An innovation in Property Development Investment
At Texmoore, we gather together expert in each field, from construction engineers, to developers and finally investors, to pursue high quality opportunities offering excellent prospects for safe, reliable and profitable return.
We pool together funding from a diverse range of sources, focussing primarily on our own cash reserves which are then topped up with contributions from institutions and individuals. Self certified sophisticated investors can contribute to a development’s funding from as little as £10,000-£20,000 while high net worth individuals benefit from more attractive returns with investments currently up to £2 million each.
Texmoore rigorously scrutinises and assesses each development opportunity, and our rejection rate is as high as 90% for projects that do not meet our high requirements for potential profit margin and safety. This gives our long standing funding stakeholders huge peace of mind because they know our interests are aligned in securing long term growth for the company, and pursuing only the most attractive proposals.
Investments take the form of convertible loan note and mezzanine loans which can offer regular income, and also private equity positions with returns payable upon exit. Time frames are typically estimated between 18 months and 3 years.
Texmoore’s approach differs from a basic loan, partnership or crowdfunding model in a number of ways:
- As a company with proficiency in specific sectors of real estate, we conduct the thorough due diligence on your behalf, including full cost projections, scenario planning and sensitivity analysis. We consider comparative projects on the market and use our experience to pursue only the best opportunities.
- At Texmoore, the vast majority of a project’s funding come directly from us. We use our accumulated profits to finance developments and our interests are fundamentally aligned with those of our investors. We underwriting every project, offering director’s guarantee, to ensure all financial and investment prerequisites are met.
- At Texmoore, we appointed an Independent Security Trustee to act in the interests of every third party funding client of the company. Our trustee is regulated by the Financial Conduct Authority (FCA) and has extensive experience of working with similar businesses to ourselves. Their role is to monitor our progress and business model to ensure that all stakeholders will be repaid in full with their profits and interest.
- Each investor is assigned to an Investor Relations Manager who is always available to answer questions and guide you throughout your time with us.
- Our in-house portfolio management iteam conducts appraisals throughout the entire life cycle of each development. They regularly visit sites, and analyse key variables of cost, time and quality against planned forecasts. They help to keep things on track and are a third eye over the projects as they progress.
- Transparency and clarity provided to investors on every aspect of the investment process and on each stage of every property development.
- Texmoore is a full member of a number of professional bodies in the UK which have the highest ethical standards. We spend a large amount of time to report to them. Our accreditation include full membership of the National Landlord’s Association, Residential Landlord’s Association, UK Government’s Deposit Guarantee Scheme and UK Social Housing Ombudsman.
start at £10-20K
Picking only the Right Property Development Opportunities
We are totally focussed on only pursuing the investment opportunities that meet our stringent filtering, planning and viability analysis and pass through the selection process getting ultimate approval from our investment boards.
This process begins with our Development Team finding new and exciting possible projects. Our team members regularly meet and chat with industry insiders about potential opportunities. When we are presented with an interesting concept or proposal, we produce a brief 50-70 page document outlining the key features which is then sent on to our partners in property acquisition, surveying, valuation, construction and finance and operations. They review the presentation from their own perspectives, and it is further refined and developed. Details are added and the analysts begin to construct some basic project management and finance models to understand the likely risk factors, probabilities and make initial profit estimates.
If we are considering a joint venture, our team conducts a thorough assessment of the developer’s track record and ability to deliver the specific project they have presented to us. We meet the development team, visit the project site and other completed projects, and assess the developer’s overall operations, background and experience. An initial stage of due diligence on the project itself also examines the business plan as well as the location, target market and saleability.
Our current investment strategy covers a range of project types, but mostly focuses on our key strengths; HMOs within social housing and student accommodation along with more typical commercial and residential housing. We have expanded our focus of Greater London right the way across the United Kingdom and we are well positioned to take advantage of small pockets of all around the country. We are typically not involved in luxury developments and choose to concentrate on delivering affordable, ethical housing, which benefits from huge demand and quick sales.
If the Origination Team is satisfied with the information gathered, the opportunity is presented to our first Investment Committee, made up of the company’s senior management team who have decades of combined property development experience.
Effective Due Diligence
If the opportunity passes review by the first Investment Committee, full due diligence begins.
Typically, we spend about one full month reviewing and analysing every aspect of the project in detail. This includes:
- Assessment of all risk factors relating to the construction;
- Full assessment of project costs.
- Full review by a registered quantity surveyor.
- Detailed scrutiny of the planning permission granted and full assessment by our legal team.
- Evaluation of the marketing environment, the target audience, demand and supply factors relevant in the local area, comparable properties. We assess and understand the required product positioning and market segment that we are building the property for. This can extend to a macro and industry forecast.
- The project’s financing arrangements and documentation;
- All existing legal documentation;
- The sensitivity of the project to unexpected changes in gross development value (GDV) or timescales; and
- experience, track record and financial and operational stability of any joint venture partners or contractors.
Our senior management team must be completely satisfied with each component of the project and sales plan. At this point, it will be passed to the second Investment Committee who will make the decision on whether to proceed with the project and give it the green flag. Only between 2-5% of proposals make it to this stage and they continue to scrutinised throughout the life cycle of the project.
Once the opportunity is approved by our final Investment Committee, our analysts’ research is summarised and presented to the management team that will oversee the project throughout its life cycle. Our aim is to ensure that the key team members have all the information they need to carry out their roles.
Those who choose to invest in any of our property investment opportunities can choose from a number of attractive possibilities. We are as flexible as possible to investors because we want them to choose the right option for them. Everybody’s personal circumstances are different and we value our funding partners. Therefore, we are as adaptable at the outset as possible.
Our projects are funded predominantly by ourselves but incorporate third party funding from individual investors in the form of convertible loan notes, mezzanine loans and even equity stakes. Our financial securities continuously evolve in response to the prevailing market conditions and we are at the forefront of offering innovative structures to suit everyone.
The Funding Structure
Typically, over half of the total development cost is provided by ourselves, with funds taken from accumulated project profits and cash reserves. A further 25% is then provided by a senior debt provider such as a bank or specialist property lender.
The remaining 25% is offered to individual investors in the form of a convertible loan note, mezzanine loan or private equity. There is no pecking order to the funding, everybody is on an equal footing with all loans secured as first legal change over the entire assets of the company.
Monitoring all Property Investment Projects
Once the project is underway, our portfolio managers closely monitor the development, they regularly visit sites and analyse key parameters every step of the way until the final unit is occupied by a tenant or sold.
Our teams speak daily to the contractors and development teams, we review finance structures regularly and monitor construction progress, whilst assessing the sales strategy to ensure we have positioned the product exactly right. All this information is compiled into regular reports which are shared with the senior management team.
Always Putting the Interests of Stakeholders First
By reading our website content, you can clearly observe our energy and passion for what we do. However, it is also clear how our stakeholders and investors are at the front of our minds throughout. Our comprehensive end-to-end approach both untangles the complexities of property development investment, and provides a unique level of assurance for our investors.
We help our funding partners every step of the way, from laying out the investment opportunities simply by the start, explaining our model and why it has been so successful, and in answering any questions throughout the process. Our security trustee, appointed to further act in the interest of investors is also regularly available to discuss with client their role and assessments of the company.
This all means that we have investors interests at heart. Our business model provides clients with the reassurance that we only pursue investment opportunities that we firmly and demonstrably believe in, delivered via an investor-focused approach that concentrates on helping you transform your investment potential into real returns.