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Sources of Raising Equity Finance for Property Development

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Global capital
Sources of Raising Equity Finance for Property Development

Financing a residential or commercial property development project with the right source of equity finance is essential because it has a great impact on the availability of cash to support the initial investment, cash flow through construction phase and ultimately the profitability of the development project itself.  

Some of the sources of raising equity finance for property development are as follows: 

  1. Joint Venture:  

Many property developers are not sure about how they should invest their money for the best return.  Joint venture investing gives you above average returns is a popular way to use money for property development projects. 

Joint Venture for Property Development is a very good source of raising equity finance with minimum risk. It is a form of private equity investment where a business obtains long-term finance in exchange for a share of its equity. This type of investments is made by the new businesses or start-ups that have high growth potential. The companies use this to expand fund management to develop new products.

  1. Crowd Funding:  

Crowd funding is getting more and more popular where a number of people invest, contribute or lend for business plans with limited finances. Raising equity from banks is very much expensive and difficult. Property crowd funding allows the individuals to invest equity into property development with established small and medium sized developers. 

Following are the benefits of crowd funding for property development:   

  • Projected Returns  

Equity investments are linked with the overall profit generated by the property development. Many investors look for the opportunities where they must invest their money for getting a share in return and receive a reasonable return on investment. In crowd funding projects anyone can invest money and get 10% return on investment.  

  • Invest alongside institutional and professional investors  

One of the benefits of property crowd funding is that investors typically invest alongside and on the same terms as institutional and professional investors. They provide investors with additional comfort over the quality of investment opportunities.  

  • Social benefits 

 Crowd funding has made property investment more accessible for everyday investors by decreasing the minimum investment amount. It provides an opportunity for the individuals to diversify their property investment portfolio by project, time and location that helps to reduce their overall investment risk. 

  1. Re-Mortgaging:

As having personal cash reserves are very rare, property investors look at the alternative sources of funding with the most common route being a re-mortgage on existing property.  Re-mortgaging is an opportunity available only for the property investors who have built up a substantial amount of equity in their home or other property. This will help the owner by allowing substantial equity so that he can use it for alternative purposes, for example property development. 

  1. Angel Investors: 

 Angel investors are private individuals who invest in young and start-up companies with good growth prospects in exchange for a share of the company’s equity. They are free to make investment decisions very quickly and specialize in particular industrial sectors. 

To know more about Joint Venture for Property Development, you must contact Global Capital Commercial. They have proven a good track record of arranging private equity and joint venture participation for the suitable projects. Contact us today for more insights!
For more information of  Take Out Finance and Commercial Property SMSF Finance visit here : https://www.globalcapital.com.au/

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