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Post by Ace on May 19, 2022 13:43:38 GMT
Supported housing is the latest seasons fashion, as conventional BTL is full of problems and yields are looking poor, supported housing leaving it up to a housing association to deal with the fuss is hot topic. Like everything in property, there are waves and trends, supported housing is just the next. I'd say investing in supported housing has been around for some time but up until now you'd choose a stock market listed real estate investment trust that invests in supported housing and pays a regular dividend out of the rent. The new thing that Assetz Exchange is offering is direct investment (strictly speaking via a loan to a property holding company for each property purchased) so you get monthly income and exposure to increases / decreases in property prices (in place of exposure to rises / falls in the share price of a REIT). I've found their webinars very good for getting my head round exactly how this investment works, there are a couple more of these coming up next Wednesday for anyone interested. Don't forget that any increase in property value is capped at 3% per annum.
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eeyore
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Post by eeyore on May 19, 2022 14:35:45 GMT
I'd say investing in supported housing has been around for some time but up until now you'd choose a stock market listed real estate investment trust that invests in supported housing and pays a regular dividend out of the rent. The new thing that Assetz Exchange is offering is direct investment (strictly speaking via a loan to a property holding company for each property purchased) so you get monthly income and exposure to increases / decreases in property prices (in place of exposure to rises / falls in the share price of a REIT). I've found their webinars very good for getting my head round exactly how this investment works, there are a couple more of these coming up next Wednesday for anyone interested. Don't forget that any increase in property value is capped at 3% per annum. Here's the text from the 'Help Pages' on the web-site: " If investors vote to sell a property, all proceeds less costs and taxes (including any capital gain below a 3% p.a. cap) will be distributed to investors. This cap is an initial requirement of Assetz Exchange’s authorisation by the FCA; we have been in regular communication with our legal advisors who anticipate being able to raise or remove the cap entirely." I don't know how old this anticipation of the legal advisors is - I wonder if BenAssetzExchange, if he's reading this thread, could check the position?
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Post by Ace on May 19, 2022 14:45:28 GMT
Don't forget that any increase in property value is capped at 3% per annum. Here's the text from the 'Help Pages' on the web-site: " If investors vote to sell a property, all proceeds less costs and taxes (including any capital gain below a 3% p.a. cap) will be distributed to investors. This cap is an initial requirement of Assetz Exchange’s authorisation by the FCA; we have been in regular communication with our legal advisors who anticipate being able to raise or remove the cap entirely." I don't know how old this anticipation of the legal advisors is - I wonder if BenAssetzExchange , if he's reading this thread, could check the position? I recall a 5% cap being mentioned a couple of years back, so looks like it's going the wrong way.
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Post by BenAssetzExchange on May 19, 2022 14:48:57 GMT
Don't forget that any increase in property value is capped at 3% per annum. Here's the text from the 'Help Pages' on the web-site: " If investors vote to sell a property, all proceeds less costs and taxes (including any capital gain below a 3% p.a. cap) will be distributed to investors. This cap is an initial requirement of Assetz Exchange’s authorisation by the FCA; we have been in regular communication with our legal advisors who anticipate being able to raise or remove the cap entirely." I don't know how old this anticipation of the legal advisors is - I wonder if BenAssetzExchange , if he's reading this thread, could check the position? Hi, Yes this remains the position. Unfortunately, the key advisor working on this got covid quite badly and it's impacted the timeline. We do feel that 5-6% net yield, inflation linked plus up to 3% capital growth a year is quite a competitive return given we are not lending any money to third parties. Also, bear in mind, we are now setting up these investments with the intention of them being very long term. Many of the people housed are housed indefinitely, we expect leases to be rolled. If circumstances do change we are hopeful the charity/housing association would house someone else in the property or we find another organisation to take it on.
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eeyore
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Post by eeyore on May 19, 2022 15:17:33 GMT
Here's the text from the 'Help Pages' on the web-site: " If investors vote to sell a property, all proceeds less costs and taxes (including any capital gain below a 3% p.a. cap) will be distributed to investors. This cap is an initial requirement of Assetz Exchange’s authorisation by the FCA; we have been in regular communication with our legal advisors who anticipate being able to raise or remove the cap entirely." I don't know how old this anticipation of the legal advisors is - I wonder if BenAssetzExchange , if he's reading this thread, could check the position? Yes this remains the position. Unfortunately, the key advisor working on this got covid quite badly and it's impacted the timeline. We do feel that 5-6% net yield, inflation linked plus up to 3% capital growth a year is quite a competitive return given we are not lending any money to third parties. Also, bear in mind, we are now setting up these investments with the intention of them being very long term. Many of the people housed are housed indefinitely, we expect leases to be rolled. If circumstances do change we are hopeful the charity/housing association would house someone else in the property or we find another organisation to take it on. Thanks for the rapid response. I'm interpreting the answer as: "It'll stay at 3% pa for the foreseeable future"! That's no problem for me as my investment decisions have been based on the yield and not the expectation of any capital gain (rather the likelyhood of any capital loss which seems endemic in so much of the P2P world). From my understanding of AssetzExchange loan offerings most (all?) have LTVs in excess of 100% - achieving a net capital gain in excess of 3%pa against that headwind might be regarded as optimistic. Out of curiosity, if an investment were to achieve a net capital gain greater than 3%pa, who gets the surplus?
