Property investment options - mortgage, cashbuy, crowdfnding? which?

edgex

ileven1225 wrote: »

1. My current way - apply 80% LTV mortgage buy to let, either 2 or 5 years, rent the property out to provide me monthly income. If the property price increased, i would sell it for some capital gain income or i can keep it for even longer term hoping it will increase more.

Note: There are some pros and cons using ltd company, however, this is not part of the question. The above 3 ways can apply to both personal and ltd company.

I take it you've not noticed S24?

ileven1225

Anyone else can share their experience and opinions?

csgohan4

ileven1225 wrote: »

Anyone else can share their experience and opinions?

depends on your level risk, everyone is different. Investment also comes risks for the options you have outlined

ileven1225

recently found two crowdfunding platforms, sourced.co and housecrowd. I have discussed with sourced.co and their reply is following:


Take a look at these statistics for HouseCrowd https://www.thehousecrowd.com/p2p-info-and-stats.

Sourced Capital have 100% repayment rate.

One of the big differences you must know when investing with us is with regards to who the ‘borrowers’ are. Sourced have various arms to the business. One of these is that Sourced have franchised the sourcing side of our business. Our franchisees source investment opportunities/projects and once they have completed our due diligence and risk assessment processes – we launch these projects on to the Sourced Capital platform. Due to this, the only people that we ‘borrow’ to are our franchisees. These people are experienced property investors and/or developers, people that we have trained, worked with and know their capabilities.
This one of the ways in which we mitigate the risks involved with investing in Sourced Capital.


It sounds like sourced.co so far more successful than housecrowd, however, it can mean sourced.co hasn't completed as many projects as housecrowd.



Any opinions?

tom9980

Why would experienced investors and developers share their profit with anyone surely they would just find a way to finance and take all the profit? Frankly their isn't much profit in developing property on a small scale, which is why most large developers build shoe boxes on tiny plots.

davidmcn

ileven1225 wrote: »

the only people that we ‘borrow’ to are our franchisees.

Any opinions?

I wouldn't trust my money with people who don't even understand the difference between "lend" and "borrow".

ileven1225

tom9980 wrote: »

Why would experienced investors and developers share their profit with anyone surely they would just find a way to finance and take all the profit? Frankly their isn't much profit in developing property on a small scale, which is why most large developers build shoe boxes on tiny plots.

it confused me as well, if they can finance it, surely they will go ahead. The reason probably is because the risk is high and no one would finance it for them, or the claimed profit is higher than true value. They have to use crowd funding way.



I can only guess but crowd funding does make profits nowadays, similar to peer 2 peer

buggy_boy

The only "cash buy" bargain you might get is with a non-mortgagable property. Otherwise even buying with a mortgage you are still seen as a cash buyer, you don't have anything to sell... The only advantage of cash buying is you don't have to have all the searches required by mortgage company although its only in a small instance of situations that you would not want those searches anyway.

Personally I would not touch crowd funding with a barge pole. That company seems dodgy as anything, they brag about their "off market" property finding network, there is no such thing apart from in a scam on new properties where developers will offer them to them only for a very short time but they will not be any sort of bargain. Think about it, if you have a house to sell are you going to put it on the market to get the widest possible pool of buyers or go "off market" relying on one buyer.

80% LTV mortgages are more of a struggle to make profitable and any new laws and taxes will not be in landlords favor. So my advice would be buy with say 50% LTV so you can weather any storm..

MobileSaver

ileven1225 wrote: »

I can only guess but crowd funding does make profits nowadays, similar to peer 2 peer

UK regulators have been warning about crowdfunding property deals for years:

FCA issues warning about crowd funded property projects

tom9980

ileven1225 wrote: »

it confused me as well, if they can finance it, surely they will go ahead. The reason probably is because the risk is high and no one would finance it for them, or the claimed profit is higher than true value. They have to use crowd funding way.



I can only guess but crowd funding does make profits nowadays, similar to peer 2 peer

It remains to be seen how well P2P lending will do during a recession.

You know those scams where investors are told they will get 8% returns on their cash investment? they tend to pay for a year or two then try and get the investor to invest more or recommend them to their friends, they then go bust leaving the investor out of pocket by 80% of their initial investment.

I am amazed you cannot see these investments are no different.