Property developers and builders generally have a hard time securing finance in order to start construction. If you own plots in different parts of the country and wish to build apartment complexes, you will obviously need financing. Most builders generally do not use their own funds for the construction process. For starters, the amount of capital isn’t enough to fund all of the building projects. Furthermore, investing all of the company’s money in operations is a bad idea by any standards. If you want to secure finance for developing new properties, here are a few things that you should keep in mind:
Finding a Lender
As a property developer, every decision you make should be focused on profit maximisation. When it comes to finding a lender, going to a bank or a credit institution is not a good idea. There are separate companies that offer development finance to private builders and property managers.
When it comes to finding a lender, there are several things that you should be concerned about. First of all, no lender will give you a loan unless there’s something in it for them. Your lender will obviously charge interest for giving you the loan. Therefore, the first thing that you should do is ask for loan quotes from several financiers. This will give you an idea about which lenders offer the best and most affordable rates of interest.
Working with an Agent
As a property developer, it will obviously be difficult for you to take your idea and pitch it to different financiers. Therefore, one of the best options available to most builders is to work with an agent. An agent can help you secure financing for property developments ranging from as little as £100,000 to as high as £40 million. Once the property is fully developed, you can sell off the condominiums or apartments in order to make back your initial investment.
One of the biggest advantages of working with an agent is that it makes it easy for you to secure a loan. For starters, most agents have contacts with several lenders and can pitch your idea in a much better way to investors. A potential investor will obviously want to mitigate their chances of losing money, so they will need assurances about your company’s history, development and any ongoing concerns. The agent can help you in securing the loan within a short amount of time.
As a property developer, working with an agent is probably the best idea. If there are delays in securing proper financing, construction work will have to be eventually stopped, which will ultimately lead to a delay in deadlines and completion of work. This will deter shareholders and will also destroy your company’s goodwill. An agent will work overtime in order to secure financing for your company and to make sure that construction work goes smoothly and projects are completed on time without any issues. These are just a few things that you should know about securing property financing.