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Post by BenAssetzExchange on May 19, 2022 15:59:23 GMT
Yes this remains the position. Unfortunately, the key advisor working on this got covid quite badly and it's impacted the timeline. We do feel that 5-6% net yield, inflation linked plus up to 3% capital growth a year is quite a competitive return given we are not lending any money to third parties. Also, bear in mind, we are now setting up these investments with the intention of them being very long term. Many of the people housed are housed indefinitely, we expect leases to be rolled. If circumstances do change we are hopeful the charity/housing association would house someone else in the property or we find another organisation to take it on. Thanks for the rapid response. I'm interpreting the answer as: "It'll stay at 3% pa for the foreseeable future"! That's no problem for me as my investment decisions have been based on the yield and not the expectation of any capital gain (rather the likelyhood of any capital loss which seems endemic in so much of the P2P world). From my understanding of AssetzExchange loan offerings most (all?) have LTVs in excess of 100% - achieving a net capital gain in excess of 3%pa against that headwind might be regarded as optimistic. Out of curiosity, if an investment were to achieve a net capital gain greater than 3%pa, who gets the surplus? The position is we are optimistic we can get it changed but we are delaying approaching the FCA as we have a couple of other small tweaks we are looking at making so we would rather not approach them multiple times. The issue is getting advice on these things is taking significantly longer than expected. Lawyers seem to be as busy as estate agents these days. The LTV's on our loans are not comparable to a typical P2P loan P2P as we are not lending to a third party. Investors lend to a stand alone company that is set up to purchase the property and the lenders themselves have control over all major decisions as prescribed by the companies articles of association. We are trying to mirror property ownership as closely as possible through a P2P loan structure. Given prices in some areas moved up 20% in around a year an annualised gain of 3% is not completely unrealistic but of course there is no guarantee prices will always rise. In the event investors voted to sell a property that realised an annualised capital gain in excess of 3% then the excess would be paid into a discretionary provision fund that we could use if ever a property was sold at a loss. So far this has not happened.
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zuluwarrior
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chap from Newcastle, dabbling here and there. Long-time lurker of the forums
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Post by zuluwarrior on May 19, 2022 16:43:17 GMT
Ok so now we are talking about supported housing, can I ask how the pipeline of deals is delivered? Triple Point and Civitas are the big players in this space and many registered providers have relationships where one of the funds covers the purchase and retains ownership.
The benefit to supported housing is the security provided by the lease which then means a lower yield so I'm not sure how this model lines up with p2p to get a decent return
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ilmoro
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Post by ilmoro on May 19, 2022 16:45:38 GMT
Thanks for the rapid response. I'm interpreting the answer as: "It'll stay at 3% pa for the foreseeable future"! That's no problem for me as my investment decisions have been based on the yield and not the expectation of any capital gain (rather the likelyhood of any capital loss which seems endemic in so much of the P2P world). From my understanding of AssetzExchange loan offerings most (all?) have LTVs in excess of 100% - achieving a net capital gain in excess of 3%pa against that headwind might be regarded as optimistic. Out of curiosity, if an investment were to achieve a net capital gain greater than 3%pa, who gets the surplus? In the event investors voted to sell a property that realised an annualised capital gain in excess of 3% then the excess would be paid into a discretionary provision fund that we could use if ever a property was sold at a loss. So far this has not happened. Is that actually true? The first exited property #109 seems to have incurred a loss, certainly on my account, and it was sold below the RICS valuation. Unfortunately, most of the details have gone to zero or are not available (loan contracts etc) so it is difficult to establish the exact position. It is also missing from Past Investments or somewhere else where investors can see finished projects if they werent a participant.
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Post by BenAssetzExchange on May 19, 2022 17:27:24 GMT
Ok so now we are talking about supported housing, can I ask how the pipeline of deals is delivered? Triple Point and Civitas are the big players in this space and many registered providers have relationships where one of the funds covers the purchase and retains ownership. The benefit to supported housing is the security provided by the lease which then means a lower yield so I'm not sure how this model lines up with p2p to get a decent return We have built relationships with a number of Registered Providers in this sector, you can see our partners here. What we do is set up a stand alone company (or SPV) and then use it to buy the property with the loan from investors. So we have the security of the property itself and the lease we put in place with the provider.
