ds187
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Post by ds187 on Mar 15, 2021 19:21:11 GMT
From The House Crowd Developments site: housecrowd-developments.com/the-house-crowd/The House Crowd
As widely reported, peer to peer investment platform, the House Crowd, was placed into administration on Wednesday 24th February 2021. House Crowd Developments and its associated development projects (SPV’s) are separate entities to the House Crowd. These companies are not in administration. The House Crowd was a major funding stream for House Crowd Developments and the administration process is expected to cause a short temporary delay to construction until funding is approved for release to assist with the completion of the remaining projects delivered for the platform. All projects are classed as assets by the House Crowd administrators. House Crowd Developments continues to be owned and operated by Frazer Fearnhead and Justin Molloy. Frazer co-founded the House Crowd in 2012. In December 2019, he stepped back from day to day operations of the House Crowd and appointed a new Chief Operating Officer to run the House Crowd so he could focus on the development businesses. It’s all very confusing to me and not sure how to interpret the above post they’ve made. It suggests the developments and SPVs are all doing hunky dory yet they’ve defaulted on all of the loans? Can’t tell if the above is positive or not - obviously things would be worse if they were in administration also?
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Post by superowls1 on Mar 19, 2021 9:35:23 GMT
HCD are still arranging viewings of the show home for HCD19 on their Facebook page, so they must think they can get them finished and sold.
Would be nice if we could get an update on each of the projects like they used to before administration regarding the number of reservations/sales etc.
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mancman
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Post by mancman on Mar 19, 2021 19:34:48 GMT
Viewings might be happening, but there are no works being carried out on any of the sites. Who would reserve, purchase something that is not moving forward or in administration.
Smoke and mirrors.
Administrators hold all the money. Any funds that do come in will go to them.
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Post by lostsheep on Mar 26, 2021 12:49:34 GMT
I talked to the administrators as unfortunately, I am a considered a significant investor  It doesn't sounds like its a complete disaster, taken them a few week while to getting independent valuations of each investment - values on selling as is, finishing developments etc. HCPs (SVP rentals) will likely all be sold at market. and likely all get all their equity back +/- whatever the market has done. No real drama there. Again, just takes time. There are ~60 rental SVPs. HCDs (Developments), estimates should get 80-90% back, and likely more - but its development dependant, some will get interest still. Much more financially sensible to finish the builds then to sell as is. Few are under funded (due to no more fund raising rounds) so will have to go to external funding to finish the developments, others have cash sitting in account to finish. It will just take time. I don't have exposure to the personal loans, I never liked the concept. So cant really comment. Of note, the administrators are going to have a detailed investment by investment plan laid out for investors to see. It will have time frames, values, short falls, expected returns, general accurate status etc. So we will know what each portfolio will look like. other interesting points...about 3,700 investors, ~60 GBP million from those investors So, end of the day - not horrid - and this is why it was quite a decent investment concept upfront - losses should be limited due to the nature of it being asset backed. Sounds like it was a bit mismanaged and there was some bleeding of funds between entities etc, also didnt get the cash flow it was expecting from the SVP rentals on capital gains, etc so House Crowd just ran out of cash really. There doesnt seem to be some massive black hole of funds or anything, House crowd doesnt have big creditors etc |
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Post by superowls1 on Mar 26, 2021 14:00:11 GMT
Thanks lostsheep, that is very positive (in the grand scheme of things) news.
It looks like I am a very average investor with those numbers, but heavily invested in the HCD after most of the HCP's i was invested in were sold 1-2 years ago.
Did they mention if work had already been restarted on some of the HCD projects? There were a vast majority of some developments that were just waiting for conveyancing to complete with some developments due to pay back fully in March / April (obviously, I don't expect these dates to be met now).
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Post by littlereec on Mar 26, 2021 15:10:29 GMT
That you Lostsheep for taking time to writeup your call
I am having a better Friday now - thank you again
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Post by superowls1 on Mar 26, 2021 16:34:15 GMT
Email update:
Dear investor,
We write to provide you with an update on the administration of The House Crowd Limited (“THC”) and associated companies (House Crowd Finance Limited, House Crowd Finance (Security Agent) Limited and House Crowd Property Management Limited).
