high yield property investment by adavo

high yield property investment
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Buy, Renovate, Sell. Simple.
A well designed, secured investment.

Adavo Property specialise in delivering high yield residential property investments for both corporate and private investors. Our joint ventures allow us to partner with like minded property investors and take advantage of the historic buying opportunities in the UK residential property market. We have developed a production line business model for buying, renovating, letting and selling high yield property that delivers a typical development profit of 15% per project. The joint venture partner recieves the first 7.5% of the project with Adavo taking the remainder.

The structure of the joint venture is simple. You provide the capital needed to fund both the purchase and renovation of each property and we provide all associated services and secure the exit. We will identify suitable properties, negotiate a discounted price, provide the renovations teams and both let and sell the finished properties. The JVs offer security to both parties. They give a secured return over a set period to the investor and each joint venture secures further business profits for us through our service fees of sourcing, renovating and lettings.

All money is held by the JV partner and is requested in stages set out by the joint venture agreement. All invoices are paid only after the work has been completed (including all renovation work) and no monies are held by Adavo Property at any time. The terms of the agreement are simple, clear and prescriptive. Capital is requested only in accordance with these terms when the bulk of the capital is requested to complete the legal purchase it is then sitting in an asset owned directly by the joint venture partner. Each JV is separated for accounting purposes giving added security and comes with a robust business model that should comfortably exceed 15% per annum returns. It is a very safe, well covered strategy.

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Multiple Projects Each Year
A six month turnaround allows a minimum of two cycles per annum.

The joint venture agreement lasts for as long as you choose to continue and puts you in full control. You control the capital, you own the property and you take the major decisions. Each project is scheduled to last between 6-12 months although we aim for as fast as possible. Two 6 months turnarounds would allow two cycles per year which is a comfortable pace. At this rate the return of 15%pa is highly attractive while remaining realistic and deliverable. When factored with the capital secured element our joint ventures offer remarkable risk vs return. A product featuring 100% secured capital with a 15%pa income is a stand out product in any market. Even on a single project per annum the return is attractive on a risk vs reward analysis.

The collateral for the capital protection is the property that the JV is used to purchase, which will be an asset of equal or greater value than your capital sum. Ownership is immediately arranged on the day of completion, in accordance with the land registry, that allows a clear and executable claim to a separated asset so that your capital is asset backed.

Your return is paid at the end of each project along with the full return of your original investment. The joint ventures are a simple split of profits meaning we share in our success together. It is then at either parties discretion to re-invest or move on. The headline expected return is around 15%pa per project and each joint venture partner can expect a fixed and first 7.5% return. The investor's return has priority over Adavo's share of any profit made.

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Secured Exit Strategy
Always start with the end in mind.

Every project we undertake has an exit in place. We do this by book-building our orders for high yield property from property investors looking to develop large portfolios. Several long standing relationships with partner firms and investors allow us to maintain an order book which is fed into the production line as each new joint venture is agreed. This gives a secured exit and greatly reduces the risk in each project.

Adavo's secured exit strategy is the best way to invest in property in 2011. It offers clear parameters for each project and allows each investor to be comfortable in both figures and time scale. This security when added to the client's ownership of the property and renovations works paid upon completion makes this a low risk venture with good risk vs return ratios.

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No Upfront Fees
No reservation deposit and all renovation work paid 100% on completion.

The most impressive part of our joint venture is the financial structure. We have designed it to reduce 99% of counterparty risk from the investment as well as to rebuke the ever present 'too good to be true' comments from advisors, friends and family. We do not send out any invoices until we have fully completed the work and evidenced it comprehensively.

Adavo's joint ventures do not carry a reservation deposit. We will not ask for any money upfront. Our cash flow is more than strong enough for deposits to be unnecessary and it is a barrier to entry for most advisors.

Impressively we also undertake all the renovation work with no money upfront and invoice 100% on completion. Your 7.5% return is prioritised over our own meaning you take the first of all profits. A bona fide, well designed structure.

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The Background to Adavo's Joint Ventures...
How our joint ventures originated.

The joint ventures were our response to the impact on available finance and have proven to be a huge success. Our experienced management team have delivered dozens of projects through this specific framework and have regularly banked annualised returns of over 30%. This structure capitalises on opportunities available in the property market at present to those with funds. Importantly the joint ventures allow us to service our order book without the need for expensive and inflexible mortgages.

The credit crunch severely tested the security of guarantees offered by banks and institutions over 2007-2009. The recognition is that the old way of conducting advance with only paper guarantees has forever been tarred with the stigma attached to mass collapses like Icelandic Banks, Lehmans, and Northern Rock. However, the financial system has thrown up similar experiences before causing presigious institutions like Barings Bank to now cease to exist.

We believed that this demanded a new solution that offered greater security and transparency than the products that had preceded it. Through the benefit of experience we have designed open book systems, processes, checks and balances to produce a remarkably safe investment structure that has tangible, real assets built into the security. We are very experienced in formulating bespoke strategies to meet our client's individual needs. In this market we find that means increased security, good income, no money upfront and short timescales with effective recourse built in.

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As a starting point our partners felt it should be a core principle that all investment with Adavo Property should be secured by collateral of equal or greater value. As a property business Adavo Property is not regulated by the FSA and the FSCS does not apply. We have something better - all property bought with your capital remains legally yours in full. Your main protection is the fact you own the asset. This gives a level of security that is unusual in today's market and goes beyond the £50,000 offered by the Financial Services Compensation Scheme. Against our average JV of £150,000 the FSCS's standard £50,000 guarantee only represents 33% of your invested capital. This would not fit with the exceptional security that the Adavo Property brand stands for. Fortunately we are not a financial services company nor do we trade derivatives or otherwise – we are a property company and that offers a number of advantages. It allows us to offer ownership of the property we have used the JV to purchase, giving full security over the capital invested. We then limit the effect of movements in the market by trading the deals quickly; usually within 6 months.

A cash buying position is highly valuable as it allows us to evidence proof of funds to agents or vendors and move quickly to secure opportunities as and when they arise. The cash position also allows us to command a substantial discount from the market value of properties, and on the day the property is completed the JV partner receives the title deeds in their name. Your money either sits in your bank account or it sits in your property.

We then consistently achieve the return through a variety of exit strategies. Due to the fact that the assets we create are mostly student properties with 10%+ yields they are very saleable investments. We have an occupancy rate of over 95% so in the event that we take a few months to sell the property the lettings income provides a healthy return in the meantime.

Adavo Property have spent years perfecting an in-house supply chain that allows us to consistently deliver returns year by year. We're proud of our business and the outstanding returns we can deliver through our very refined business model.

high yield property investment brochure high yield property investment by adavo