An online property business is using a crowdfunding platform to raise money for its new property portal.
Property118 is aiming for £150,000 in exchange for 10% equity.
The pre-money valuation is £1,350,000, says Seedrs.
The venture has already attracted 60 investors, who have given £113,350 so far.
Mark Alexander manages Property118 and has updated the business plan for the portal, stating that it will accept agent and private listings.
A private landlord, Alexander plans to sell his property portfolio and home and emigrate to a Mediterranean tax haven. He claims that he is not retiring and that he will still be the head of Property118.
The new business plan “caters for selling to both investors and owner-occupiers, utilising the exposure of Rightmove and Zoopla… without any cost implications to vendors or their agents (no commission payable).”
Crowdfunding Mission for New Property Portal
The plan also calls Alexander “a world renowned property blogger.”
It states that he plans to emigrate “in the near future in order to avoid paying CGT [Capital Gains Tax] on the sale of his own property portfolio, which he needs to do in order to complete a financial settlement from his divorce.”
The portal will deal in sales of tenanted rental properties.
The plan continues: “Vendors and their agents will be offered a zero cost, zero commission opportunity to have their properties marketed on other major portals, including Rightmove and Zoopla.”
If this option is selected, buyers can bid for a property in an online auction.
The bidding process will be managed by Auction House UK, which has links to several estate agents.
The business plan reads: “We anticipate letting agents to use the Property118 model as an aid for business retention and future growth.
“Agents will also be able to charge their existing landlord clients commission for managing sales, without the ongoing cost of membership fees to Rightmove and Zoopla.”
Premium listings will cost £11.80 per week and the business plan expects 20% of advertisers to upgrade.
The plan also has an exit strategy, with a trade sale planned within three to five years.
It states: “History has proven that the established portals are more likely to acquire successful niche portals than to build their own service providers.”1
Other potential purchasers could be utility and insurance firms.
Those that downloaded the new business plan received an email reading: “If you are planning to buy some shares in Property118 Portal Ltd I really think you ought to be quick.
“Since I published the revised business plan on Sunday 16th August well over 200 people have downloaded it. There are now very few shares left for sale. How might you feel when you see our TV advertisement if you have missed out on the opportunity to become a shareholder? Perhaps more to the point, how would you feel if in three to five years time you read that we’ve sold out to an investment group for 10s of millions?
“I think the giant leap forward we have made recently that has really inspired our investors has been the announcement of our intention to offer advertisers the ability to make their properties appealing to both landlords and owner-occupiers.
“You will recall from the revised business plan that we will soon be offering an option to include advertising on Rightmove and Zoopla at no extra cost, and without having to pay any agency fees when properties are sold, because we don’t charge them. This functionality should come online within the next few weeks.
“The new business model is also appealing to letting agents because it gives them an opportunity to help their clients who have decided to sell, as well as attracting new lettings and management clients in the form of enquiries from potential purchasers. Perhaps the extra commission they could charge to their clients for this service has also crossed their minds?”1