We recently connected with Roxana Mohammadian-Molina, the Chief Strategy Officer at Blend Network, an online peer to peer (P2P) property lending platform. Roxana talked about how the UK real estate market is performing.
She also discussed how her company has managed to maintain operations during these challenging times while also being able to help Blend Network investors make decent returns on their investments. Our discussion is shared below.
Crowdfund Insider: How can you invest in peer to peer (P2P) property lending with smaller amounts, like somewhere around 10,000 pounds?
Roxana Mohammadian-Molina: Peer-to-peer (P2P) property lending is a very accessible way to start investing in property. It is a tool that allows anyone to invest in property-secured loans. In our case, anyone can invest from as little as £1,000.
P2P property lending originally emerged as a way to democratize investing because it allows a wide range of investors, high net worth investors, family offices, institutional investors and retail investors, to all co-invest in property-secured loans. So, effectively it allows people who only have a few thousand Pounds available to invest along with very sophisticated investors in a syndicated loan.
P2P property lending is also a very easy and convenient way to invest. For example, in our case, lenders simply have to register at www.blendnetwork.com with their name and surname, provide a proof of ID and once they are onboarded, they can start investing. In order to invest, investors can simply pick and choose the loans they want to invest in and invest any amount they want from a minimum of £1,000 and multiples of that amount.
So, in summary, P2P property lending provides an easy, convenient and affordable way to invest in property. It is property investment, but without the headaches and from the comfort of your sofa.
Crowdfund Insider: How has your business been doing lately? How were the investments on your platform performing in September and during this current month of October 2020?
Roxana Mohammadian-Molina: Blend Network has record months in terms of lending volume over the past few months. For example, in September we listed and funded two loans; the first one was a 9% return p.a. 20-months maturity loan funded in 57 minutes by 121 contributors, and the second one was a 10% return p.a. 16-months maturity loan funded in 20 minutes by 96 contributors.
Generally, we have seen a large increase in the number of investors over the past few months amid the equity market volatility. Also, interest rates on cash deposits are close to zero and investors are effectively being penalized by holding cash at the bank. So, what is there not to like about property-secured investments that return 8-12% p.a.?
Crowdfund Insider: How is peer to peer democratizing investments?
Roxana Mohammadian-Molina: P2P property lending allows a wide range of investors, high net worth investors, family offices, institutional investors and retail investors, to all co-invest in property-secured loans. So, effectively it allows people who only have a few thousand pounds available to invest along with very sophisticated investors in a syndicated loan.
Crowdfund Insider: How is the real estate market doing in the UK right now? And how does this impact your business?
Roxana Mohammadian-Molina: Following a short-lived dip during the first lockdown in April and May, UK property prices have rallied, which I believe is due to a number of factors not least the stamp duty holiday. However, in recent weeks we have seen a slowdown in the trend seen over the summer. That said, the market remains strong in certain areas and for certain types of properties, especially the market for more affordable homes and first-time buyers.
Crowdfund Insider: What would be the typical profile of an investor who takes part in offers on your platform? What is the typical profile of the average borrower who may regularly use the Blend Network to acquire loans?
Roxana Mohammadian-Molina: We have a very diverse investors base, having a mix of high net worth investors, family offices, institutional investors and retail investors. Our retail investors invest an average of £10,000 while our larger investors invest hundreds of thousands of pounds.
So, while it is hard to give you a typical investor profile, what I would say is that we have very diverse investor profiles and that anyone can be an investor with Blend Network. We are also very proud to have a large number of female investors who are interested in the fixed returns and property-security of P2P property lending.
We also have many Millennials and young professionals who are tech-savvy and time-poor and love the convenience of investing through our user-friendly platform.
Crowdfund Insider: How have you managed to maintain such an enviable track record? In general, what are some of the strategies you have used to achieve this?
Roxana Mohammadian-Molina: We are very proud of our track record and this is really one of the keys to our success and how an increasing number of investors are beginning to trust us with their investments.
I would say that the key to achieving such a track record has been the high quality of the due diligence we do on the property-secured loans we list on our platform. Our main job is in fact doing a strong and solid due diligence on each and every loan. We have a highly experienced team of property experts who carry out a detailed due diligence on every single project.
To demonstrate we strongly believe in the quality of the loans we list, we have ‘skin in the game’ and regularly lend our own money on the loans listed on the platform. At the end of the day, it is about doing the right thing and I believe if one does things right, the reputation builds on itself and trust is created.
For us, it is all about having satisfied investors that are pleased not only with the returns on their investment but also with the customer service they are getting. We have 100% 5-star Trustpilot reviews from our happy investors and their comments speak for themselves. So, to sum up, due diligence on every loan is the key behind our track-record.