Aug 24 2020 38 mins
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IN THIS EPISODE
Your podcast hosts Matt Harris of MiRentCo London and Jamie Madill of Jamie Madill Property take a deep dive into investor compliance and the key things you need to be aware of when starting to work with prospective investors.
From FCA Regulations to the difference between joint venture & loan agreement, if you’re about to start working with your first investor then this episode of The HMO Experience Property Podcast is definitely one for you.
EPISODE HIGHLIGHTS
Introduction [00:00 – 05:32]
Types of Investors & How You can Work With Them [05:32 – 13:00]
Your Investor Checks and Documentation [13:00 – 16:45]
Types of Security You Can Offer for Funding [16:45 – 22:10]
Structuring Your Joint Ventures [22:10 – 34:27]
#JLC - Jamies Last Comment - [34:27 – 38:16]
KEY TAKEAWAYS
- Working with funds from third parties is a regulated activity in the UK overseen by the FCA. Check out their website www.fca.org
- Unsophisticated lenders are limited to loan arrangements in the UK. This is because it is generally accepted that the concept of a loan is widely understand.
- Sophisticated lenders can enter into profit share arrangements because it is generally accepted that they have a greater understanding of risk and reward as well as loan arrangements
- When entering into any financial arrangement it is hight recommended that it is correctly documented just in case things go wrong. The cost of not having an appropriate legal document to cover most eventualities could run into the hundreds of thousands of pounds. Get a solicitor to do this for you.
- Most private lenders will want security in place in the event that the loan defaults. If you are also taking our bank lending then a first charge won’t be available. Alternative security could be offered in the form of a restriction, 2nd charge or personal guarantee
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