Property118 Share Issues -- Merged Thread With Portal

[Neverwhere]

Lets see how many of the Property118 crowd have actually caught on to the full implications of the budget

Property118 Portal Ltd shares on sale NOW!

Mark Alexander - Published on 13/07/2015
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I am delighted to report that shares in Property118 Portal Ltd are now available for you to purchase.

You may need to be quick because we have had over 200 expressions of interest and there are only £150,000 of shares available for sale.

The minimum amount of investment is £10 but an ideal scenario for us would be around 30 investors buying an average £5,000 worth of shares. It’s obviously up to you how much you decide to invest once you have reviewed our pitch, however the more investors we get the more incentivised ambassadors we will have.

One investor has verbally committed to invest £25,000 based on our track record to date so we will obviously be delighted to see that investment showing on the pitch campaign as soon as possible, it will give our campaign a really great start.

It has taken us a lot longer than we first anticipated to get to this stage but we wanted to make sure the portal was fully operational and bug free before we commenced fund-raising for our TV marketing campaign. The wait is finally over, I hope you will feel it has been worthwhile.

Before you are able to purchase shares you will need to self-certify that you are a sophisticated investor or complete a short test to comply with FCA regulations. This is because Crowd Funded investments into start-up businesses are notoriously risky (two out of three fail within two years) and you could lose every penny of your investment if things don’t go to plan.

To review our pitch please CLICK HERE

I need to make it clear that investing into Property118 Portal Ltd will not make you an owner of Property118.com. The details of the relationship between the two are documented in this legal agreement. In layman’s terms (especially for property people) I hope the following will help.

A business called Innovative Landlords Solutions began building Property118.com in 2011 with the intention of it eventually becoming a shopping mall for landlords as well as a useful resource tool. Each of the retailers in that mall would be tenants and pay rent (in the form of sponsorships). Alternatively, the founders of Property118.com would own shares in their businesses. That money (along with donations of course) is used to fund the running of the website, the news feeds, salaries, and specialist advice. It is vital to all members that we preserve the integrity of the website as a whole.

LettingSupermarket.com is one of the retailers we own shares in and as you may be aware they recently completed their own Crowd Funding and are doing very well. Property118 Portal Ltd is another retailer, the difference being that the founders of Property118 (myself, Neil Patterson etc.) are the shareholders and you could be too.

The portal is the anchor tenant so naturally it gets the prime location, the home page of Property118.com, and it doesn’t have to pay any rent either. We think that’s only fair given the amount of our personal time and money that we’ve pumped into Property118.com – we hope you will agree. It is 10% of the shares in the retailer known as Property118 Portal Ltd that are available to invest into, NOT Property118.com or Innovative Landlord Solutions LLP.

To see our pitch on the crowd funding platform please CLICK HERE

If you would like to receive a copy of our full business plan and projections please feel free to email mark@property118.com

All the best

Mark Alexander – co-founder of Property118.com

[Neverwhere]

Mark's projections seem very optimistic:

The following snapshot of our projections should be read in line with our business plan and detailed projections (available on request) together with the crowd funding pitch linked below.

We are raising funds by selling 10% of the shares in Property118 Portal Limited via the Seedrs crowd funding platform.

The minimum amount of investment is £10 but an ideal scenario for us would be around 30 investors buying an average £5,000 worth of shares. We are only releasing £150,000 worth of shares. This will provide seed funding for a national TV advertising campaign.

http://www.property118.com/property118-portal-ltd/76429/

Edited July 15, 2015 by Neverwhere

[Exiled Canadian]

I note that the year 1 bank balance plus the EBITDA loss in year 1 is very close to the £150k he is trying to raise.

Is it possible that Mr Alexander isn't actually investing any of his own cash into this little venture, and instead hoping to leverage off the money of others with his 90% equity stake?

[Neverwhere]

I note that the year 1 bank balance plus the EBITDA loss in year 1 is very close to the £150k he is trying to raise.

