Adavo Property Joint Ventures

8/7/2019 Adavo Property Joint Ventures

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Joint Ventures

ADAVO



IT’S TIME FOR BUSINESS.

2 I JOINT VENTURES WITh adaVO pROpERTy JOINT VENTURES WITh adaVO pROpERTy I 3



prestige

Adavo is a property investment partnership operating inthe UK multi-let property sector. We o er some o themost stable investments available today across any assetclass.

Our core strategy is simple. We buy at a discount, werenovate to add value and then rent room by room tomaximize the monthly income. A sound, clean businessmodel that is easy to understand.

At Adavo we strategically position our properties to leadthe market. Our ully renovated, ully urnished housesare in the top 5% o the market and command 95% plusoccupancy rates along with premium rents.

We use joint ventures to provide the nancing or eachpurchase and renovation. In order to match the standard

o the market leading properties Adavo delivers we haveproduced a simple, e ective joint venture agreement thatcarries a level o security and return quite unparalleled intoday’s market.

Each joint venture partner holds all title deeds as wellas the capital reserve. Adavo simply provides a turnkey property investment service.

7.5% Returnper C cle

Each joint venture is a simple 50:50 split o theequity pro t in each deal. Typically this equatesto a 7.5% return per 6 month cycle o purchase,renovation and sale. The return is paid at the endo each cycle.

Risk has been minimised at every stage o theinvestment design. The capital is held by the jointventure partner and is used to und the purchaseo a suitable property. Once purchased each houseis solely owned by the joint venture partner whichprotects your entire investment.

Our average joint venture agreement has a 3 yearterm and entails 6 property cycles. The minimuminvestment amount is £100,000 with maximumamount being capped at £1 million.

Each joint venture allows us to capitalise on theopportunities in the market given the restrictiono lending rom banks and mortgage lenders.

All our joint ventures are 100% capital securedand each one comes with a ull capital guarantee

rom Adavo Property.




p ssion

We believe in being passionate about what you do. AtAdavo we love property in all its shapes and sizes.

When you invest with Adavo, you are investing withpeople who care about the product we deliver and theservice we provide. Our aim is simple - to be worldclass.

To us world class means e ciency, e ectiveness and adesigned customer experience rom enquiry throughto re-investment.

It also means o ering the best products at the righttime to the largest possible market which makes thebusiness sustainable and secure. Our joint venturesplay a key part in this strategy.

Excellence

We are committed to excellence. Adavo is a process orientated business thatdrives standards through every part o our service. We have very exactingstandards that aim to position us ahead o the competition both in returns,security and service level.

Our business is rooted on strong oundations. Years o experience have re nedour business model to a point where we can consistently deliver results. Weuse each joint venture to capitalise on that talent.

Excellence to us at present is success ully providing steady, reliable returns. Itis showing a clear, transparent investment processes and strong operationalmanagement o risk. We believe Adavo provides this service.

JOINT VENTURES WITh adaVO pROpERTy I 76 I JOINT VENTURES WITh adaVO pROpERTy



Su l &

dem n

One o the oundations o our investment model is to go where the demand is. Theresidential property market in the UK enjoys remarkably stable demand across many sectors. The lack o supply o new housing stock will likely see this demand or rentalproperty increase over the next ew years.

In niche areas demand rom large scale employers, universities and hospitals urthersupports this high rental demand. There is a growing student population according toUCAS and this is expected to remain at a high level over the next decade.

The limited supply o land and sites restricts purpose-built student accommodationblocks and the government cannot nance large scale housing construction or key workers. With banks becoming ever more cautious in terms o their lending criteriathere is a present and growing market opportunity or rental stock.

Add to this the act we have a burgeoning under 35 population with little access tonance leaving rent as the only option to leave home and we have a solid case or stable

demand underpinning our high yield, income-producing properties.






Ex ecte Returns Our joint ventures are simple, transparent, and guaranteed.

