One of the biggest tasks for property developers is to find funding. Since property developers move from project to project, it isn’t possible for them to always have upfront capital, as it is usually tied in ongoing projects and developments. For property developers to get funding, they either need to apply for bank loans, enter joint venture partnerships or try crowdfunding platforms. However, none of these can ever guarantee 100 per cent funding. Simply put, no bank or lender will want to risk giving thousands and thousands of pounds for one single property development, especially during these uncertain times of the Covid-19 pandemic. On the other hand, joint venture partnerships usually mean a split in the profit which is not the ideal goal for most developers. Lastly, crowdfunding is never a sure-shot thing, so expecting a crowdfunding platform to secure 100 per cent funding is not something real estate developers can bank on.
In short, raising finance for property development is never an easy task. Real estate developers and property builders have to work day and night to secure funding. And, since there are so many ongoing projects simultaneously, they need to keep finding different investors for different projects. As one project finishes, another one springs up; as new projects come up, new investors need to come on board, and so the cycle continues. So, how can property developers get 100 per cent funding for their upcoming projects?
Well, one of the best ways to acquire 100 per cent funding is by finding a platform that specifically helps real estate developers and property builders secure financing. By doing so, property developers no longer need to run around to find investors or spend hours meeting bank officials in order to secure a loan. These developer-specific platforms connect developers and builders with the right kind of investors. These could be high net worth individuals, serial investors, angel investors or even a sort of crowdfunding platform that solely allows people to invest in development properties.
Sqft.capital is one such venture that aims to help property developers find the right source of funding from the right lenders. Not only this but Sqft.capital ensures that they meet the level of funding that you are looking for while also creating a structure for the funding. This company ensures that you earn the highest profit while putting in the lowest equity requirement! In fact, you can get a loan without putting in any equity requirement in some cases, which means it is a 100 per cent loan to cost.
Sqft.capital has an appraisal modelling tool that is a free tool that helps you model a financial projection based on 14 different metrics. Once the modelling process is complete, this company ensures that you have the heist profit or the least equity requirement, depending on your metrics and necessary project details. These metrics and financial projections are then showcased in a simple manner that is easy for potential investors to understand. Once the model is ready, Sqft.capital does all the work and finds the best lenders based on your requirement. Since the process of financial projection is broken down into such easy-to-understand estimates, it is straightforward for a developer or a builder to secure 100 per cent financing from a lender on this website.
Of course, property developers and builders can always use the traditional method of securing a bank loan or a private lender to get funding for their project. In that case, in order to secure 100 per cent funding, your paperwork needs to be in place, your documents need to be ready, and your presentation skills need to be immaculate. You need to know the expected end value after the purchase price and the total build-up cost, as well as the contingency plan in case things go south. Alongside that, you need to have a full cost breakdown as well as a breakdown of your professional development team. And of course, you need to show your years of experience and your previous projects, so a ‘property development CV’ wouldn’t hurt. You need to have all the building permissions and planning permits in hand and the regulations that you need to follow as per the laws of the area. And finally, you need to convince the investor or lender that the potential for yield or the return on investment is really high!