Most sectors have words and phrases that may be unfamiliar. Some more than others.
We’re all about legitimacy, honesty and transparency. So, given that knowledge and understanding will help you make an informed decision, JLH has created a jargon-buster page. We want you to feel entirely comfortable with the whole process.
You may come across plenty of strange acronyms and words you’ve not heard of in the world of property investment and development. As a sophisticated investor, perhaps you’re already familiar with a few.
But, for completeness, we’ve set out a list of the ones most likely to cross your path.
Have we missed anything you’re not sure about? Or, do you need more information about a specific subject? No problem, get in touch using our contact form down below to find out more.
Normally referring to the first day you can draw down on senior lending funds. This may be for development finance, a mortgage or for re-financing.
A stake in the property under a joint venture (JV) structure, although you may not own it. The exit strategy here may be resale or refinance.
The way that the development project pays out and/or moves forward after the property has been constructed.
For sale: a lump sum cash payment upon the completion of the sale
For rental: repayment upon re-finance and then regular cash inflows from rental payments (tenants or social housing providers)
The registration of a loan against a property’s title is referred to as a ‘charge’.
Here, it will be the lender’s highest and main priority, which takes precedence over the other lenders. In other words, who the lender pays back first.
A secured loan, but one which has less precedence than a first charge. In other words, the first charge lender will get their money first.
The estimated total value of a property development project when it’s been completed. We calculate this using the projected market value of all the individual units within a development, factoring in rental income, sale price etc.
The total area of a building’s interior, measured from the inside of the walls at each floor level.
You may here to term, “property to hold”. It means literally holding onto a property for rental purposes – ideally for longevity and longer-term cash flow.
House of Multiple Occupancy. A term referring to residential properties where there are common areas shared by more than one household.
In property development a JV is a partnership between two or more parties to work together on a project. Almost always, this would exist inside its own SPV structure.
An important metric that lenders use to assess the risk of a loan. It represents the percentage of the loan compared to the assessed value of the property. A low LTV indicates a lower risk for lenders.
Permission to develop a property (in JLH’s case a commercial to residential property) that generally will not require planning permission from the local authority.
Mostly set up as a limited company, this is a general name for a legal entity that we can create for a defined, shared purpose – in this case for purchasing and holding residential buy-to-lets or converting properties for re-sale i.e. trading properties. Any property bought is held within the limited company.
In our view, sound acquisition in bricks and mortar is one of the best and most reliable ways to invest.
There’s no one-size-fits-all investment structure. There are discussions to be had. And, decisions to be made. All our deals are tailored, so contact us. Let’s talk.
