Working with quality developer clients, MMG actively source and negotiate terms for bespoke, competitively priced, residential development and mezzanine funding, from positive thinking lenders. “Best terms, from best lenders, exist for best schemes”.
Knowing the market and in particular which lenders are hungry to lend at any given time is key. We have a dedicated research team managing this. It's a highly specialised function requiring time, meticulous research and meetings…all of the stuff with which we know busy developers would rather not to be encumbered.
Developers increasingly find they've left themselves seriously financially exposed, when typically out of loyalty, having used their own bank as the senior funder for many years, the relationship inexorably reaches the end of the line. Not on our watch! We ensure there are always several potential funders available in the background. Initially there's no requirement for accounts or other such documentation and our "Incognito Service", where only numbers, usually in the form of a spreadsheet, are discussed with prospective lenders until the client is happy to move forward, agree terms and disclosure - ensures confidentiality.
The usual high street suspects (that are left in the game) are typically charging up to 3% over LIBOR, plus completion and exit fees of up to 2.5% for (on average) 60% gearing. Using our growing panel of lenders (including certain building societies with which we have exclusive relationships) gives developers access to up to 75% of both land acquisition and development costs, with no profit share, no exit fee, at C2% over base with a 1.5% completion fee.
Extra value added – yes, ‘another way’...
Marketing Loan Scheme
We have a lender that will fund up to 75% of the value of completed units, on a buy-to-let basis. Many developers are buying in their own remaining stock this way, to take advantage of rising rentals and to retain future capital growth potential. The product is penalty free so you could sell at any time.
Unlike most other lenders, this one doesn't restrict the number you can hold.
This scheme gets you off-site and therefore saves marketing costs and frees-up cash/profit early to enable you to move onto another scheme.
Shared Equity
With first time buyers and key workers struggling to obtain mortgages and to get a deposit together, we are working with developers to structure Shared Equity schemes for their sites. Here the developer retains a 25% equity stake of the newbuild and the buyer purchases the other 75%. We are able to fund this latter element with 100% mortgage finance - so the buyer doesn't need a deposit. Lenders are able to stretch income lending criteria because of the low, 75% borrowing. This also means the buyer gets a better interest rate on their mortgage so payments are lower, so less risk of default.
Site Sales
Our profesional associates feed us details of on/off market, nationwide potential development sites (with and without planning permission). We pass these on to our developer clients to sift through - see your bank doing that for you?
Mortgages For Site Sales
When it comes to arranging mortgages for your buyers, you may already use a local broker or the mortgage adviser in the estate agency that's selling for you. In reality neither come close to MMG's expertise in placing clients satisfactorily in the current climate. We place over a billion £s worth of mortgages each year and have direct access to the underwriters at many lenders. Our award winning consultants know who's still got a lending appetite and exactly where to get a fast result for you and your buyer.
Investor Opportunities
We have clients who get "to die for" opportunities, when timing for them might be all wrong. MMG are able to offer these opportunities out to our developer clients, to either invest in and/or, as with a current scheme in London NW1, take over the scheme for 15% off the GDV of £165m. Does your present lender ever do this for you?
Equity Funding
Working with our professional partners, we can construct a tax efficient investors package to fund quality developments, for experienced developers. We are currently leading such an arrangement in London NW8 no less.
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