THE FOUNDERS of wound-down peer-to-peer lender Lovefruitful are launching a new business this month, enabling people to invest in residential property developments.
Rather than P2P, the new business is itself the property developer. Retail investors can back the projects – alongside leverage from banks – and earn annual returns of 30 per cent.
The company, named Fruitful, does not charge any annual or upfront fees. On completion of a project, it receives 25 per cent of the net profits, with the other 75 per cent going to the investors.
Its homes are developed using a modular system in a controlled factory environment, meaning they are constructed in under four weeks.
“This means we’re able to accurately project investor returns and deliver our projects on time and on budget,” said a spokesperson via email.
The minimum investment is £1,000 and people can choose their own projects or use the auto-invest function.
Lovefruitful closed its P2P mortgage platform to new investors in November 2015, which is said was because the business model “wasn’t sustainable to scale”.
It has returned 82 per cent of investor capital and is working with the remaining borrowers to return the last 18 per cent by the second quarter of 2017.