Is it possible that Mr Alexander isn't actually investing any of his own cash into this little venture, and instead hoping to leverage off the money of others with his 90% equity stake?

It looks very likely, doesn't it? Although I gather the stake will in face be his wife's.

Still, nothing to lose, eh Mark?

[giesahoose]

I posted this on another thread but thought it should go in here too

I have to hand it to the property 118 guy, he is never shy to try and start a new enterprise

http://www.property1...andlords/76476/

2k for advise on how to restructure your portfolio in his new consultancy practice.

Quote

I would continue personally to be responsible for the letting and the income, maintenance, insurance etc, as the landlord, but as opposed to paying interest, I would be paying rent to the head lessee (NewCo). I would be liable to pay tax on any profit I make personally, but guess what, I doubt there will be any!

All I need to do now is to persuade a few commercial lenders to consider this structure (and perhaps a few of the more commercial BTL mortgage lenders) and to negotiate decent terms. I suspect they are as worried about the Budget announcements as most portfolio landlords are (default possibilities), so I suspect they might be a lot easier for me to convince than some people might imagine, especially due to my commercial finance broking background and all of my contacts in the NACFB, both member brokers and lander patrons.

This structure is likely to be most attractive to landlords with high levels of borrowing (e.g. over £1 million)

Have I cracked the problem for established portfolio landlords like me, those of us who will be worst affected by this budget?

I will be sharing the results of my investigations with my Consultancy clients, including ………

1) details of all lenders who are willing to consider this structure, and

2) copies of the documentation I use to put such an arrangement into place

[spyguy]

Mark's projections seem very optimistic:

http://www.property118.com/property118-portal-ltd/76429/

I thought you'd cut that from a larger, more detailed plan. I was wrong.

'The portal is the anchor tenant in our virtual shopping mall'

????

Obviously there's a bit of detail missing (????) but what sort of business turnover goes 300k -> 1.9m ... 4.2M in 5 years?All the extra turnover dropping right to the bottom line.

And he wants to sell 10%!!! Id be keeping it.

https://www.seedrs.com/property118-portal-ltd

'Product(s) and/or service(s)

A property portal for buy-to-let landlords and their agents.

Buyers search the property portal by postcode or town and simultaneously set up email alerts so they are notified when a property matching their purchasing criteria is listed.

Consider how much money buyers and sellers of tenanted property could save in terms of rental voids and agents fees as a result of buying and selling with reliable tenants in situ.

Have you ever come across a tenant who is happy to be served notice because their landlord wanted to sell? What if they don't have to leave?

Basic advertisements are FREE for both landlords and agents to create.

Premium listings feature at the top of search results.

Sponsorship of a featured property Newsletter is available to agents and developers on an ex-gratia, meritocratic basis, i.e. sponsors who make the largest payment per enquiry receive preferential placement of advertisements.'

What could possibly go wrong.

Erm how about an inbalance in the number of BTL buyers + sellers?

How does it different from rightmove?

I can just go on righmove and do the same.

[pipllman]

so the founder and idea maker has a business that he thinks will make £11.5m profit in five years

but isn't prepared to put up £150k to get it rolling

hmmm

As with all start ups, I wish those involved every success

[porca misèria]

I note that the year 1 bank balance plus the EBITDA loss in year 1 is very close to the £150k he is trying to raise.

Is it possible that Mr Alexander isn't actually investing any of his own cash into this little venture, and instead hoping to leverage off the money of others with his 90% equity stake?

The £150k is simply dictated by SEIS rules: it's the maximum funds you can raise with SEIS tax breaks. Most SEIS-qualifying fundraisings at seedrs are for smaller amounts, sometimes as little as £20k.

The rest of the numbers may or may not have been made up based on that limit.

