This is because they’ll want you to ride out any bumps in the road and still walk away with a healthy profit. And if you’re wondering if I really said that it’s possible to make £200k profit by investing just £12k of your own money, then you’ve read correctly. In terms of timescales, you’d expect a typical small-scale development to take around 18-24 months to complete, so the pay back is much quicker than with other forms of property investment.
Where can you find these commercial lenders? Most operate via a broker network which is great news for you, as it means your broker will be doing all the legwork to find you a lender. Lenders look at three key things when they assess a deal; can the deal produce a 20%+ profit, are your professional team up to the job, and only then will they look at you the developer. Not all lenders work with novice developers however many will, and your broker will find them. You’re actually far less important than the deal itself, so don’t worry if you’re credit rating isn’t perfect; just make sure you tell your broker everything, warts and all.