Money is drawn down in accordance with the joint ventureagreement. Capital is held and signed o by each partnerwhich make the accounting trail clear and transparent.

The capital is solely used to fund the purchase & renovationo properties. The terms are outlined in the joint ventureagreement ensuring ull checks and balances are in place.

For all our joint ventures the property is owned outright by the JV partner who holds the title deeds. Adavo has a legalcharge placed over each asset to secure our 50% stake inthe equity o the deal. We then renovate the property (orproperties) in line with our well established business modeland standard speci cations. This undamentally increasesthe value o the asset.

Once complete each property is let and sold in accordancewith our business plan. We have a large investor databaseand enjoy substantial interest in all our properties due totheir high standard and multi-let income.

At the end o each cycle all original capital plus the return ispaid out. It is then the choice o each partner as to whetheryou wish to re-invest or move on.

how It Works3 ye r £150,000Joint Venture

2 ye r £300,000Joint Venture

3 ye r £100,000Joint Venture

Protection Secure & Gu r ntee Secure & Gu r ntee Secure & Gu r ntee

Term 36 Mont s 24 Mont s 36 Mont s

Purchase Range £110,000-£125,000 2 pro erties£110,000-£125,000 £70,000-£80,000

Renovation cost £20,000-£30,000 2 Renov tion costs£20,000-£30,000 £10,000-£20,000

Cycle 6 mont s 6 mont s 6 mont s

No. of Cycles 6 c cles 2 x 4 c cles 6 C cles

7.5% Return £11 ,250 per C c le £22 ,500 per C c le £7,500 per C c le

Return Paid En of E c C c le En of E c C c le En of E c C c le

Tax Status Return p i Gross Return p i Gross Return p i Gross

JV Financing

Property Conversion

InvestmentSale

£100,000 Market Value

20% Discount

£80,000Cash

Purchase

TitleDeeds

£115,000End Value

£20k/25k Margin

£10k/15k Cost

Property BoughtFor Cash

Renovations AverageCost £10/15k

Average Upli t10/15%

2/4 Weeks to Buy in Cash

4 Weeks toRenovate

4 Weeks to Sell(pre-ordered)

£115,000 End Value

Timescale




The most common question we are asked is “How protectedis my money?” The protection we o er is exceptional andgoes beyond any other company we have ound to date. Atits root is a simple question:

Can the UK property market drop more than 10% per month for more than three consecutive months?

The realistic answer is no. The residential market has never

dropped 10% in one month in the history o any civilisedcountry. The UK record or one month is 2.5% occurringin May 2008. Over 2009 the largest all was 2.2% in July.The total all over the credit crunch was around 20% in 24months (going by an average o the major lenders reportsover that period).

The UK property market is quite simply not liquid enoughto move 30% in 3 months. That is why we guarantee ourproduct 100%. Lehman Brothers taught us all to ‘never say never’ but that has to have oundations in reality. When thehighest movement ever is 2.5% in one month, to assumeit could quadruple and maintain that level or 3 months isbeyond extreme pessimism.

We believe that this makes an Adavo joint venture one o the most secure investments on the market today. With thereturn typically around 15% per annum over 2 cycles, wealso think the returns are market leading.

100% C it l Gu r nteeMany investments come with a £50,000guarantee in the event o insolvency. As theminimum investment into Adavo is £100,000that would only o er a 50% guarantee in thiscase. We do not regard that as good enough

or a large investment - it certainly wouldnot be good enough or our money. Ourjoint ventures are 100% asset backed whichin turn supports a ull capital guarantee. Wethen o er a director’s guarantee on top.

Our Gu r nteeBy structuring the deal in this way, Adavo’s

nancial obligation e ectively begins only a ter the market has dropped more than thediscounted purchase and the added value

rom renovations (around 30%). We ul lthis through other pro t streams in the busi-ness as well as our own personal assets. Weo er ull protection with real ‘hurt money’on our side o the table, making sure we arein this together.

