Whilst there are various factors that could come into play and have an effect on the property market and demand for new dwellings in the longer term, we are choosing to play it day by day and deal with what is on our desk. At the moment our whole team is flat chat, possibly the busiest we have been in many months, or longer.
1. What is borrower activity like?
Most of the projects we are actively funding this week were likely decided upon many weeks or more likely months prior to this week and them needing funding. In my regular chats with clients over the past 5-7 business days, I have seen a constant theme that they are salivating at the chance to buy more sites in the upcoming craziness. Disruptions like this create opportunity, mainly off the back of the less experienced developers getting nervous and pulling up stumps on a project, or seller’s high expectations getting a dose of reality and the buyer now having the power in negotiations.
2. What are lenders doing?
We haven’t seen any lenders pull out of deals that we are privy too. We have been contacted by three private lenders to say that they are temporarily on hold as their attention is waiting to buy undervalued stocks and so reallocating their funds to buy the potentially rising market once/if the hysteria subsides, but the purist property lenders seem to be business as usual which is great to see. We have 160 lenders on our panel and plenty of money trying to find a home.
Also good to see many settlements happening on projects at completion, we had 11 settle across 3 days in a townhouse project we funded, and not one settlement skipped a beat with all settling on the proposed date and time scheduled. Hopefully that continues.
3. What is investor appetite like?
Very strong, we raised and settled $9.3mil last week, which is our biggest contributory raise to date, only to then be outdone by a raise yesterday of $10.5mil and another $2.5mil today. It seems the boring 8.5%pa returns on offer are now very attractive compared to a turbulent equities roller-coaster. We have 3 more 1st mortgage loans lined up for next week totalling over $12mil, so now is the ideal time to sign up and get alerts on our investor opportunities Click here to register interest.
4. Is it really business as usual?
We are taking it very seriously and the above positivity isn’t to say we think all is fine, we adopted early to social distancing and letting our team work from home (although because we have a right laugh in the office many still wanted to attend daily) we have been doing meetings via zoom or phone rather than face to face. We have also set up an ExpressFUND portal on our website so that people can still fund their projects in the new social distancing world. With 1 submission, your loan will be presented to the 3 most suited lenders from our 160 strong panel and then we provide you with those term sheets. Simple, streamlined and handshake/contact-free. To submit your project today, check out our website here.
If you have any further questions about what the market will look like for funding your project, please feel free to call me or one of the team anytime.