Posted on May 13, 2010.
How can we help brokers to raise money in real estate development in the United Kingdom? 1. The advantages of using CD Property Finance as your broker.
In these uncertain times for property developers there is really only one certainty - it will not straghtforward to find funding for your development! We all know the reasons for this - the banks themselves overwhelmed and are now clamping heavily on real estate.
However, do not despair. As a broker with over 25 years in property development finance Chris Dowdeswell CD Property Finance has maintained very close relations with banks and investors that really matter. This means that packets can still cause Chris attractive financing on competitive terms. If you ask CD Property Finance to work on your behalf, you will get:
1 - Our knowledge of the market in which banks are lending and what types of projects, and where.
2 - Access to other funding sources, such as cash rich investors.
3 - Special rates - we negotiate hard for our customers!
4 - Our knowledge gained over 25 years that creditors of the information should be presented with and how it should be presented. CD Property Finance gives you an edge over other developers and allows you to jump the queue for the attention of banks (and their money!).
5 - Personal service by Chris Dowdeswell CCIA
2. Hampshire case study
In June, a manager of high street banking business known by Chris Dowdeswell for 10 years has called us to say they had been invited to take an experienced developer around £ 100,000 to finsh off the construction of two small houses in Hampshire. The bank - one of those that we all actions! - We were told that their credit department had refused to pay even if the £ 100,000 loan represented 30% of the value of completed houses. Could CD Property Finance Help?
We immediately knew we could and prepared to respond to customers within a few days. We have gathered all the information that we knew that our lender would need and presented to them immediately. The lender has met the developer in a few days and offered all the money they need to fill the two houses. The developer was able to draw on its funds in the four weeks of the meeting of the lender.
Our client, a developer is extremely grateful for our service and we were informed that if the CD Property Finance had not been able to help, he should have shut the site down and lose much of its own money.
3. West Sussex Case Study
A major client has obtained an option to purchase a site in West Sussex. He was able to achieve planning permission for 3 detached houses and approached Chris Dowdeswell for a loan of £ 1,000,000 to develop the site. Despite difficult conditions, we have arranged the loan from a bank whose senior director we had known for more than 20 years.
This strong relationship has led to the lending bank for 82% of the total development costs - an unusually high percentage in the current economic climate - with the bank to take a small share of the profits of the scheme.
4. What are the different types of financing?
Development finance can seem complex, but the elements can be simply be distributed according to the structure of the loan required by the customer. The most commonly used are the following:
Bank financing (see below) + cost cash for developers = 100%
Bank financing + Mezzanine financing (see below) + cash for developers = 100% of cost
Equity financing (see below) = 100% of cost
5. DEFINITIONS
Bank financing - usually around 65% of project cost, secured by a first charge on the development site.
Mezzanine Financial.
