Yes.
But obviously, you will need a highly specialized set of development skills like the guys in this thread.👇
Breaking down real estate developments & the capital stack.
It will include 2 commercial units on the ground level and 22 residential apartments divided into four 1 beds, eight 2 beds & ten 3 beds.
What makes up the gross development value (GDV)?
The revenue comes from...
• 22 residential units @ avg price £954,545
• 2 commercial units @ avg price £875,472
• additional income from car spaces & freehold income
Developments have 4 major costs involved in the process, they are:
• site acquisition costs
• construction costs
• finance costs
• sales costs
Breakdown. 👇
That is a lot of money to make over 24 months!
But the question is how did they achieve a 361% return?
In plain English, many parters getting involved means leverage for the developer and profits for all parties involved.
This is an equity/debt hybrid with a mixture of modest downside protection & equity-like returns.
Gross mezz exits @ 81.0% of GDV in this case.
These investment tranches complete the borrowed capital.
They invested over a million £1.1m into the deal — paying for architect designs, planning permission, building permit, option on the site & other out of pocket costs — make their capital stack position a higher risk, very high return.
Since our family personally does not have these high-end skills & connections, co-investing alongside sponsors such as these make complete sense.
With a fantastic return of 18% p.a., compounded monthly as passive investors.
However, we didn't have to do any work, we were completely passive & we didn't leverage our investment nor have recourse loans / personal guarantees.
More questions? Reach out @ theatlasinvestor.com