+41 43 888 45 45 info@convestro.com

 

Loans with properties as collateral

Short loans to property developers taking the respective property as collateral
is providing good yields while risks are well mitigated

Having a rigid Risk Managment in place, this niche is attractive for investors in any interest rate scenario. Key is to follow the key success factors stricly.

 

Bridge Finance
Loans to improve properties are much less exposed to interest rate moves than owning a property directly.
Important is a moderate loan to value based on a solid and defensive valuation of the property. On top it is important to be able to properly execute in case of delinquent loans covering the notional and interests of a loan.

 

Mezzanine
Developing properties is capital intense. Credit facilities often get in at later stage of a project. However even in the earlier stage of a project, a very attractive yield can be generated, still securing a solid collateral.
Our partner is not taking any construction nor rezoning risk, but primarily taking permit risk to build. The analysis of the probability a project gets approved as requested by the community is key. On top if a loan gets delinquent, it is key to get the project to the finishing line (either by selling to another developer or amend the project to get it approved).