“Often the most crucial information for potential investors is a reassurance that we share the risks along with the profits”
Freelands Property will normally arrange the direct funding of the first 50 to 75% of each transaction, leaving investors to fund the balance. This means that the company and its directors will be investing alongside external investors, sharing the risks, but more often the rewards…
Investor Options
We have purposely limited the detail provided within our website, primarily as the models and levels of return fluctuate with the market and on a project basis. To cater for different risk profiles, we have two main routes of investment, and within these three predominant options for the investment itself. Each of the options are detailed below, with examples of each available on request.
Term Loan
Our original and lowest risk investment, being a straightforward loan for an agreed period of time. This investment is most appealing to the hands off investor, taking a longer term viewing and benefiting from compounded returns over time. Our flexible approach means that we are happy to discuss rates and time-scale on an individual basis, though we do ask for a minimum term of 12 months and minimum investment of £10,000.
Project Loan
As the name suggests, funds are used solely for a specific project, or series of projects. We typically match the profile of the project with individuals and invite them to invest on a project basis. In practice, the loan would be requested prior to a formal offer on a project property and repaid on the completion of its sale.
The typical time frame would be 9 months, though it is possible to use the funds on two projects in one year, thus making the annualised returns very attractive. This arrangement is more appealing to those investors not able to commit for long periods or those with a desire to become involved in particular, and often larger, projects. The minimum investment we ask for is £25,000 with an estimated term of one year.*
*Please note that the term of the loan is usually determined by the project, thus an exact term cannot be defined. Please refer to other loan options and return options if you require a more specific term.
Freelands is happy to offer its investors with a choice of returns to suit all investment appetites. As you might expect, the lower the guaranteed element, the higher the potential overall return. The main options are detailed below, although, for larger investments in particular, we would be happy to agree specific terms individually.
1) Fixed (Guaranteed) Return
As the name suggests, investors can agree a fixed return on their investments. Whilst the returns are generally lower overall than the Fixed Return Plus or Full Profit Share options, they are designed for the more risk averse investor; usually those with less interest in the investment class. You can still expect to realise a significantly higher rate of return than most traditional low risk investments, such as deposit & savings accounts.
2) Fixed Return Plus
A compromise for those who want to benefit from the terrific returns that residential property can provide, but also the assurance that a fixed return will (at least) be provided. With the possibility of significantly higher returns, the Fixed Return Plus option has a lower fixed rate of return, but does offer a much broader upside, as projects are realised on target.
3) Full Profit share
With this investment option, there is no fixed return element, but neither is there any limit to what your investment might deliver. Instead, your returns are calculated as a percentage of the overall project cost and, once expenses and fees have been deducted, you will enjoy an equivalent percentage of the profits. For those who do not want to fully expose their funds, we are usually able to offer an option to protect the capital sum, in exchange for part of the otherwise realised profits.
4) Equity Purchase
In addition, there may also be opportunities to purchase an equity stake in the business bu invitation. Such equity investment opportunities are on an individual basis, and are likely to be offered only to long term partners, as a reward for a loyal and solid investment history.