An opportunity to own a stake in Property118.com?

May 5, 2011 - PRLog -- There is no doubt that Property118.com has captured the interest of the UK buy to let community.  Since it was launched just 14 weeks ago the web-site has overtaken more than 10 million other web-sites worldwide in terms of popularity (independently measured by Alexa.com).

The business is now considering ways to raise £500,000 by way of private investment and loan capital from up to 50 private investors of high net worth in order to develop a directory of trades and services within the web-site.  If this structure is adopted the minimum investment is likely to be in blocks of £10,001 comprising a £1 share in the business plus a £10,000 unsecured loan over 5 years yielding a gross interest rate return of 5% per annum and return of capital at the end of the loan term.

Projected income is £18 million per annum, of which more than 75% is targeted as earnings before interest, tax, depreciation and amortisation (EBITDA).  This will be achieved from advertising revenue of £15 per month from 100,000 small businesses supporting landlords.

There are approximately 1.5 million buy to let investors in the UK and the founders of Property118.com have estimated that a further 6.5 million individuals and small businesses provide services or trades to these landlords.  The business plan is to provide free directory listings in an online business directory to 1 million of these businesses (one eighth of the target market) and to up-sell around 10% of these  to the £15 a month premium listing service to include the businesses logo, web-site link and business description in the searchable business directory.  An online forum and private messaging service is also planned to provide both members and advertisers an opportunity to network more effectively via the web-site.  Further details of the business model are available on request by emailing info@property118.com.

The value of the business is in its database of over 100,000 landlords who already subscribe to the news section of the web-site.  Once the business is trading at the levels shown above (estimated timescale 3 years) the capital value is projected to be somewhere in the region of £120 million (10 X EBITDA).  At that point the founders will consider a trade sale or flotation.

The investment model under consideration entails private loans to the business in blocks of £10,000 which will also entitle the investor to purchase one of 500 shares at £1.  A £20,000 loan would entitle the purchaser to acquire two shares and so on, thus valuing the intellectual property of the business today at £5 million.

A recent press release outlining the initial success of the web-site was picked up by literally hundreds of news carriers and web-sites worldwide.  Results from Google can be found at  http://www.google.com/search?hl=en&q=%22Social+Network+fo...

In the event of this offer being made available the application procedure is intended to be incredibly simple and will be managed by a firm of Chartered Accountants.  Applicants will need to provide information to satisfy money laundering regulations to include proof of identity (passport or driving licence) and proof of residence (two utility bills).  Upon receipt of funds a promissory note for repayment of the loan and interest together with  the appropriate share certificate(s) will be issued.

This article is not a public offering and is offered by way of information and a press release only to gauge interest in the potential of this investment opportunity.  The figures provided above are projections and are not, therefore, guaranteed.  In the event of this investment opportunity being made publicly available investors should note that there is a risk of losing some or all of the capital loaned or invested.  This type of investment is classified as speculative and therefore carries a high degree of risk as the success of such ventures are highly reliant upon the skills of the management team to produce the results projected.

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Property118.com is an online community for UK Property Investors and their recommended Trades and Professions to share information, contacts and best practice.