The House Crowd, who developed their unique online investment model by matching residential property purchase to shared investment, have now raised more than £2m from investors. This represents a significant coup for a company who created an entirely new way of investing in property accessible to small investors.
Launched as a website www.thehousecrowd.com in 2012, The House Crowd delivers returns from property with less investment capital than conventionally required for property investing.
This ability to invest as little as £1000 and gain greater returns than most savings accounts and pensions has been central to take-up among investors.
The focus on cash flow rather than speculating on capital growth has seen the company
concentrate on purchasing traditional housing stock in areas of high rental demand in Manchester. In the last 18 months, 31 properties have been purchased, predominantly two bed terraces, and currently the company has placed offers on a further two houses.
Frazer Fearnhead, founder of the company, said:
“I am very pleased with the progress so far. The company is growing steadily, which is especially pleasing when you consider investors had no reference point before for a company like this.
We are happy they have seen the validity of this as an investment vehicle, and to be repaying their trust in us. It is a testament to what we do that many of our investors are now investing in every project we do and bringing in friends and family.
The only problem is that we are now getting oversubscribed very quickly for each project, and are sometimes having to return people’s money. But as problems go, it’s a good one to have.”
The House Crowd offer two pathways to potential investors.
A profit share model which pays 6% a year plus a 50% profit share when the property is eventually sold, or a straight 7.5% a year.
Potential investors join the House Crowd website's investor group and can then invest from as little as £1000 with a minimum term of 18 months.
When they choose to commit, all fees are taken care of by the company along with the refurbishment of the investment properties, making this a completely passive property investment. The flow of cash generated for investment and time taken for refurbishments is currently accelerating in line with increased demand
“We generally need around £63,000 to purchase and refurbish a property,” said Mr Fearnhead.
“It used to take us 10-14 days to raise that amount each time, but now it is taking under a week. In fact, the last project took just four hours to raise £70,000. It’s quicker than filling in a mortgage application.”
