HOW IT WORKS
As a property development and investment company, our experience has helped us perfect how to maximise returns by spotting the marginal gains which other property developers often miss.
We successfully transform property development opportunities into higher yields and margins on cost faster than many others in the industry. Our proven techniques allow us to achieve the maximum possible risk-adjusted return on all of our property development projects.
1 - IDENTIFY
Our process starts with the ability to discover opportunity. With our experienced team and intricate knowledge, our network enables us to filter through more than 500 properties every month before selecting up to 10 potential 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:
- Properties within easy walking distance (usually less than 10 minutes) of major universities in UK.
- Properties within easy walking distance (usually less than 10 minutes) of rapid public transport routes in UK.
- Properties others may have either overlooked or lacked the skills to fix, usually in need of refurbishment or development at exceptionally low prices.
- Areas undergoing significant improvements to transport, amenities and landscape.
2 - PURCHASE
Once 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 in UK and why we are one of the UK’s fastest growing property development and investment companies.
Browntree Properties 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 luxury 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.
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 that are worth more than we pay.
- 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.
3 - DEVELOP
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 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 element or that benefit from Permitted Development (PD) rights, simplifying planning permissions whilst applications are made to add more residential units.
We believe we are leaders amongst UK property developers in turning projects around fast and to the very highest standards (small projects within a matter of months and large-scale projects within 3 years owing to the intricacies of local planning requirements).
HOW WE IMPROVE A PROPERTY:
- Strip the property back to the bare bricks & joists.
- Strengthen structure and lay new flooring.
- Install the latest specification insulation and sound-proofing.
- Fit new electrics, plumbing and gas services.
- Build new apartments, bathrooms, bedrooms and open-plan living spaces.
- Plaster, paint and furnish the entire property to a high specification.
4 - MANAGE
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 in UK 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.
- Deliver high levels of customer service 7 days a week.
5 - GAIN
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.
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.
Investors with Browntree Properties can expect to receive their initial investment plus final share of the profits within two to three years. We are often able to return a proportion of this much earlier, however, by completing and refinancing/selling of the property development in stages.
No investment of any nature can be guaranteed, but we can transparently state that we have consistently delivered exceptionally high returns and are able to provide personal/corporate guarantees to add security to our investments. Our exceptionally exciting pipeline of projects include both residential and commercial investment opportunities that many property developers in UK 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 work needs 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.
WHY IT WORKS
1 - EXPERIENCE
- Our strategy drives the largest returns and we use our most valuable asset – a proven track record – to achieve the most profitable results.
- Over the last 15 years, we’ve dedicated ourselves to residential property investment.
- Over the last 5 years we have 5 folded our income and assets The result is a seamlessly cohesive, efficient and consistently profitable operation.
- Today, our margins on cost typically double between initial forecast and project completion.
- Our forecasts remain conservative, always based on detailed comparable research from recently sold and marketed properties, completed by our highly knowledgeable and respected team.
2 - EFFICIENCY
- We negotiate successfully to secure the best prices, but offer quick, reliable payments and high levels of repeat business: a compelling win-win proposition for our agents and suppliers.
- We have our in house team of builders and plumbers and we work with honest, reputable contractors and regularly incorporate their suggestions into our on-going best practice.
- We go out of our way to source higher quality, innovative components, including factory seconds restored to immaculate condition to boost standards without increasing costs.
- Our integrated construction and property rental brand provide reliable and effective services tailormade to complement our process.
- We work fast, we work smart and we make money work hard.
3 - CONTACTS
- It’s not what you know, it’s who you know. Browntree Properties knows both.
- Knowledge and speed of action are key ingredients for successful residential property
investment. A decade of reliable business has given us a network of contacts that regularly benefit us with new opportunities.
- Our superb relationships and reputation with banks, brokers, investors and funds means we can access finance quickly.
4 - HARD WORK
- We have the knowledge, the contacts, the expertise, the efficiency and the financial models. Yet, what brings each critical piece together is good old-fashioned hard work.
- Our investment team sifts through thousands of properties and visits hundreds of sites to identify the best residential property developments on the market – as well as those not yet advertised.
- In addition, our research team focuses on economic, financial and property market
fundamentals, consistently leading us to the most in-demand property acquisitions.
- When we’re not on site talking to project teams and investors, we’re out there negotiating on materials, accompanying prospective tenants on viewings or networking to expand our contact base.
INTERESTED IN OUR WORK MODEL?
We offer a number of opportunities aimed at both institutional and private investors. Simply complete the form below and a member of the team will get in touch.