The Client’s Initial Challenge:
We were recently approached by a client who was a first-time property developer. They had identified a site they were eager to develop but through our early-stage analysis, we identified that the project lacked the necessary profit margin to make it a viable investment for the client.
Rather than push forward with a deal that wouldn’t serve the client’s best interests, we explained the potential risks to the client and their broker. Determined to pursue their first development, the client found a new opportunity – a single three-bedroom detached home in Farham, with stronger ROI.
The Magnet Capital Approach:
Now that the client had secured a more suitable site, for a first-time property developer, we were able to proceed with their development finance loan.
Working closely with the client, we structured a tailored 12-month loan facility, covering 55% of the GDV (plus rolled-up interest), 100% of the build costs, and 50% of the day-one purchase amount, with a total loan facility of £275,000 and a day-one loan amount of £75,000.
The Power of Partnership:
Magnet Capital director, Ashley Ilsen said:
“By identifying potential issues in the client’s initial project and guiding them toward a more viable project, we helped them secure a site better suited to their experience.
The three-bedroom family home was completed within nine months, with tranches drawn down within 24 hours of our valuers’ inspection.
The property is currently on the market for £625,000 and the client is now NHBC accredited – a testament to the success of their first development project.“
If you’re a first-time property developer looking for support with yor next project and require a strategic funding solution – contact us on 020 8075 3255 or hello@magnetcapital.co.uk.
