Property Development Finance – Notes From Our Files
We are often asked by clients:
- How do we work?
- What types of funding do we arrange?
- What sectors do we work in?
- What loan sizes can we arrange?
A good broker will have completed many deals just like yours. To get a sense of what we can do when it comes to Property Development Finance, we have compiled some case studies on three of our recently completed deals
Case Study One: £300,000 to assist a client with a partially completed development in Solihull, West Midlands
Client: Experienced Developer
Project: Development of a new build 3-bedroom bungalow
How We Helped our Client
Our client had commenced the development of a new build bungalow with funds from a private investor. However, halfway through construction, the private investor advised that he could not provide any further funds to complete the project. In addition, the investor demanded repayment of the funds that had been provided for the development up to that point.
The problem for our client was finding a new lender who was prepared to become involved in a partially completed project.
With the help of one of our specialist property development lenders, we were able to negotiate a deal that provided a total loan of £300,000. This enabled the private lender to be repaid in full whilst providing all the funds our client needed to complete the project. In addition, the loan facility allowed all interest costs to be rolled and repaid once the completed project was sold.
Case Study Two: £3,050,000 to carry out the development of 9 new apartments in South Croydon
Client: Experienced Developer and Contractor
Project: Development of 9 Apartments
Our client was a highly experienced developer and contractor acquiring a property in South Croydon with planning permission to demolish and carry out a development of 9 new-build apartments. Our client was acting as both the developer and main contractor on the project, overseeing the development on a day-to-day basis.
Funding was required in order to acquire the property, carry out the development, and roll up interest costs for the entire 12-month period of the development.
We arranged a total loan of £3,050,000 which equated to 94% of the total cost of the project.
Funding was arranged as follows:
£2,580,000 – Senior Debt Finance
£320,000 – Mezzanine Finance
£150,000 – Equity Finance
Case Study Three: £720,000 to assist our client to develop a dilapidated barn in Kings Langley, Hertfordshire
Client: First Time Developers
Project: Barn Conversion to a four-bedroom house
How We Helped
Our clients had extensive construction experience, but this was their first project as developers.
The project was Grade 2 listed and had the benefit of planning permission for conversion to a four-bedroom house with associated car parking and landscaping.
Our clients were acting as project managers as well as being fully involved in th development on a day-to-day basis, along with a full team of sub-contractors. They needed funding in order to acquire the property, carry out the development and roll-up costs for the entire 18-month period of the project.
We arranged a total loan of £720,000 which including the roll-up of interest equated to 65% of the gross development value (GDV)
Do you need property development finance? At Funding Track, we would of course be delighted to help you source the right funding solution, so please contact us today on 020 3857 3030 to find out how we can help.