[porca misèria]

so the founder and idea maker has a business that he thinks will make £11.5m profit in five years

but isn't prepared to put up £150k to get it rolling

There are other reasons to go for crowdfunding. Consumer-facing businesses may do it as a marketing exercise: give your crowdfunding shareholders a good deal and some perks, and they become an enthusiastic and loyal customer base and tell all their friends how great you are.

Do you think that could work for a marketplace in tenanted properties?

(and how much would Zoopla or Rightmove pay to buy him out if he really makes a success of it?)

[pipllman]

well he has £20k pledged so far

some people like it

[happy_renting]

Most LL's selling are because they cannot make money.

More about finding a bigger fool.

I think the term nowadays is 'F2F'

[Neverwhere]

I posted this on another thread but thought it should go in here too

I have to hand it to the property 118 guy, he is never shy to try and start a new enterprise

http://www.property1...andlords/76476/

2k for advise on how to restructure your portfolio in his new consultancy practice.

Did you clock that the crowd funding was to pay for his own insured advice, but that the funders would still need to go out and pay for their own insured advice anyway? Why pay that much for details that would surely be readily availble simply by skipping Mark and going straight to the professionals involved after they've devised a scheme, given the funders would still have to pay them either way. I doubt said professionals will be holding back those details from their other clients just so that Mark can earn an additional buck.

[Neverwhere]

I note that the year 1 bank balance plus the EBITDA loss in year 1 is very close to the £150k he is trying to raise.

Is it possible that Mr Alexander isn't actually investing any of his own cash into this little venture, and instead hoping to leverage off the money of others with his 90% equity stake?

Mark Alexander 16/07/2015 at 09:24

Three questions were raised on another forum which I think are worthy of commenting on here.

The first question was how much I am investing. The answer to that is that nearly £1 million has been invested into Property118.com over the past four and a half years, not including my time (around 10 hours a day on average). Without that, Property118 Portal Ltd would not exist.

The other question was why would we want to sell shares if the business is projected to be so successful. Why not simply put the extra money in and keep all the shares to ourselves? The answer to that one is that we want to demonstrate that our target markets will buy into the concept. Also, we know that if our target market have invested their own hard earned cash into the business they are more likely to promote it to their peers on the basis they benefit directly from results.

The third question was regarding Directors income. We have capped this at a total of £5,000 pcm between all four Directors or 5% of income, whichever is greater. This provides an incentive to the Directors to focus on achieving meaningful results for the shareholders, which of course includes the Directors too.

Please feel free to post more questions, we will not be offended I promise you.

[spyguy]

'The answer to that is that nearly £1 million has been invested into Property118.com over the past four and a half years, not including my time (around 10 hours a day on average). Without that, Property118 Portal Ltd would not exist.'

Hmm, on what precisely?

[Exiled Canadian]

'The answer to that is that nearly £1 million has been invested into Property118.com over the past four and a half years, not including my time (around 10 hours a day on average). Without that, Property118 Portal Ltd would not exist.'

Hmm, on what precisely?

Also - he's not actually offering investors a piece of Property118.com, instead he's offering them shares in Property118 Portal Limited - a completely different company. I suspect that it would be impossible to sell the Portal business independently to the website. If this were the case then the value would probably all sit in the website business (that owns the domain name) and in which as an investor in the Portal business I won't have any stake.

Thanks Mark, but I'm out.

[pipllman]

meanwhile, over on propertytribes, they have cottoned on to the same idea, but are nowhere near as cute at trying to monetise it

Post #264 and #265

http://www.propertytribes.com/summer-emergency-budget-2015-landlord-and-property-perspective-t-127621205-27.html

[Neverwhere]

meanwhile, over on propertytribes, they have cottoned on to the same idea, but are nowhere near as cute at trying to monetise it

Post #264 and #265

http://www.propertytribes.com/summer-emergency-budget-2015-landlord-and-property-perspective-t-127621205-27.html

Bit late in the day isn't? At least Mr & Mrs Alexander came up with the idea prior to Mr Osborne lighting a slow-burning fire under the buy-to-let sector.

