Entrepreneurs @ work: Inhabit

Running two ventures in tandem, Gus Zogolovitch is a new breed of parallel entrepreneur.

Running two ventures in tandem, Gus Zogolovitch is a new breed of parallel entrepreneur.

This article is provided by the Deloitte Institute of Innovation and Entrepreneurship.


Serial entrepreneur Gus Zogolovitch is carving out a new classification – the parallel entrepreneur – as he stacks several start-ups on top of one another. And, while his two new ventures have the property industry in common, they are very different businesses.

Inhabit trades on Zogolovitch’s considerable experience in the self-build market. He is an executive committee member of the national self-Build Association. “I’ve always liked the idea of helping self-builders. There is this new burgeoning industry called custom-build, which is effectively the professionalization of self-build,” he says. “People that do not want to go through the pain of doing the build themselves can hook up with a professional developer – Inhabit – and we will help you build your own dream home, and take all the risk out of it.”

The alternative for the self-builder is to find your own land, raise the finance, get the builders and architects in, run the job, and get the property built. “Self-build is a big undertaking and costly. If you go down that route, you are learning every step of the way and likely to make lots of mistakes, some of which could have huge repercussions,” says Zogolovitch.

Many would-be home owners will favour Zogolovitch’s one-stop shop approach. Inhabit can deal with the custom-build project from start to finish, its services including finding the land, sourcing reliable architects and principal building contractors, and holding the client’s hand every step of the way.

Whereas Inhabit offers only limited opportunity to scale up the business, Zogolovitch’s second start up, Crowdestates, is a different proposition. “At the moment, first-time buyers often cannot afford to buy their own home because it takes them over ten years to save up for a deposit.” Indeed, parents lend some £2bn per year to children to get on the property ladder, with 65 per cent of first-time buyers relying on family money to take that first step.

At the same time, Zogolovitch noted the increasing popularity of crowdfunded financing, and decided to devise an online crowdfunding solution for an offline bricks-and-mortar problem. Effectively, Crowdestates is a peer-to-peer deposit lending platform that matches mortgage deposit seekers with willing lenders and in doing so provides people with a way to invest in property through relatively small investments. So, for example, for a property costing £100,000, a bank might make a loan at 70 per cent loan to value (LTV), and require a 30 per cent deposit. With the bank providing £70,000, the purchaser needs to find £30,000. By using Crowdestates the buyer only needs to put in £10,000, sourcing the rest through crowdfunding.

Zogolovitch expects the lending to come from two main sources, friends and family and investors. While the borrower gets their deposit and their house, the lender may also benefit. “We create a secondary market allowing you to sell on your loan if someone else wants to buy it,” he says. “Plus you get two per cent a year on your money and a share of any uplift in property prices, which could turn out to be between eight and 12 per cent on your money.”

There are risks, of course: borrowers may default, property prices may slump. Either way there is still a reasonable degree of protection. The default risk is spread across many borrowers, and the Crowdestates platform is operated in partnership with banks, which will run their standard mortgage credit checking facilities. And, in the event of a fall in property prices, the lender is protected for the percentage the buyers contribute directly to the deposit.

Regulatory approval has been granted for Crowdestates, and Zogolovitch is heading towards a launch date. Inhabit is further along, with custom-build projects under way. But while the businesses may be moving at different speeds, both ideas have the potential to change the way we think about the UK property market.

Zogolovitch is looking forward to the day his two businesses will mesh together. “Hopefully, then, the clients will be able to sit back and relax in a self-build funded by the crowd,” he says.

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