Crowd-sourced property investment firm raises £2m

A CROWD-funding backed residential property investment company says it has raised more than £2m and acquired more than 30 houses since its launch 18 months ago.

The House Crowd, based in Altincham, is the brainchild of former lawyer turned entrepreneur Frazer Fearnhead. It sets up special purpose vehicles to buy houses – usually repossessed or run-down properties in north Manchester, Salford and other surrounding areas – which it then refurbishes and rents out, offering the investors a rate of return of between 6% to 7.5% a year.

With interest rates at historic lows, and investors able to put in as little as £1,000, The House Crowd is seeing strong demand and has more than 400 individual investors.

It has acquired 31 properties in the last 18 months and has placed offers on a further two houses.

Mr Fearnhead, who founded The Armchair Property Investor in 2005 before selling it to Braemar Group in 2007 said: “I am very pleased with the progress that The House Crowd has made.  The company is growing steadily, which is especially pleasing when you consider investors had no reference point before for a company like this.

“We are happy they have seen the validity of this as an investment vehicle, and to be repaying their trust in us. It is a testament to what we do that many of our investors are now investing in every project we do and bringing in friends and family.

Although not regulated, Mr Fearnhead says The House Crowd operates in a transparent fashion, and does not handle clients’ money – investors pay the solicitors handling their property purchase.

“I accept what we offer won’t be to everyone’s liking, but we couldn’t offer the returns we do if we were regulated. I believe we offer a safe and transparent investment.”

The House Crowd earns its income by taking a percentage of the rental income and it will also be paid 50% of the net profit after the property is sold. It takes a £4,000 upfront fee per property to cover costs including refurbishments, and this will be deducted from its net profit upon sale.