[Neverwhere]

Mark Alexander 17/07/2015 at 11:17

Reply to the comment left by “Mark Shine” at “16/07/2015 – 21:00“:

Hello Mark and welcome to Property118

I’m sure one of the accountants here will relish the opportunity to complete the number crunching exercise you have set, if only to prove they can.

It’s interesting that you found your way here via the HPC forum, I suspect many others have too.

I made a decision a few weeks ago not to post there any more but to continue lurking. I don’t mind people who share different opinions but when they get personally abusive that’s where I draw the line I’m afraid.

Nevertheless, it’s better to be talked about than not – it’s called being “remarkable” LOL

You mean like this Mark?

Nope just choosing to ignore the crap you are spouting, I have a life outside of HPC you see, I could debate each point with you from now until the end of time but I have better things to be getting on with, like keeping my tenants and my bankers happy.

http://www.housepricecrash.co.uk/forum/index.php?/topic/204246-dedicated-landlord-property-portal/?p=1102707293

[Bland Unsight]

You mean like this Mark?

Did anyone else notice that he expresses his interest in keeping his tenants and his bankers happy, but he misses the chance to mention his intention to look after any investors in his companies, or indeed any fellow landlords?

I am sure that he has their best interests at heart and thus the omission is just a result of his decision to attend to a particular context when addressing a particular point.

Given the potential threat to the solvency of a leveraged portfolio landlord like Mr Alexander from the tax changes in the Summer Budget it is sadly inevitable that some cynics will speculate that perhaps Mr Alexander is not focussed solely on his investors. This is plainly totally unjustified - as always a lack of evidence is not an evidence of lack.

Personally I wish Mr Alexander the best of luck with his venture, £5k pcm for his services is clearly excellent value. I commend you all to fill your boots.

(I haven't seen many other investment offers where the Directors' remuneration is expressed in terms of "per calendar month", but I recognise the virtue of talking to your potential investors in commercial language that is accessible to them, given their sophistication.)

[Neverwhere]

Property118 needs your help please

We would like to see Property118 advertised on National TV and we’re hoping you will want to help.

We have launched a crowd funding campaign, the minimum investment is just £10.

You will get a 50% tax credit/rebate on any amount you commit, plus CGT benefits under SEIS rules.

You will also get shares in our new property portal so it’s an investment opportunity too.

If you would like to see Property118 grow and be exposed to a lot more landlords via TV advertising please get involved. Sharing this article via Social Media will help too.

CLICK HERE for more details and to see how the fund raising is coming along.

Here’s a summary of our financial forecasts for the new property portal, which will be held in a new company.

To request a copy of our full business plan and projections please email mark@property118.com

More SEIS tax perks

For investors who realised capital gains during the 2013-14 tax year, SEIS reliefs allow you claim up to:

• 78% of your investment back if the startup succeeds – and you pay no CGT when you sell your shares; or
• 100.5% of your investment back if the startup fails – allowing you to invest in startups with the potential of full downside protection.

If you realised capital gains during the 2014-15 tax year, SEIS and related reliefs allow you claim up to:

• 64% of your investment back if the startup succeeds – and you pay no CGT when you sell your shares; or
• 86.5% of your investment back if the startup fails – significantly reducing any losses you incur when investing in startups.

Edited July 19, 2015 by Neverwhere

[Neverwhere]

Anon 18/07/2015 at 11:27

What impact do you think the budget announcements regarding landlord tax will have on your plans?

Mark Alexander 18/07/2015 at 11:52

Reply to the comment left by “Anon ” at “18/07/2015 – 11:27“:

Good question!

As a highly geared landlord I am campaigning for that particular budget announcement to be altered or withdrawn The consequences could be devastating for the economy, not just landlords.

