If you are a first-time property developer, or have equity tied up in assets, then you may require investment equity for property development.
An equity investment partner can bring your next property development the cash required to obtain competitive senior debt funding and make your project a reality.
Developer Money Market can help you structure investment equity for property development together with a senior lender.
Key Features of Investment Equity for Property Development:
- Equity Investment Loans of £200,000 to £1,000,000 per project
- PROPERTY DEVELOPMENT EXPERIENCE NOT NECESSARY
- Suitable for new build or conversions
- House and flat developments
- ‘Mid-market’ residential developments preferred
- UK wide locations considered
It is not essential for borrowers to have a proven track record behind them and so first-time developers or perhaps contractors wanting to do a first project in their own right, may apply.
How does Investment Equity for Property Development Work?
Typically, the investment equity will be loaned directly into the SPV and up to 30% of the purchase price.
- We can help you source equity investment for your project of between £200,000 and £1.25 million
- The remaining costs will be sourced from a specialist lender for development funding
- The equity investor will charge interest on their cash loan, usually at a rate of 5%p.a.
- Profit will be split 50:50 (sometimes this will be a pre-agreed fixed amount) and so a good profit level will be required
What Property Development Experience is Required?
It is not essential for borrowers to have a proven track record behind them and so first-time developers or perhaps contractors wanting to do a first project in their own right, may apply.
What else is involved?
Your equity investor will secure their investment with a second charge on the subject land and it is worth noting that they will not be a party to the SPV or provide any PG’s.
Most senior lenders will want a developer to be able to support a facility with a PG of between 15 – 25% of the loan amount. Where this may not be possible, there are a number of lenders that will not require a PG.
Developer Money Market is an independent specialist in property development funding. We can help you structure equity for your next property development together with senior debt.
Contact us on info@developermoneymarket.com or call 0207 096 2003 for an informal discussion!
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