PROPERTY investment network Sourced has entered the peer-to-peer lending sector and plans to launch an Innovative Finance ISA (IFISA) by the start of 2019.
The Cheshire-based firm connects individuals with property investment opportunities and also operates a franchise model, for people who want to set up their own property investment business.
It started working with P2P lenders such as Lendy and The House Crowd towards the end of 2017 before officially launching its own P2P business in July 2018.
“It’s been going really well so far,” said Stephen Moss, managing director of Sourced. “We’ve been registering more than 30 investors a day who are looking for P2P investments. And we have a very healthy pipeline of property investments. It’s hit the ground running.”
Sourced focuses on loans backed by UK properties with a maximum of 70 per cent loan-to-value. Expected returns are estimated at between eight and 12 per cent, depending on the property. An IFISA launch has been mooted for early 2019.
Moss told Peer2Peer Finance News that he decided to launch the P2P business after realising that there was an opportunity in the market for a new platform with a strong deal flow and experience in the property market.
“We knew the sector and we are investors ourselves as well,” he said. “We discovered there were a couple of hurdles in the sector, particularly for platforms – one hurdle was having a regular flow of good property investment opportunities, and the other was having a steady community of investors.
“It’s typically quite expensive to get investors to invest in platforms but from our experience in the property sector we saw an opportunity to do this differently.”
Sourced offers an online training platform and property deal search engine for investors, who can then lend to properties via the website, with a minimum investment of £250.
Its franchise package costs £9,999, which includes bespoke software, training, property leads and an investor database.
“We have a unique due diligence model,” said Moss. “Our franchisees are all trained to do due diligence, and then each deal comes through to head office where we do our own due diligence, and then it goes to the board.
“We have had no defaults so far, and a lot of that is down to the fact that we have a really good mix of property experience and finance experience within our team. With our property experience, if there is any problem we’re able to step in and solve it.”
Sourced has also built the functionality to offer cryptocurrency sales via the website and intends to roll this out at the beginning of 2019.
Read more: Navigating through the P2P property maze