Invest now and grow your property portfolio
09/04/18 by GARETH BAIN
Investing
WHAT INVESTMENT OPPORTUNITIES DO SHOJIN PROPERTY PARTNERS OFFER INVESTORS?
Shojin Property Partners is a crowdfunding property investment company that offers superior UK investment opportunities directly to investors. Shojin offers a variety of investment products to suit your property investing needs - whether it is a hands-free buy to let investment or the more potentially lucrative property development projects. This blog article will take you through the various investment opportunities in the UK offered by Shojin and help you in your decision to find the best property investment suitable for you.
BUY TO LET INVESTMENT
Shojin offers three types of buy to let investment products with different characteristics to meet your investment preferences.
Buy to Let: Standard – Income and Capital Growth – Variable return: This is a great product for those who want to invest in a buy to let but without the headache. You will receive a running income (after expenses) plus a share of any profits when the property is sold. Typically, this investment opportunity is targeted to deliver 4% - 6% annual income and 3% - 6% annual capital growth. Overall a blended return of 7% - 12% per annum over 5 years.
Buy to Let: Capital Growth (Equity) – Variable return: This product is most suited to higher rate taxpayers who are looking to build a property portfolio. They prefer not to receive regular income but to benefit from capital growth and make use of their annual capital gains tax allowance. This buy to let investment is attractive to those who want capital growth rather than regular income. Typically, this is targeted to deliver 9% - 12% per annum over 5 years.
Buy to Let: Income only (Mezzanine) Fixed return: This product is best suited for lower rate taxpayers who prefer regular income over capital growth. This investment type is typically secured by a second charge against the property and is a lower risk compared to the other buy to let investments. Here investors will receive fixed quarterly income but none of any future capital growth on the property. Typically, this investment opportunity delivers a targeted 4% - 6% annual income and 3% - 6% annual capital growth. Overall this delivers a blended targeted return of 7% - 12% per annum for 5 years. If you are looking to build a buy to let portfolio click buy to let investments.
BRIDGE LOAN INVESTMENT
What is a Bridge loan? A bridge loan in an investment that typically runs for between 3 – 9 months and is often used to provide short term funding for property developers before the main development funding is put in place. The loan will be secured by a first charge against the property. Bridge loan investors generally can expect to receive 8-12% per annum.
For example, a property developer may require bridging finance when it purchases a property and seeks then to apply for planning permission. The developer would take a bridge loan to cover its costs during the planning period. Once the planning permission is granted, the project would be worth more and the developer would usually refinance with lower cost development funding or sell the site at a profit.
If you are interested in becoming a bridge loan investor click here for more information.
MEZZANINE LOAN INVESTMENT
What are Mezzanine loans? A Mezzanine loan provides a layer of funding to fill the gap between the senior lender (a bank) and the equity investment. They are generally used by property developers who need additional capital for a project but do not want to give away equity (profit share). This is typically a fixed return investment and secured by a second charge against the property. The returns offered on a Mezzanine investment typically range between 14% - 18% per annum. Click mezzanine loans to find out how this product works.
DEVELOPMENT EQUITY INVESTMENT
What is development equity? Development equity is the funds which sit at the base of the capital structure, after the senior lender (a bank), Bridge and Mezzanine loans. This investment type entitles investors to a share of the profits in a property development project, however comes with the highest risk. Shojin specialises in development funding, and this is its core investment product. Every project is unique, but projects typically require funding at one of the following three stages in the development process.
Planning Approved: Projects with planning permission granted are simpler and less risky because there is low/no planning risk involved. Returns here can typically be between 18% - 22% per annum. Investors should be aware there may be unknown risks due to each project being unique.
Planning Enhancement: This is where a piece of land has the benefit of a planning permission but there is an opportunity to enhance the planning permission and create further value in the site. Whenever there is the opportunity to enhance planning there is also the risk that it might not be achieved however Shojin would look to mitigate this possibility. However, the upside of securing enhanced planning can be profitable and investors can typically earn roughly 23% - 27% per annum. The higher return is balanced against the risk that in the event that enhanced planning is not approved, an investor may be left with a lower return.
New Planning: This is where a piece of land does not yet have any planning permission for development, but it has the potential to get planning due to its location and likelihood to be accepted for redevelopment. Shojin carry out extensive due diligence and only pursue schemes that it feels have a strong possibility of achieving planning permission. However, this is never guaranteed as there are many moving parts involved in property development. The risk on new planning projects are high, however the returns would compensate for this as they can be as high as 28% - 35% per annum. Click development equity investment to find out how this product works.
