What does project finance entail
In retrospect, the credit crunch from 2008 to 2014 proved to be a good starting point for real estate projects. The corona crisis will also cause economic bad weather, but at the end of the day, people still need to live. With project finance, you can capitalise on the housing shortage that will persist even during the crisis years.
Buying a property and transforming it to another use is a project in itself. Then we are not just talking about planning the conversion and applying for the permits. Financing this does not consist of bite-sized chunks either.
Borrowing to buy a property is manageable. But if the investment is multi-faceted, it is more difficult for banks to assess the feasibility of the investor's vision. That can be a problem, but we work with banks that have made this their mission. And we know how to get you financing.
What is project finance?
To buy an investment property, you can take out a mortgage and then rent out the property. These are often properties that are already zoned residential. You can also take a bigger approach and therefore benefit more financially. For example, you buy a former shop building and you will change the destination and turn it into several flats. The advantage is that you can often buy a shop building at a low price.
Transforming a property with little future into a solution
You can make money by taking a critical look at where there is a need and where there is a surplus. Physical shops are struggling, so there is less interest in opening a new shop. As a result, there is a surplus of retail premises, especially in locations outside shopping centres. Landlords recognise that letting is becoming difficult, so they are open to selling at a reasonable purchase price.
Understanding project finance is a plus
Putting together a roadmap is important when you get into a project. Before you buy a property, you actually need to know what the project will look like, what the schedule is and what it will cost you in total investment. Especially the latter is important, because it has to be commercially interesting, of course.
We can help you get started and make sure you get off to a flying start. We work with banks that know what they are talking about. These include banks such as NIBC, Domivest and RNHB. These banks focus on financing properties bought for rent.
Would you like to know more about the possibilities? We will be happy to update you and think through the opportunities and pitfalls with you.
