We understand that concern since as developers we must live with a certain amount of risk and we always co invest our own money alongside our investors. The way to mitigate risk lies in conducting detailed due diligence and financial appraisals for all of our projects and also in making sure there is enough margin in the deal to offset any unforeseen problems. We don’t take on projects that can’t guarantee this. We will share this information with you so you can understand our professional approach see how much detailed analysis that goes into each site appraisal and you will also have visibility of the financial data. The risk will be pointed out from the outset. These include some macro level factors such as the housing market in general plus any site-specific issues. In development there are often surprises but a professional developer such as Distinctive has the experience to deal with these.

Returns will vary depending on the development itself and the investment amount but typically returns will start at 8+% per annum interest rate and may go much higher. This will also depend on whether security is required or not. Our focus is to maximise return on investment and deliver value for our investor partners.

Our primary investor (senior debt) will be a financial institution such as a high street bank. We have worked with RBS and HSBC in the past. Alongside this, we put our own money in so we also have “skin in the game” and depending on the size of the development, there may be a handful of other private investors or you may be the only one. We do this to allow some flexibility. The benefit of investing alongside a major bank is that they will conduct an extremely detailed due diligence on the development itself and on our company in order to protect their risk. That means that you can be confident the investment has been signed off by a professional funding organisation and fully meets their criteria. You can also take comfort that as well evaluating the financials, they will have signed off all elements of risk and taken a deep dive into the legal matters. It’s not easy to get finance from high street banks and to do so you need to be able to present a solid and credible financial case.

As above after senior debt from a major bank we like to enhance our projects with private investment as well as our own funds. The amounts depend on the scheme but typical private investments can range from £10,000 to £100,000 and more for larger developments. We are happy to look at smaller amounts, particularly from first time investors who want to get to know us first.

Our commitment is to make you a happy investor so that you keep investing in our future projects, so we are focused on our longer-term relationship. If you want to test us out with a smaller amount to start because that’s the risk you are comfortable with then that’s fine with us. We want you in for the long haul and this is how partnerships often start. As long as it’s a sensible amount, we are happy to talk. If we don’t think it’s right for you based on the size of the loan, we can point you to some alternative investment opportunities that might be more suitable.

Typically our loan agreements will cover the duration of the project, for example 18 months but maybe shorter e.g. 12 months, depending on at what stage the funds are required. The original capital sum with interest will be paid back at the end of the term.

Smart! Many people have been taking advantage of SIP pensions and are starting to do so with the newer and more flexible SSAS pension structures to channel their pension funds into property. This is a very effective way to enhance your pension fund and get significantly better returns. Obviously, this very much depends on your personal circumstances. Get in touch and we can point you to some experts in our network that specialise in these transactions so you can get some well qualified advice before going down this road.

The good news is that you don’t need specific knowledge as you are in expert hands on that score. You are welcome to meet us on site so we can show you around before you invest and in fact visit as often as you like to check on progress. Either way you will have our commitment to keep you informed regarding the progress of the development and in particular our success against key milestones and budgets. We also welcome your input into the design, development and marketing of the site.

We prefer a straightforward loan agreement based on a term and interest rate (see above). This will be a legally validated document which our lawyer can draft but we recommend that you seek your own legal advice of course. We can discuss secured (via a charge on assets) or unsecured loans depending on the size of investment you wish to make. We are open to consider Joint Venturing and equity share investments where the situation suits this approach.