now listed at £5.7m – reduced from the £6.5m price when the property originally went on the market in November.
EstatesDirect is planning to use its new funding for expansion of its offering.
It began this year with 25 staff, but over the next three years plans to recruit a further 80, resulting in the establishment of 100 territories across the UK.
All will complete a training programme said to be created by three specialists in estate agency, technology and franchising.
Smith said: “EstatesDirect.com especially appealed to me because it is not just another online estate agency.
“We have a number of franchised businesses, licensees and employed local agents, who provide the expertise and personalised service of a high street estate agent, which we know is still very important to customers when buying, selling or letting their property.”
EstatesDirect is not the only property business to utilise crowdfunding.
Currently on Crowdcube is Letting Supermarket, which plans to raise £250,000, and Property TV, which will create a television channel solely devoted to property and which has passed its target of £200,000.
Last year, easyProperty, before it had even launched, sailed through its own target of £1m on Crowdcube, raising £1.4m from 392 investors.
Comments (32)
I can’t say a lot as it has all been said. The only real way to describe investors in this firm is MUGS!
Sorry, also meant to mention about their free online valuation……It offers the free online valuation and then states “after our local property expert will ring to give you an ACCURATE valuation”…….Amazing
Their offering, as all have observed, is totally out of order. I cannot understand, for the life of me, why our so called professional bodies haven’t employed someone to report all these illegal agency offerings to the ASA to protect their industry members. Alternatively, we all have a day off from posting here and each report our allocated company to the asa. These, and many others are breaking some serious rules…..yet it seems to be going un-checked!
AHHHH…. just sussed it! Took some doing.
Simply move the slider to the left. THERE’S yer “from £295” as advertised.
Pity, though, that the also highlighted “£1 upfront” on the goes up a smidge though – by a factor of 294x, to be exact…
Only three words properly sum up –
THIS IS WRONG
You would think that in the least they could get the offer right and see what the comp are up to. Anyone who wants to do it themselves can do so far more competitively through other means!
So the £495 basic package does not include the following which I would say should be as standard and provided by most agents;
2D Floor Plan£50
Accompanied Viewings and Feedback£200
For Sale Board (Standard)£75
Property Particular Production£50
Professional Photography (12 shots)£225
Sales Progression & Negotiation Booster£125
Add all the extras and that comes to £725 then throw in the £495 + George Osbournes cut and your looking at the best part of £1,500.00 before you’ve even printed a brochure!
An agent up north told me LSL agents charge £500 for photographs.
WHO’S photographs?, woodentop – that’s the question…
Robin – you’re absolutely right. Any local estate agent shop has at least this number of properties for sale/rent. This business model doesn’t stack up – no wonder the founders don’t want to back it with their own money. i’d be very worried if i’d invested here!
“Last year it raised £660,000 in just ten days using the same platform, Crowdcube, smashing through its initial target of £250,000.”
I wonder if those crowd-funders are actually seeing something for their “investment”…
Indeed, what did they do with the £660k other then pay recruitment fees and staff wages for 25 people? This is just madness!
Yes PeeBee they are seeing RED.
If I am reading that correctly, 150 properties for sale, 17 for rent, with 25 STAFF!!! I could manage that amount of stock on my own! What the h3ll are they doing all day long? These figures surely cannot be interpreted as an investment opportunity? What on earth is the person who invested £150K thinking of? Maybe it is a tax ‘efficiency’ thing? Also – if £1.25M is worth 5% of the company, does that mean they think its worth £25M in total. This is all bonkers.
If you can manage all that on your own i want you working for me!!!
But yes seems a tad excessive, still they are probably out on the streets drumming up more fund like those charity muggers “Chuggers”
Hi SP. Yes, well, probably I was a little over ambitious there – I might need someone to help in the office while I was out doing all those viewings and management visits……oh hang on, they dont do viewings or management visits. So they spend all day making appointments I suppose, and listing new instructions of course. In that case 25 people would be worked off their feet.
As a High Street Agent I see first hand the value that we deliver as Local Agents… responding to the odd prospective client looking for cheap fees I detail what we actually do and then say can I offer you a cheap service then and strip out half my services… and the response being of course they want all my service and expertise for a cheap fee… some I win over and they get what value we bring, others want the proverbial cheap as chips bag!… so, there is a customer base for these kid on online estate agencies who are really property listers in which case I think their fees are quite expensive? Roll-up Roll-up… welcome to the virtual world of jow to make money… and then walk away!
I posted this ‘somewhere else’ – so I’m going to post it here also ‘cos I know it’ll get a response…
Somebody care to look at the pricing structure on their site – https://www.estatesdirect.com/selling-packages/ – then click through to choose the packages, and then tell me exactly which Laws, Regulations and Rules are being smashed to pieces by this company, please?
Alternatively, tell me that “from” is a perfectly suitable disclaimer when it appears that there is NO “from”…
Well as a starter for 10……where is the VAT!?!
And actually how does that work then? as you point out PeeBee “from £295” the basic package is £495?!
In fact none of them are available at the advertised “From Price”!!!
Getting warm, RA…
…then warmer…
…and then you REALLY feel the heat!
Anyone know someone in ASA, Trading Standards – or maybe a producer on Jackanory would be more apt…?
Having now had a brief look at the terms and conditions, it seems that they are only giving you 7 days cooling off period instead of the statutory 14, it is only mentioned once and nowhere for the client to action this…. but on the bright side they are informing clients they are bound by the Property Misdescriptions Act 1991!?!…ho hum perhaps they need to employ an estate agent at some stage!
Property Misdescriptions Act 1991 was repealed, doesn’t exist anymore.
I know Woodentop, I was being sarcastic!
Trevor Mealham is your man for most contacts like that Peebee
Do these crowd-sourcing things have to comply with any money laundering checks? Seems an easy way to launder money – “oh it’s all gone up the spout on salaries and R&D, honest guv…”
Funny thing, this bloke made millions flogging tat to the country’s chavs and is as I recall is quite bolshie about what a sure thing it is and all the normal ‘disrupting’ blithering yet like all these budget jobbies despite having a ‘former boss of (insert company name here) and touching their customers up for cash up front they don’t seem keen to put their own cash into these things, never seem to make any money amd keep taping up these poor crowd funding people.
looks like the only way to make money in this budget thing is to get Z list sleb business name to not put their own money in and Nick a few quid off hopelessly optimistic ‘investors’ – Jonnie
The telling comment as ever with these things is: “breaking its target for instructions by 43%” No mention of breaking any records for actually selling property and you’ll never see any records for actually percentage of property to listings sold!! As the compares, moneysupertmarkets etc are being investigated for not offering their clients the best deal so firms like this will be investigated for taking money from sellers without explaining fully the reduced opportunity to sell and even greater, the chance of dramatically underselling.
The funniest thing about this? For about 1/10th of the money being poured into this one venture of this micro niche end of the industry I can operate a system that brings such transparency to the industry Mr Smith will view his investment in the sector in much the same way as those who by a Ralgex Oyster from a bloke in the services on the M6, slightly embarrassed.
The term “sub-prime equity” comes to mind.
Just thinking when I had around 900 properties in 2011 I could have maybe achieved over £1 billion in crowd funding for 1% of the company.