Current RICS V lu tionThe oundation o the security is the debt

ree asset that you own which secures yourinvestment in ull. You will receive a RICSvaluation stating the current value o theproperty to be purchased and the expectedvaluation once our renovations are complete.We also include in the joint venture structurethat this asset will remain debt ree whichminimises monthly outgoings.

W 3 mont s?We use each JV to nance the purchase and renovation o residential properties into high yield multi-let houses. Wehave an established orward order book and we are lookingto grow this. We typically sell each house within a month

rom the completion o the renovation works. Propertiesthat are well presented are currently selling inside threemonths across the UK supported by most major builders.

how Secure is Gu r ntee ?

discountepurc se

(Evi ence b RICS V lu tion)

V lue Incre se(Evi ence B

RICS V lu tion)

Ot er business rofitsn erson l ssets.

We then renovate the property toincrease its value, which is supported by a current RICS valuation. This gives a

urther 10% cover.

We generally buy at a 20% discountrom the current RICS valuation, which

means the asset you own is worth morethan the money used to purchase it.

We then guarantee that i the marketshould drop aster than it has ever donebe ore, we will use all our other pro tsand houses to guarantee any short all.




Recent press

1 JUNE 2010 - House prices rise or sixth consecutive month

According to latest gures rom the Land Registry house prices have risen by 8.5% over the past 12 months, and by 0.2% in April in England and Wales. The sixthconsecutive monthly rise takes the average property value in England and Wales to £165,596. The north-east experienced the biggest monthly rise with an increaseo 3.1%, ollowed by the east Midlands with a 2% increase.

Nationwide reported a 1% month-on-month rise, while the Hali ax data showed a 0.1% month-on-month all. House prices were up 10.5% year-on-year in Aprilon the Nationwide measure and by 8.8% on the Hali ax measure (but by 6.6% in the three months to April).

Sales volumes in England and Wales averaged 53,137 a month from November to February – a big increase on the average of 32,089 a month for the same period ayear earlier, but still way below the peak of about 120,000 a month in the spring of 2007. The highest number of sales – 8,997 in the 12 months to February – were

or properties costing between £100,000 and £150,000, ollowed by those costing £200,001 and £250,000 (7,775 sales), popular price bands or rst-time buyerswhich bene t rom the stamp duty waiver. The Guardian

26 MAY 2010 - Residential lettings recover

The decline in the number o “accidental landlords” has underpinned a sharp recovery in the residential lettings market, with evidence that rents have started

to rise again across the UK. Supply o rental properties has allen over the past three months, according to the Royal Institution o Chartered Surveyors onWednesday, which has helped push rents higher again. RICS said its member surveyors had pointed to a “revival in the lettings market”.

RICS said the net balance o chartered surveyors reporting rising rather than alling rents rose rom being fat to 30 per cent in the three months to the end o April. This is considerably more optimistic than this time last year, when 58 per cent more chartered surveyors were reporting alling rents, an all-time low orthe survey. Financial Times

he lines

11 FEBRUARY 2010: House prices: 60pc of renters are priced out of the market. Daily Telegraph

02 FEBRUARY 2010: Buy-to-let lending up, arrears and possessions down, says CML. Property Week

15 JANUARY 2010: Buy-to-let investors see strong returns in 2009. Financial Times

10 APRIL 2009: Property und to invest in student homes. Financial Times

10 MAY 2009: Testing times? Let students pay your rent. The Independent

01 DECEMBER 2009: Investors seek homes or cash. Financial Times




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haBITFaITh

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adaVO pROpERTy LLpREGISTEREd OFFICE:

Q16, QUORUM BUSINESS paRK BENTON LaNE

NEWCaSTLE UpON TyNENE12 8BX

T: 0845 519 3248F: 0845 519 3249

E: [email protected] W: adaVO.CO.UK

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Adavo Property Joint Ventures