CrowdLords, a new twist on real estate crowdfunding that targets landlords or “buy to let”, is crowdfunding their platform on Seedrs. The startup is seeking a raise of £90,000 and launched yesterday quickly garnering over £27,000 from 29 investors.
— CrowdLords (@CrowdLordsLtd) October 29, 2014
CrowdLords is not the first crowdfunding platform to raise capital crowdfunding but it is not only capital that is at stake. CrowdLords will also be able to gauge interest for their concept of allowing anyone to become a part-time landlord while the managing landlords will be able to skip the bank. Both Landlords and Investors may benefit from this property platform. For Landlords you get to avoid all the associated paperwork and duress of dealing with a bank and go straight to the crowd. The crowd will select which projects (and landlords) get funded based on merit. CrowdLords has a sample model of a possible outcome for qualifying landlords. The total return on investment generating a solid net annualized return. But then of course the landlord will be managing the property.
Individuals may participate for a reasonable amount of a £1000 minimum. For the CrowdLords investors you benefit by receiving rental income shared by all participants. After an established investment term has been completed the investor gains on the capital appreciation as the property is sold. The LandLord is committed to sell the property – or alternatively they can refinance – but either way the investor may choose to get out.
CrowdLords states that all accepted Landlords will be fully vetted and must invest a certain amount in the project themselves. Each individual project would be held in a special purpose vehicle (SPV) split between the landlord and investors.
The real estate market in the UK has been booming. Meanwhile interest rates for savers are at an historical low. More and more consumers are seeking alternatives to holding savings in banks and shifting to P2P platforms and real estate. CrowdLords is another opportunity for passive income from diverse properties.
The startup was co-founded by Bethan Jenkins and Richard Bush. Bethan has been a part time landlord for years and saw an opportunity to scale with crowdfunding – leveraging her experience for what she had learned to be a good source of income.
CrowdLords has decided they could help people avoid making mistakes by sharing their own experiences and also enabling others to share theirs. By pooling their local knowledge with the wisdom of the crowd they hope to create a new paradigm for landlords and property finance.
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