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Post by BenAssetzExchange on May 19, 2022 17:35:24 GMT
In the event investors voted to sell a property that realised an annualised capital gain in excess of 3% then the excess would be paid into a discretionary provision fund that we could use if ever a property was sold at a loss. So far this has not happened. Is that actually true? The first exited property #109 seems to have incurred a loss, certainly on my account, and it was sold below the RICS valuation. Unfortunately, most of the details have gone to zero or are not available (loan contracts etc) so it is difficult to establish the exact position. It is also missing from Past Investments or somewhere else where investors can see finished projects if they werent a participant. The property you refer to was sold at the same price we originally bought it for. I am unsure what price you paid for it on our Exchange (which is a variable market so prices go up and down). Investors voted to sell the property instead of let it out in the middle of the Covid pandemic in 2020. It is true that even though he property was sold for the purchase price, things like stamp duty, legal fees, AE's fee were not recovered. Given no property has been sold in excess of the 3% annual cap there was nothing in the provision fund currently to allow us to make any distributions. The property is visible in Past Investments, the link to the property itself is here. The loan contracts and all documents that were ever posted on the loan are included along with all votes and updates. If you are having difficulty seeing any of this please contact the Helpdesk and I will investigate this for you.
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ilmoro
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Post by ilmoro on May 19, 2022 18:19:04 GMT
Can anyone else see this property under the past investments tab? Even applying filters which I sometimes have to do to get the site to wake up gives nothing. If you click on link provided by Ben are there any numbers that arent zero (not the no buy price bug as its the same with sell price)? Contracts are there, I was looking for the purchase & cost breakdown but I think that was the original site Ace |
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Post by Ace on May 19, 2022 18:31:23 GMT
Can anyone else see this property under the past investments tab? Even applying filters which I sometimes have to do to get the site to wake up gives nothing. If you click on link provided by Ben are there any numbers that arent zero (not the no buy price bug as its the same with sell price)? Contracts are there, I was looking for the purchase & cost breakdown but I think that was the original site Ace I can access it through Reports->Summary->109
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on May 19, 2022 18:53:10 GMT
Can anyone else see this property under the past investments tab? Even applying filters which I sometimes have to do to get the site to wake up gives nothing. If you click on link provided by Ben are there any numbers that arent zero (not the no buy price bug as its the same with sell price)? Contracts are there, I was looking for the purchase & cost breakdown but I think that was the original site Ace I can access it through Reports->Summary->109 Yeah, that's how I can see it, as that's your loans but you should be able to see it through exchange>past investments.
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Post by BenAssetzExchange on May 19, 2022 19:41:18 GMT
I can access it through Reports->Summary->109 Yeah, that's how I can see it, as that's your loans but you should be able to see it through exchange>past investments. I will look into this, it should be visible on the past investment page. The buy and sell prices will be zero now as there is no market. I agree the purchase price should be visible, I will investigate it and get it fixed. The FCC by design disappears when the property is sold, we are not looking to hide anything I will revisit this view and make sure the information is displayed clearly.
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Post by capricorn on May 19, 2022 21:13:16 GMT
Can anyone else see this property under the past investments tab? Even applying filters which I sometimes have to do to get the site to wake up gives nothing. If you click on link provided by Ben are there any numbers that arent zero (not the no buy price bug as its the same with sell price)? Contracts are there, I was looking for the purchase & cost breakdown but I think that was the original site Ace Visible to me under past investments tab (I wasn't invested in it) but as you say the original purchase price and FCC are showing as zero in the banner headline. Looking at the 'Income, Expenses and Contingency Breakdown' (still all there) the opening amount was £195,957 which could represent a net purchase price of £180,000 + £15,957 FCC. Then looking at the updates the sale price was definitely £180,000. So bought for less than RICS (which was £195,000 but £185,000 for a quick sale) and sold for the same price. Of course it's gross prices that matter in this case so investors must have lost the FCC costs paid on acquisition plus paid agent's & solicitor's fees (£3K) out of the sale price adding to the loss. I'm not sure this is much different from anyone buying a house and selling it 2 years later when house prices may not have moved up enough to recoup the costs of buying and selling. (On the other hand the HPI, still showing, is +25%). Maybe the investors at the time would have done better to vote to rent it out and sell at a later date - hindsight! Worth noting that the current sale going through for #118 (also a previous show home) will give a capital gain for those who invested at the purchase price with the proviso of the 3% per annum cap others have pointed out.
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