- 24th October 2023
- Posted by: DMM
- Categories: Development Finance, Finance Broker
Property development can be a lucrative and rewarding venture and history has shown us that property investment in property in the UK is a strong long term investment, so in this article we look at 5 tips on how to raise property development finance in 2023. Whether you’re looking to renovate an existing property or build something from the ground up, securing development finance is the first step you need to take in turning your vision into reality.
Let’s look at five top tips to help you raise the funds you need for your property development project.
Create a Solid Business Plan
Before making such a leap, it’s important to have a well-detailed business plan in place. This can include a clear description of your project, financial projections, a market analysis, and a breakdown of costs. A solid business plan will not only help you understand your project better but also instil confidence in potential investors or lenders.
Assess Your Project Viability
Before seeking external financing, it’s essential to evaluate the viability of your project through doing a detailed appraisal of all costs involved from acquisition through to build and exit. The final return against GDV or on cost will have to be sufficient to allow for financing fees.
Explore Multiple Funding Sources
There are various sources of property development finance, and it’s advisable to diversify your funding to mitigate risks. Some common sources include:
- Challenger Banks: Specialist development lenders and challenger banks are a popular choice for funding, usually through a senior development facility or bridging loan. They typically offer competitive interest rates and terms.
- Private Investors: You can seek funding from private individuals, family, or friends who are willing to invest in your project. There are also equity investors who can provide the capital you may need.
- Joint Ventures: Partnering with a landowner, another experienced property developer or specialist Joint Venture lenders are also a great options as they can provide access to both their expertise and capital.
As well as these 5 tips on how to raise property development finance Developer Money Market have many more ideas that may help you structure a bespoke funding solution
Research Local Grants and Incentives
Some local and regional governments may offer grants, schemes, or tax breaks to promote property development in specific areas, such as Land Remediation Relief or Greener Homes Alliance. Make sure to research these opportunities and see if your project aligns with any of these programs.
Show a Strong Exit Strategy
If you have borrowed money to fund your property development, lenders and investors will want to see a clear exit strategy that demonstrates how the project will be profitable and how they will be repaid. Whether you plan to sell the developed property, refinance it, or hold it for rental income, a well-thought-out exit strategy is important.
5 Tips on How to Raise Property Development Finance
Developer Money Market are specialists in property development funding. With no upfront or obligation fees, feel free to approach us to learn more about increasing your chances of securing the necessary funding for your property development project. As well as these 5 tips on how to raise property development finance we have many more ideas that may help you.
So, give us a call on 0207 096 2003 or try our online loan search platform instantly!
You can also learn more about us and our services via our YouTube Channel here.