Game-Changer in the Property Crowdfunding Space?

By AltFi on 12th May 2014

Equity Crowdfunding

A newly launched equity crowdfunding platform – Property Moose – will allow individuals to invest in real estate for as little as £500.

Game-Changer in the Property Crowdfunding Space?

As seems to be the case with an increasing number of platforms, Property Moose raised money via Crowdcube earlier this year. The new equity platform smashed a £60,000 target with 104 investors uniting to raise £169,010 for 16.9% equity in just 11 days. The largest individual portion of that amount was a £50,000 contribution.

Property Moose operates within the FCA's new crowdfunding rules and already has its first few properties listed online. The platform claims to simplify the property investment process. Property Moose will take a skin-in-the-game approach – participating in each investment alongside the “crowd”. Once a property is fully funded, that property is then acquired via a limited company and shares are issued to all participants in the fundraise. Voting rights are assigned to every share, with investment terms expected to sit between 2 and 5 years. Shares may be sold or transferred via the Property Moose platform.

Property lending has already emerged as a popular sub-sector of peer-to-peer lending – championed by LendInvest, Wellesley & Co., Assetz Capital and a number of smaller platforms. Can Property Moose elevate equity crowdfunding for property to such heights?

We caught up with Andrew Gardiner, Co-Founder of Property Moose, for his thoughts on the launch:

What makes Property Moose unique? 

The property crowdfunding space is still very new and we are one of only a small handful of operators in the market. By providing such a low entry point into property investment, we hope that we can give more people access to the potential opportunities that property investment offers.

Property Moose is a regulated platform – what do you think of the FCA’s regulatory regime and how important is it for platforms to be regulated?

Property Moose is an appointed representative of Sapia Partners LLP who are authorised and regulated by the FCA and we work very closely with Sapia to ensure compliance with the FCA's rules. This, for us, is very important for two main reasons. Firstly, it helps to build confidence in what is a very new market for consumers and secondly, the FCA rules are there to help protect consumers so regulation helps to reduce the risk of unscrupulous platforms reflecting badly on the others.

If I were an investor looking to get involved in property, why equity over debt?

The returns. Debt investments will provide a fixed level of return (the interest rate). Our equity investments allow investors to share in all of the returns on offer (including rent and capital) pro rata to their percentage investment. Of course, this also means that equity investors share the risks. But, as we hand pick all of our investments in house and complete full due diligence (which includes a RICS valuation on the vast majority of properties), we believe that investing in a Property Moose property carries potentially less risk than lending a third party developer money over a peer-2-peer platform.    

You must have been delighted about the Crowdcube raise, why do you think you met with such success? 

I think there is a clear market for property crowdfunding as the public love property! Property Moose has been built on transparency and I think the Crowdcube members saw this as a great selling point for the platform.

What will the funds be used for? 

The funds will be used for working capital and to help grow the business. We are already working on a second iteration of the platform and we are really excited about it as there are going to be some amazing features.

Tell us about the equity crowdfunding for property space at the moment, and how Property Moose fits into it.

Equity crowdfunding is obviously a very hot topic at the moment and is something that we are very passionate about. Platforms that take investment decisions away from large institutions and put them back into the hands of individuals are fantastic. Property Moose fits in as it does exactly that. There is no need to go to the bank with large deposits if you want to invest in property. Select a property from our platform, get together with the crowd, cut out the bank and build a diversified portfolio without putting all your eggs in one basket.

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Companies in this Article:

LendInvest
Crowdcube
Assetz Capital
Property Moose