PROPERTY ACQUISITIONS AND DEVELOPMENT
Our process starts with the ability to discover opportunity. With our experienced team and intricate knowledge, our network enables us to filter through an abundance of properties every month before selecting the most viable developments for detailed due diligence.
Our financial models are highly detailed which highlight our expected level of return and the potential risk involved – a cap we strictly adhere to.
WHAT WE LOOK FOR
Areas undergoing significant improvements to transport, amenities and landscape.
Properties within easy walking distance (usually less than 10 minutes) of rapid public transport routes.
Properties others may have either overlooked or lacked the skills to complete, usually in need of refurbishment or development at exceptionally low prices.
Once an investor has agreed upon a project, we are able to move incredibly quickly which is what provides us with such a competitive edge over most property developers.
Barc Homes purchase properties via dedicated SPV’s (Special Purpose Vehicles). The structure reflects the agreed profit share, with investor funds covering immediate upfront expenses such as the initial loan and building works.
As with most property developers, we tend to refinance our developments at preferential rates through traditional finance once the first few units are built or once detailed planning has been passed and substantial value has been added.
Investors are involved on a fixed return or profit share basis.
We also joint venture with 3rd party property developers, allowing us to take on larger projects in addition to purchasing outright or provide funding for smaller projects.
HOW WE MINIMISE OUTLAY
Buying properties and land that are below market value
Phasing building works efficiently and completing them quickly
Pre-selling/letting units with substantial advance payments
Refinancing as soon as they are consented or completed and let
DESIGN AND BUILD
We have a respected track record of our ability to strip properties back at a high speed and re-build them in a uniquely efficient format. Space is created,technologies are installed and the price per square foot inevitably increases to boost the resale value of the unit and interim rental yields.
We focus on properties with an existing residential or commercial element or that benefit from Permitted Development (PD) rights, simplifying planning permissions whilst applications are made to add more residential units or commercial space.
by pre-selling/letting properties and collecting payments in advance
We always structure our investments to be as tax efficient as possible, utilising tax breaks such as entrepreneurs’ relief.
Before we sell a completed development we rent it to optimise its profitability, using a unique model to achieve greater rental returns with a lower risk of vacancy, default or damage that many property developers experience.
HOW WE ACHIEVE HIGH YIELDS
Finish properties to a very high standard
Employ flexible pricing structures
Offer discounts for advance payments (half yearly or yearly for example)
Review pricing to constantly achieve the optimum balance of occupancy and price
Promote properties in the right way to the right target market
Different levels of risk offer varying returns, with margins normally on cost in excess of 25% for refurbishments, 35% for construction and 45% for planning.
Investors fund the deposit, purchase costs such as legal fees and stamp duty, and initial build and debt servicing costs. In return they receive a priority return (paid on a pro-rata basis as required) plus a share of the remaining profits – weighted in our favour if we are paying a higher priority return or if we are required to guarantee the debt package – we approach each deal on a case by case basis.
In the fixed return model the investor receives returns with the benefit of a second charge on the asset(s) we acquire for them. The fixed return varies depending on the level of risk. Full planning/development risk attracts a higher return than simple investment risk in income producing assets.
No investment of any nature can be guaranteed, but we can transparently state that we have consistently delivered exceptionally high returns to our investors and are able to provide personal/corporate guarantees to add security to our investments.
Our exceptionally exciting pipeline of projects includes investment opportunities that many property developers would gladly add to their own portfolios.
HOW WE CATEGORISE RISK
Refurbishment: the property is tired and needs to be brought up to date in order to achieve its optimum capital and rental value
Construction: planning permission is in place but the building works need to be completed
Planning: the property is either a vacant site or an obsolete building which needs a change of use or wholesale re-development and so requires planning permission