Joint Venture Funding, often referred to as Equity Development Finance, is where two or more developers pool their resources to fund a project from start to finish. Unlike more traditional routes to funding, Joint Venture funding provides the opportunity to access up to 100% of the development costs for a project.
100% Development finance is a method of developing property without using your own money. As the lender provides all of the money needed to complete the project, profits are then split upon the sale of the site.
Typically, the most confusing part of this set up is the issue of ownership. Usually, the development property will be placed in a special purpose vehicle (SPV). This is an Ltd. company set up purely to own the asset and hold liability.
To give you a clearer idea of how Joint Venture funding works, here’s a project we funded recently:
PROJECT
3 x 2 bedroom terraced houses
3 x 3 bedroom terraced houses
14 x 4 bedroom detached houses
1 x 5 bedroom detached house
DURATION
18 months
TOTAL FUNDED
£4,739,904
The client needed 100% funding for land and build. The proposed scheme is for 21 dwellings, including 15 detached houses all with their own parking spaces and private gardens.
The location benefits from a small village feel whilst still being well connected.
HOW IT WORKS
We provide 100% full Joint Venture Funding for you as a professional property developer.
Our experienced team is on hand to help make your project become not just bricks and mortar, but a great earning opportunity too. As your Joint Venture partner, we fund 100% of all costs from our own reserves, helping you to maximise profit.
We are proud of our strong and proven track record – with our simple, transparent, no-nonsense approach, it’s no wonder our development partners return to us project after project.
THE BASICS
Any lender that offers Joint Venture funding will have their own set of requirements, this is ours:
– We like to work with developers who have 10 years or more experience and a solid track record
– Projects are multi-unit residential new build or conversions under PDR in the mid-price bracket
– Project length should be no more than 24 months
– Full planning permission must already be in place
– GDV target of £5 million – £15 million
– GDV per unit should be no more than £500K
– Interest is charged at 1% per month
– We work to ROCEs (Return On Capital Employed)
– Profit is divided between Joint Venture partners, typically in the developer’s favour
– We will hold the asset in a brand new Special Purpose Vehicle (SPV) owned by Go Develop.
– *Permitted Development Rights – Commercial conversions to residential under PDR planning.
THE BENEFITS
– One-stop-shop solution. One set of legal fees, one relationship, one monitoring surveyor. All costs amalgamated into one fund – saving you time and money
– It doesn’t tie up your funds meaning you can turbo-charge your profits through multiple deals
– Team of experts to support you from legal and surveying to marketing and administration
– Allows you to take on more projects with all the synergy and profit benefits
– No need to service debt at any stage, all interest can be rolled up to the end of the project.
– Option to take project management fees
– One Joint Venture funder covering all the costs removes the need for inter-creditor agreements and keeps things simple
100% Joint Venture funding is a great way to maximise profit as a property developer.
HOW TO GET STARTED WITH JOINT VENTURE FUNDING