We are constantly looking at ways to help our property development clients, and to provide opportunities for our introducers.
For property development clients we are actively looking to bring investors to your schemes.
If you are an introducer, you and your clients are probably tired of achieving poor returns on money invested. In property development there are opportunities for sophisticated investors and high net worth individuals to achieve enhanced returns.
By way of background, by 2007 it became common for banks to lend up to 85% of the costs of a development project. Since the banking crisis there are not only far fewer property lenders, but those banks that are still lending have amended their criteria and now limit their lending to 60% to 70% of development costs. This means that there is a huge funding gap for most development schemes. This funding gap can be filled by investors.
CD Property Finance offers opportunities for investment funds, companies and high net worth individuals to invest in property projects.
Our property developer clients have the experience to identify profitable sites and CD Property Finance can arrange the development finance form the banks for such projects. However, it is often the case that schemes need some investor finance to ensure that it is adequately funded.
EQUITY FINANCE
We are always looking for equity partners for our clients. Projects to be funded include family housing developments, refurbishments, barn conversions and apartment schemes.
We can arrange development finance from a bank to around 70% of cost and equity partners are sought for the 30% balance of costs. The profits from the completed development are normally spilt on a 50/50 basis between the developer and the investor. The scheme can either be financed through a new company or the main development company, with an agreement setting out the joint venture terms.
MEZZANINE FINANCE
Often the developer client has some capital to put towards the project cost, but not enough to satisfy the bank's requirements. Typically a bank will lend 70% of costs and the gap can be financed, for instance 15% by the developer and 15% by a mezzanine lender.
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