House Crowd Developments (Investors that have lent to development projects)
In particular, we would like to set out the issues we are currently facing as regards various development projects promoted to investors by THC prior to our appointment, and currently residing in individual special purpose vehicle (“SPV”) limited companies under the House Crowd Development (“HCD”) brand (i.e. HCD 1, 2, 3 etc.).
These HCD SPVs are not in administration and remain under the management control of individual HCD directors. However, we have established that all bank accounts utilised by the HCD SPVs were in the name of THC and therefore, as administrators of THC, we were duty bound to take control of them and establish which parties could legitimately lay claim to the credit balances (totaling c.£1.1m across c.20 bank accounts). We are seeking legal advice on who is entitled to these funds.
It should be noted that very little is held in respect of “live projects”, with the exception of one SPV, so there is very little impact on projects as a result of this current delay.
As soon as we have received legal advice as to how we can treat the above mentioned funds we will update you accordingly. We will also provide investors with an update on the developments once we have confirmed a route map to maximise returns from these projects
Furthermore, going forward we intend to start providing you with frequent updates on a development by development basis of key project milestones / performance indicators and associated timelines.
Finally, we would like to confirm that each individual investor in a given development has lent directly to the various HCD SPV borrowers. Therefore, in the event of a capital shortfall a loss would be borne by individual investors.
House Crowd bridging loans (Investors that have lent to a borrower via a bridging loan)
We are taking pro-active steps to pursue all borrowers for repayment of their defaulted loans. Where the commencement of formal enforcement and repossession proceedings is the best strategy to maximise recoveries for investors, we will do so.
House Crowd Properties (Equity investors in rental property owning SPVs)
On appointment, we took control of c.170 bank accounts utilised by various House Crowd Property (“HCP”) SPVs but again under the name of THC. Similar to the position with the HCD SPVs, we are seeking legal advice as to who is entitled to the funds in these bank accounts.
At present, the rental properties within these HCP SPVs continue to be managed by their individual director for the benefit of equity investors.
We trust that this update is useful. Should you have any questions please continue to contact the Joint Administrators by emailing thehousecrowd@quantuma.com
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Post by lingocogit on Mar 28, 2021 0:32:21 GMT
No need to worry about total loss. That's great. However, I think better to expect about 15% max loss as a rule of thumb. This is because of 2 things:
1) The process takes years. You lose out on inflation.
2) The costs of the liquidation itself are expensive.
This has happened to me 3 times now and I'm beginning to get annoyed by myself for managing to pick losing propositions like this.
In the case of THC I chose it because I figured it's secured and even if THC goes bust, I'll be alright. While that's true, the reality that will play out won't be perfect.
I'm just asking myself 'Would I do it again?'
Can anyone tell me how my shares are related to THC?
Can anyone tell me how the whole thing can be structured better in the future?
The shares in the properties should be more independent from THC. If designing this scheme in the future, how would you set things up so that when THC goes bust, share owners of the Houses simply keep or sell their shares on the open market?
IMHO, this is a kind of test case for p2p.
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sussexpeer
Member of DD Central
If you don't make a plan, you'll end up where you're headed.
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Post by sussexpeer on Mar 28, 2021 8:04:21 GMT
This has happened to me 3 times now and I'm beginning to get annoyed by myself for managing to pick losing propositions like this.
Erm, would you care to advise us which other platforms you're currently invested in, lingocogit?  2 years ago I had about 7% of my p2p investments in HC, and I quickly got increasingly nervous at the numerous reports of development delays. A year ago I got most of my money + 7% interest out when my 1-year Autolends matured in Apr 2020. So now I'm stuck in 1 HC bridge and 1 development, and I expect them to lose much of their value whilst the administrators and time erode my piles. HC is my first platform fail in over two years of p2p investing, so should I consider myself "lucky"?
