Joint Venture Property Finance Joint Venture property finance can be an ideal solution for small house builders to fund their projects. Whether you’re a property investor with limited time or landowner searching for a partner to get your venture off the ground, joint venture property financing could be just what
Turned Down For property Development Finance? If you’re a UK house builder and have been declined for property development finance, don’t despair. A broker can assist in finding the right lender and completing any necessary specialist documentation. Despite an uptick in investment, small and medium-sized developers are still finding it
How 100% property Joint Venture finance works
The finance company will pay 100% of all costs & fees:
This is a genuine offer, and is mainly aimed at experienced developers or builders seeking to enter into their own developments. Ideally they want people who know what they are doing and can ‘BUILD’ the properties ( the funder would expect to see some experience as a builder either as a main agent or a subcontractor or building site experience as a site Project Manager or Architect etc )
They will genuinely fund:
- 100% of land purchase cost + stamp duty & legals
- 100% of all build costs
- Max LTV 75% ( ideally 70% GDV )
- Max term 12 months
- Project has to show 30% net profit projection
- No PG’s ( personal Guarantee’s )
- Max finance £2m, (although new entrants max finance will be limited to circa £1m)
The funder will charge interest & fee’s as per any development / bridging finance lender would. As they are putting all the money in and taking all the financial risk, they will then split profits on sale on a 50/50 basis
This 50/50 joint venture finance is ideal for builders who may have been sub-agents, and have the capability to build a small site or property conversion, but lack the initial funds. It becomes an ideal stepping stone, as after developing 2 or 3 projects , most builders are then financially self sufficient to self fund future projects of which of course you would then get 100% of any profits. Whatever your goal, we are here to help get you the lending you need to make your project a reality.
50 / 50 share on profits
The funder will look to share genuine profits with you on a 50 / 50 basis. Bear in mind that THEY have taken ALL the financial risk on the project.
YES you have provided the management and building skills, but if you weren’t able to fund the typical 30% – 50% of initial land purchase prices, then the development wouldn’t have been completed by you anyway.
This is a true WIN – WIN situation, you still get to do the development site, you generate real cash profits from the project, and after doing 2 or 3 JV’s you will probably then have enough to self finance future projects and take 100% of the profits.
How it works to make it a WIN-WIN situation
Let’s say you have built a few houses or designed or project managed a site. You see a new site thats ripe for development, has outline PP in place for 6 houses, with a GDV of £1.9m
The land costs is £500k and You know from experience that you can build these out for £800k. That would leave you with a profit of £600k before interest and charges. So lets say net its £500k real profit. BUT you don’t have any real cash, just £40k savings, which isnt enough to pay for 30% of the land value and stamp duty & fee’s etc.
So you don’t get the site and dont make any money…………
You use JOINT VENTURE finance and build out the site and make £250k profit as your share. Now you might have enough to now self fund the next development yourself, OR you might choose to do one or two more JV’s and build up your residual funds. 2 years down the line you have £600k in savings, when another 4th site comes along….. you now no longer need to share profits 50/50 and can go on to develop that project and take 100% of all the profits.
Applying for 100% joint venture property finance
We make it easy for you to apply,
- Call us on 0800 246 5698 ( 9am- 5pm) or email us 24/7 with the outline of your project.
- We will assess the project and determine best lender / rates
- we will present you with indicative terms
- If above OK – then we can APPLY for the finance
When speaking to us about your project, here a handy guide to what we will need to know;
- Your Details/ if finance is in personal names or Ltd Co / SPV
- Intended development eg 2 storey house extension, or site for 18 new build houses
- Site address
- Has planning permission been granted ? / if not what stage are you at?
- How much finance you need? eg £750k
- How long you need the finance for ? eg 12 months
- What the final value of the property(s) will be worth – eg £1million
So a simple call or email to kick it off ! – The rest we can gather as we go along.
Construction Loan: £100k - £2m
(upto £10m funding available for experienced / previous clients with proven track record)
If you’ve got a building project that you want to get off the ground, we want to hear about it.
Our team will take the time to understand your story and find a competitive solution that is tailored to your needs. Whether your development project is residential, a care home, student accommodation, office or mixed use, we will work with you to try to make it happen.