Each project has its own risks and investors should read the Project Documents carefully to make sure that they understand the risks associated with each project. To find out more about property investment and building a property portfolio view the products page or register online and view our track record of property investment opportunities and the projects currently open for investment.
Shojin Property Partners is a crowdfunding property investment company that offers superior UK investment opportunities directly to investors. Shojin offers a variety of investment products to suit your property investing needs - whether it is a hands-free buy to let investment or the more potentially lucrative property development projects. This blog article will take you through the various investment opportunities in the UK offered by Shojin and help you in your decision to find the best property investment suitable for you.
BUY TO LET INVESTMENT
Shojin offers three types of buy to let investment products with different characteristics to meet your investment preferences.
Buy to Let: Standard – Income and Capital Growth – Variable return: This is a great product for those who want to invest in a buy to let but without the headache. You will receive a running income (after expenses) plus a share of any profits when the property is sold. Typically, this investment opportunity is targeted to deliver 4% - 6% annual income and 3% - 6% annual capital growth. Overall a blended return of 7% - 12% per annum over 5 years.
Buy to Let: Capital Growth (Equity) – Variable return: This product is most suited to higher rate taxpayers who are looking to build a property portfolio. They prefer not to receive regular income but to benefit from capital growth and make use of their annual capital gains tax allowance. This buy to let investment is attractive to those who want capital growth rather than regular income. Typically, this is targeted to deliver 9% - 12% per annum over 5 years.
Buy to Let: Income only (Mezzanine) Fixed return: This product is best suited for lower rate taxpayers who prefer regular income over capital growth. This investment type is typically secured by a second charge against the property and is a lower risk compared to the other buy to let investments. Here investors will receive fixed quarterly income but none of any future capital growth on the property. Typically, this investment opportunity delivers a targeted 4% - 6% annual income and 3% - 6% annual capital growth. Overall this delivers a blended targeted return of 7% - 12% per annum for 5 years. If you are looking to build a buy to let portfolio click buy to let investments.
BRIDGE LOAN INVESTMENT
What is a Bridge loan? A bridge loan in an investment that typically runs for between 3 – 9 months and is often used to provide short term funding for property developers before the main development funding is put in place. The loan will be secured by a first charge against the property. Bridge loan investors generally can expect to receive 8-12% per annum.
For example, a property developer may require bridging finance when it purchases a property and seeks then to apply for planning permission. The developer would take a bridge loan to cover its costs during the planning period. Once the planning permission is granted, the project would be worth more and the developer would usually refinance with lower cost development funding or sell the site at a profit.
If you are interested in becoming a bridge loan investor click here for more information.
MEZZANINE LOAN INVESTMENT
What are Mezzanine loans? A Mezzanine loan provides a layer of funding to fill the gap between the senior lender (a bank) and the equity investment. They are generally used by property developers who need additional capital for a project but do not want to give away equity (profit share). This is typically a fixed return investment and secured by a second charge against the property. The returns offered on a Mezzanine investment typically range between 14% - 18% per annum. Click mezzanine loans to find out how this product works.
DEVELOPMENT EQUITY INVESTMENT
What is development equity? Development equity is the funds which sit at the base of the capital structure, after the senior lender (a bank), Bridge and Mezzanine loans. This investment type entitles investors to a share of the profits in a property development project, however comes with the highest risk. Shojin specialises in development funding, and this is its core investment product. Every project is unique, but projects typically require funding at one of the following three stages in the development process.
Planning Approved: Projects with planning permission granted are simpler and less risky because there is low/no planning risk involved. Returns here can typically be between 18% - 22% per annum. Investors should be aware there may be unknown risks due to each project being unique.
Planning Enhancement: This is where a piece of land has the benefit of a planning permission but there is an opportunity to enhance the planning permission and create further value in the site. Whenever there is the opportunity to enhance planning there is also the risk that it might not be achieved however Shojin would look to mitigate this possibility. However, the upside of securing enhanced planning can be profitable and investors can typically earn roughly 23% - 27% per annum. The higher return is balanced against the risk that in the event that enhanced planning is not approved, an investor may be left with a lower return.
New Planning: This is where a piece of land does not yet have any planning permission for development, but it has the potential to get planning due to its location and likelihood to be accepted for redevelopment. Shojin carry out extensive due diligence and only pursue schemes that it feels have a strong possibility of achieving planning permission. However, this is never guaranteed as there are many moving parts involved in property development. The risk on new planning projects are high, however the returns would compensate for this as they can be as high as 28% - 35% per annum. Click development equity investment to find out how this product works.
Each project has its own risks and investors should read the Project Documents carefully to make sure that they understand the risks associated with each project. To find out more about property investment and building a property portfolio view the products page or register online and view our track record of property investment opportunities and the projects currently open for investment.