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Greenwood2
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Post by Greenwood2 on Mar 28, 2021 17:37:58 GMT
I talked to the administrators as unfortunately, I am a considered a significant investor It doesn't sounds like its a complete disaster, taken them a few week while to getting independent valuations of each investment - values on selling as is, finishing developments etc. HCPs (SVP rentals) will likely all be sold at market. and likely all get all their equity back +/- whatever the market has done. No real drama there. Again, just takes time. There are ~60 rental SVPs. HCDs (Developments), estimates should get 80-90% back, and likely more - but its development dependant, some will get interest still. Much more financially sensible to finish the builds then to sell as is. Few are under funded (due to no more fund raising rounds) so will have to go to external funding to finish the developments, others have cash sitting in account to finish. It will just take time. I don't have exposure to the personal loans, I never liked the concept. So cant really comment. Of note, the administrators are going to have a detailed investment by investment plan laid out for investors to see. It will have time frames, values, short falls, expected returns, general accurate status etc. So we will know what each portfolio will look like. other interesting points...about 3,700 investors, ~60 GBP million from those investors So, end of the day - not horrid - and this is why it was quite a decent investment concept upfront - losses should be limited due to the nature of it being asset backed. Sounds like it was a bit mismanaged and there was some bleeding of funds between entities etc, also didnt get the cash flow it was expecting from the SVP rentals on capital gains, etc so House Crowd just ran out of cash really. There doesnt seem to be some massive black hole of funds or anything, House crowd doesnt have big creditors etc That sounds fine but judging by what has actually happened to platforms in administration unfortunately I would take it all with a pinch of salt. Hopefully it will all follow the plan
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Post by jonathan24 on Mar 28, 2021 22:55:04 GMT
No need to worry about total loss. That's great. However, I think better to expect about 15% max loss as a rule of thumb. This is because of 2 things:
1) The process takes years. You lose out on inflation.
2) The costs of the liquidation itself are expensive.
This has happened to me 3 times now and I'm beginning to get annoyed by myself for managing to pick losing propositions like this.
In the case of THC I chose it because I figured it's secured and even if THC goes bust, I'll be alright. While that's true, the reality that will play out won't be perfect.
I'm just asking myself 'Would I do it again?'
Can anyone tell me how my shares are related to THC?
Can anyone tell me how the whole thing can be structured better in the future?
The shares in the properties should be more independent from THC. If designing this scheme in the future, how would you set things up so that when THC goes bust, share owners of the Houses simply keep or sell their shares on the open market?
IMHO, this is a kind of test case for p2p.
I'm not going to pretend to know much about how the liquidation process works. However, something unusual strikes me. In their latest correspondence, the administrators are very clear that we have lent to the development SPVs and not to THC. Accordingly, if there is a shortfall, we have no recourse as creditors to THC. If that is the case, how can we be expected to fund any costs of liquidation, given that we have no financial interest in anything belonging to THC? The second thing is related to the first. We have lent to the development SPVs. However, some of that money is sitting in a bank account with THC's name on it (how the FCA permitted that, I have no idea - asleep on the job again?). But the point is, how can there be any uncertainty as to how that money belongs to, that requires legal advice? Can the administrators just seek to claim it because it was in a THC bank account, such that the development companies become a creditor to THC?
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Post by superowls1 on Apr 7, 2021 11:42:01 GMT
It would appear that the update pages for each of the projects has been removed (or there is an error with the hosting....) blog.thehousecrowd.com/the-downs-altrincham-cheshire/Would have thought that this would have been the best place to update based on their last email etc. |
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mancman
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Post by mancman on Apr 7, 2021 17:41:51 GMT
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Post by lostsheep on Apr 8, 2021 10:53:18 GMT
No, that's worst case scenario stuff... hate to think what get back on the £ on a fire sale like that....
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Post by superowls1 on Apr 8, 2021 11:46:41 GMT
No, that's worst case scenario stuff... hate to think what get back on the £ on a fire sale like that.... I think this is more to do with the 1st charge holder rather than Quantuma selling the assets. Not good either way though.
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