Creating Clarity on Property Exits in 2018

Exiting the properties funded on Property Moose has always formed a key part of the investment strategy for the buy-to-let opportunities, and we feel that it is important that our members know what goes on behind the scenes when we’re assessing and preparing for an exit.

Before the end of Q1 2018, we are going to issue exit strategy votes for all of the buy-to-let properties in the portfolio, a process we are very positive about. Many of the terms are naturally maturing in 2018, and as there is some market uncertainty within the buy-to-let sector, we feel it is prudent to explore the exit options for these investments sooner rather than later.

As you will know, and as per the Articles of the SPV, which govern the relationship Property Moose has with its members and the properties, we need to obtain consent before we can implement an exit strategy.

Our aim is to present three options for investors to vote on for each exit once we have reviewed the property condition and opportunities they present.

However, because the properties may have different statuses (occupied or vacant), the number of votes required for each property may be different. For example, we may need investors to vote to serve a tenant notice so that we can conduct a full review of the property, carry out any works, or because vacant possession may enhance potential capital returns. Similarly, this stage may be missed, and the first vote may be for the final exit strategy.

Our exit planning process has three stages:

Stage 1 – Due Diligence

Many of the properties in the portfolio have been tenanted for some time so it is important for us to go out and re-visit them to undertake a detailed report on their condition. At this time, we speak with local agents to get an idea of the current value and any potential uplift in value that may be created through works to the property. A detailed analysis is carried out, including evaluating the current tenancy. We may need your consent to evict the tenant before we can conduct this detailed DD.

Stage 2 – Exit Strategy Voting

Once we have fully assessed the property and available strategies, an Exit vote will be raised with investors as to how they would like us to process an exit. This could be one of a number of options and we’ve set out some examples below:

1. List the property for sale as is;
2. List the property for sale after completing works to potentially maximise value;
3. Continue running the investment for a further 12-months.

In some situations, there may be specific items that we ask to be voted on that may help maximise returns for investors. It is important that all investors read and vote when requested to ensure that properties can be processed efficiently. Investors will be emailed the vote with a 7-day participation deadline.

Stage 3 – Execution

We execute the strategy that has been voted for and aim to keep investors updated every 4 weeks within the messaging system on the website. This is to avoid the situation where investors are receiving a large number of emails from us at the same time.

For any sales, we will use a locally appointed agent that will be included in the vote at Stage 2 or will be voted on separately. We do this to maximise the potential value and speed of sale based on data that shows who the best performing local agents are.

Stage 4 – Payments

Once a sale is completed, we will finalise the accounts for the SPV and file these with Companies House and HMRC. Once this is done, any returns can be distributed to investors.

 

Overdue and Currently Due Votes

Please note that any votes that are already due will be released as part of this process.

We apologise for any delay in processing a handful of the votes for properties that have recently reached the end of their initial term.

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