FUNDED: 12 Luxury Homes in Angus

This case study is for the last deal we completed before the Registers closed in March, following the Government Restrictions being put in place. The fund-raise was for an existing client completing Phase 2 of a development, where we funded Phase 1 in 2019, for a total of 12 detached houses. 

The client was initially funded with a Retail Bank development loan as his focus had been on cost of capital for the first phase. We put in place a loan to fund 80% of the development costs at a market leading rate. 

We were aware from our various discussions with the Developer of two other sites the client was looking to purchase and develop out before this phase of the Angus development progressed. As a result of strong sales demand in the first phase, and with all units selling off-plan over the anticipated values, he wanted to continue with the build out of the remainder of the site. 

Our initial funder was capped at 70% of the development cost to complete the site, as a result of there being no residual land value for the second phase, meaning the client would need to inject more capital with the risk being he was unable to purchase the next sites.

We offered an alternative loan product; at a marginally higher rate of interest and that allowed him to have funding for 100% of the development costs, as well as releasing equity from the land on day one. This allowed him to buy both new sites using cash and complete the existing development, of which 3 units have already sold off plan.  

We are now working on the funding package for the next two sites which will be delivered once Detailed Planning Consent has been received.

Concept Financial Group are real estate finance consultants providing solutions for property developers and investors through both private and commercial funders. For further information go to www.conceptfinancialgroup.co.uk.