60 second start-up: The House Crowd

0-5 seconds: Sum your business up in a sentence:

The House Crowd (THC) was the world’s first company to bring the power of crowd funding to residential property investment, allowing people to invest, alongside others, anything from £1,000 upwards in traditional housing stock. 

5-10 seconds: What's the business model?

We charge five per cent of all monies raised via the platform and take a 25 per cent share of profits from rental income and the proceeds of the sale of the properties. We offer two investment models; profit share and high income.

10-15 seconds: Who are your competitors?

We are way ahead of other property crowd funding platforms so I regard other companies in the general peer to peer crowd funding space such as CrowdCube, Zopa, and Funding Circle are our main competitors. They are all much bigger than us at present but they are the ones we want to catch up and be compared with. 

15-20 seconds: What's your USP?

We were a world first. We democratised the once elitist property market and much of what THC has done since it began trading remains unique. 

It is different because it offers investors the ability to invest small sums and receive much higher returns than traditional investments whilst having the underlying security of bricks and mortar. The British public love to invest in property… and now they can - from just £1000.

20-25 seconds: How have you funded it so far?

Seed capital of £85,000 was received from clients in an existing investment business to fund THC’s launch.

In April this year, we raised £465,000 from 52 of our own customers in just two days to fund the company’s expansion. 

25-30 seconds: What were you doing before?

I was a music industry lawyer. I started investing in property myself and then helping others to do.  As a result, I started The Armchair Property Investor, to help amateur property investors. In three years, it helped investors buy over £40m worth of investment property.  

In 2006, it was named Best Start Up by EN Magazine. In 2007, Braemar Group Plc bought Armchair for £2.25M. 

Frazer Fearnhead

30-35 seconds: Where did the idea come from?

The economic crash hit me hard and the death of the property market caused Braemar to close Armchair. 

The fallibility of big institutions and their role in the crash led me to realise people need to take control of their financial security. The phenomenon of ‘crowd funding’ was credited with helping to regenerate the economy and I wondered if the same principles could be applied to property investment.

35-40 seconds: What's the smartest thing you've done so far? 

Realising I couldn’t sacrifice my life for the sake of a big paycheck and needed to stop being a lawyer. It has been tough at times but I knew I could never be happy working for someone else. With respect to the House Crowd, persevering with the original idea when all around me said crowd funding would not work for property investment. For six months, I researched the law, looked at what companies like Crowdcube and Funding Circle were doing and eventually convinced a law firm that it could be done, provided the company operated within certain strict parameters. They agreed and THC was born.

40-45 seconds: What's the stupidest?

Apart from downing half a pint of tequila in one gulp (now that was really stupid), it would be trusting the wrong people. I expect people to be honest and do what they say. I really can’t understand why they don’t. Reputation is critical and it seems so self-defeating to lie and cheat. Luckily, my wife and business partner keep a close eye on the people I deal with now and I listen to their advice. 

45-50 seconds: If your business was a biscuit, what would it be?

A Breakaway as we ‘break away’ from the traditional way of doing things. We have a bright and colourful image with a good substantial core that delivers what you expect. (Okay that’s all a little tenuous… but what do you expect?)

50-55 seconds: Which idea are you a bit jealous of?

The world wide web. It has utterly revolutionised the way we live, learn, interact and do business. It has created infinite possibilities for individuals to better themselves and increase their wealth. Clearly it has the capacity to be abused as well but it is an over-whelmingly positive invention. Congratulations Sir Tim Berners-Lee.

55-60 seconds: Where are you going to be in 12 months' time? 

Hopefully branching out to international markets and diversifying the property portfolio that people can invest in through THC. Some investors have already expressed interest in hotels, office blocks, student accommodation and even speculative development sites so where there is interest, there is opportunity.

To find out more about The House Crowd, check out their website. You can also like them on Facebook or follow them on Twitter.

Catch up with our previous 60 Second Start-Up: Woto

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