Gearing

Gearing "all successful property developers are highly geared"

Gearing Up for Property Development Finance
Property developers can choose to invest all their capital or equity into a small development, or to "gear up" and borrow more to build a larger development - or several smaller developments - to increase profits and spread risk. Gearing is simply the ratio of debt to equity. Accountants advise their property developer clients to gear up due to the following advantages: Maximise the return on capital Release capital tied up in unsold properties Spread risk over more development projects Establish a credit line with new lenders Stop losing good sites to rival property developers Start new projects quicker To illustrate the potential difference that gearing can make in property development, we have shown 2 examples below.
Property Development with Low Gearing	Property Development with High Gearing
Burke invests £200,000 in a property development of 1 house with GDV of £600,000. Result: Gross Profit Margin = 33% Return on Capital = 75%	Brain invests £200,000 in a property development of 6 houses with GDV of £3,000,000. Result: Gross Profit Margin = 33% Return on Capital = 275%

NEW Development Finance Product - April 2011
up to 100% of Development Costs Loan size £0.5m - £3m Houses & bungalows - no flats Situated within 110 miles of M25 NO PROFIT SHARE!


SALUTE THE MESSENGER (Customer Testimonials)
"When we were looking for property development finance, Dave Messenger stood out head and shoulders above the rest. Always available for advice and quick turnaround, which is vital in the property market.” JC, Bristol - February 2011 “I have dealt with many people who profess to obtain development finance and indeed used many. Dave Messenger is without doubt the best. He actually cares about you, the deal and not just the commission. I highly recommend” NR, Dorset "Dave Messenger understands property development finance inside out. I give him my 'fag packet' calculations and he will get a complete financial appraisal and offer of finance on my desk - usually within 24 hours, That's what I call outstanding service!" ND, Dorset "When our usual lender withdrew their offer, they recommended Dave Messenger. He arranged property development finance of £4.6m at 85% of costs - on amazing terms" B Property Group, Herts "Dave Messenger has been my trusted financial adviser for over 15 years, through good times and bad. He has financed several property developments for me, on terms that my own bank couldn't match. I wouldn't use anyone else for property & development finance." BH, Weymouth "We had an offer of 100% property development finance with a JV lender. Dave Messenger introduced us to an alternative property lender who did not take a profit share, saving us over £80,000. Great deal - thanks." CB, Dorset "We had just built a block of flats and needed to raise some cash to purchase our next site. When our bank wouldn't help, Dave Messenger arranged a fast property refinance to 70%. Dave has proved his worth and has since found us many new property & development lenders." JP, Bournemouth "We put a property development finance deal to our usual lender, who turned it down. When a property developer friend recommended his broker to us, we were a bit sceptical, but were reassured by Dave's expertise and enthusiasm. The next day Dave phoned us back to say he'd put the same deal to our lender - and they had now decided to do it! Dave is now our first choice for property & development finance." E Homes, SW7 "We wanted to refinance our portfolio of 34 properties. When our bank refused to increase our facility, our solicitor recommended Dave Messenger. He arranged the property finance we needed and made it so simple. We'll definitely use him again." JP, WC1 "We wanted to raise cash quickly and shopped around for best terms. We instructed David Messenger, who arranged bridging finance of £850,000 in a few days." JS, Birmingham "We know colleagues who have paid up-front fees to other brokers, only to be let down and out of pocket. Dave has arranged all our property & development finance for the last 5 years - he has never asked us for up-front fees and has never let us down." EH, Bournemouth "We've tried several lenders and brokers in the past, but they often promised us finance which never materialised, Our accountant recommended Dave Messenger, who has arranged some great property development finance deals for us. No more empty promises - cheers!" TP, Basingstoke "Before I was recommended to Dave Messenger, I used other property lenders and brokers, and was fed up with poor service and hidden fees. I am delighted to say Dave's service is superb I get fast, accurate quotes and no more hidden fees!" JO, Weymouth "We needed to buy an industrial unit to expand, but with no trading accounts our bank wouldn't help. Dave quickly arranged 80% commercial owner-occupier property finance no problem." JB, Poole "My bank insisted on me having a repayment mortgage over 10 years, but the repayments were not affordable. David explained the option of interest-only for commercial owner-occupier property finance, which I agreed with. He arranged it all and reduced my payments greatly." UM, Branksome

WARNING: GEARING SERIOUSLY INCREASES YOUR PROFITS!

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