If the new taxation plans are implemented without amendment it will certainly disrupt the property market. From the perspective of a property portal, disruption of the property market is no bad thing because it results in a higher number of property transactions.

I suspect around 50% of landlords would need to sell and that a new breed of corporate landlords will buy. Also, I expect the new grey market (pensioners using saving or liberated pension funds) to buy for cash or with the benefit of 50% gearing through equity finance. The latter isn’t treated as a finance cost (the shared appreciation is treated by HMRC as capital) and will suit the grey market requirements of cashflow due to there being no monthly payments of capital or interest associated with this type of funding. Both of these types of landlords are more likely to buy property with established tenants than to buy with vacant possession.

[Exiled Canadian]

As a highly geared landlord I am campaigning for that particular budget announcement to be altered or withdrawn The consequences could be devastating for the economy, not just landlords.

If the new taxation plans are implemented without amendment it will certainly disrupt the property market. From the perspective of a property portal, disruption of the property market is no bad thing because it results in a higher number of property transactions.

I suspect around 50% of landlords would need to sell and that a new breed of corporate landlords will buy. Also, I expect the new grey market (pensioners using saving or liberated pension funds) to buy for cash or with the benefit of 50% gearing through equity finance. The latter isn’t treated as a finance cost (the shared appreciation is treated by HMRC as capital) and will suit the grey market requirements of cashflow due to there being no monthly payments of capital or interest associated with this type of funding. Both of these types of landlords are more likely to buy property with established tenants than to buy with vacant possession.

He just can't conceive that the price of property will probably fall and that first time buyers are likely to be the main beneficiaries of the sell-off.

As for his suggestion that the consequences could be "devastating for the economy" - I don't think so!

[Bland Unsight]

Looking at his track record, if I was a BTL morourn entertaining the ludicrous fantasy that the government might be about to row back on these measures, then I'd take Mark Alexander's involvement as an indicator that the enterprise was doomed. In fact I'd be begging him to not get involved.

I don't think we should rule out the possibility that before Mark Alexander got involved the Treasury were going to assume that they'd already done enough, but as a result of his intervention they'll now offer G4S a multi-million pound contract to send out goons to deliver to every BTL investor with more that three properties a swift kick in the @rse before attaching to their ankle a small black box that alternates between delivering a powerful electric shock and playing a clip of George Osborne saying "Sell now, sell everything" and leaving them with a letter that explains they can have the box removed once they've off-loaded their portfolio.

Fun times.

[Neverwhere]

He just can't conceive that the price of property will probably fall and that first time buyers are likely to be the main beneficiaries of the sell-off.

As for his suggestion that the consequences could be "devastating for the economy" - I don't think so!

It's bizarre on both counts.

Firstly there's the general tenants-are-a-lesser-kind-of-human-being landlord delusion of failing to realise that renters could ever become home owners, or could even harbour such desires. Prospective owner occupiers are obviously not going to be buying properties with sitting tenants unless they are the sitting tenants. Equally corporate landlords are unlikely to want to buy up individual, disparate, secondhand properties in a piecemeal manner. They are much more likely to take advantage of the new Right to Build scheme if they decide that they want to get into the sector, and they are only likely to do that once land and property prices have fallen back to provide a reasonable yield.

Secondly the notion that buy-to-let landlords spend more into the economy than owner occupiers is just odd. BTLers often do the bare minimum maintance, hence they spend less on associated home improvement and home maintenance industries then owner occupiers who take pride in their own homes, especially when said owner occupiers have been able to buy them at reasonable income multiples and therefore have the cash available to take that pride. If the BTLers didn't extract part of their tenants wages in the form of rents then that money won't cease to exist: their former tenants will simply spend it into the economy themselves.

[Bland Unsight]

A tangential matter - I'd be crushed with shame if I put out a document soliciting investment and my projections were a screen-grab from excel with the green triangles flagging the inconsistent formulae from the error checking clearly visible. Just saying.