It’s something we hear a lot from our investors “how can we fund this?”
Funding developments and multiple developments is such a key part of being able to really scale your property portfolio.
Here are some of our tips on how to master funding to build your portfolio and how we are making larger HMO and development projects really pay off.
Recycling your money
We can not stress this enough the key to success in property developing (unless you have unlimited funds) is being able to recycle your physical money.
What do we mean by this, well the target is always to buy add value (more value that your are spending doing it), to create or force equity then refinance your money out. Leaving long term lending, i.e a mortgage and that equity you just created in the property and little else. You can then take your original money and move on to the next project.
If you can master being able to recycle your cash, then you open a door to infinite possibilities!
How do we do it? We look for the competitive advantage, we add rooms to lofts, add extensions and if there is a garage make it a bedroom. We look for empty low value commercial buildings and convert them in to high value residential. We use commercial refinance where possible which allows us to pull way more money out of a property than you would be able otherwise.
Making the most of the right finance options
There are several ways to raise finance for property investments. If you don’t have bags of cash under your mattress or a great, great grandmother with a loft full of precious antiques, you’re going to have to get a little creative.
Finding out what finance options are available to YOU is incredibly important. Being primed and ready to go with those finance options could also be the difference between you securing a deal and it going to someone else. More on this soon…
Never under estimate the power of a JV with someone in the know. We work with a number of you on projects which is a win-win as we analyse 30 - 50 properties a week, which is circa 2500 properties a year so we see some pretty good deals in that. Our JV clients and retained clients are always the first to see the really good ones.
Keeping up to speed in an ever changing market
We’re probably at that point now where we need to admit to ourselves that low interest rates are in the past (for now, although the outlook is looking much better than a couple of month ago). It’s also a time when there are even more “hoops” to jump through when it comes to securing lending.
By making sure that you have a small, trusted source of information, you can remain up to speed and ensure you’re in the most lendable position and ready to strike should that perfect deal arrive on your lap.
コメント