1. Joint Venture Investments
  2. How it Works

How it Works

We regularly launch a range of unique and diverse property development equity and mezzanine investment opportunities, which have been deemed profitable by our investment analyst team and supported by both a red book valuation and initial monitors report from the senior lenders professionals, allowing you to build an investment portfolio with just the click of a button; anytime, anywhere.

JaeVee Property Investment Pyramid

As an investor, you can invest in equity, mezzanine or do both.

Buying Shares (Equity)

Our investment model is based on you buying shares (equity) in a newly formed UK limited company (SPV), solely set up to own the title of the property. The targeted percentage return remains the same whether you invest £20,000 or £1,000,000+, as all funds are aggregated.

Owning Shares

When you invest, you own shares in the project SPV with your rights secured by a shareholders agreement and subsequent rights. Matters requiring consent are set at 81%, which means all joint venture partners (Investors and JaeVee) have to agree on any change (such as selling a property for less than originally forecasted).

Targeted Returns

Your equity returns are determined by leveraging debt. When combining senior with mezzanine debt, they typically cover 90% of the overall project cost. Our equity investors cover the remaining 10% for 40% of the profits, which is how the targeted return on your capital is determined.

Be The Bank (Mezzanine)

Our investment model also allows you to lend money (like a bank would) in the form of a mezzanine loan. The return tends to be less than that of an equity investment, though you get the benefit of a 2nd charge (behind the senior lender) with a fixed return of 15% per annum (paid when the project successfully exits). The 2nd charge security is held by our security agent on your behalf.

Exit Strategy

Both equity and mezzanine investments are based on achieving the exit strategy, whether sales of the development units or via a buy to let or commercial mortgage. As an equity investor, you’re a shareholder, therefore meaning you will receive a share of any return, whether it's the income, capital growth or sales profit in relation to your investment. Your exit is dependant on the developer achieving the exit set from the outset. If there are any complications JaeVee steps in and ensures it's achieved.

As a mezzanine investor, your return is fixed at 15% per annum with the benefit of a second charge. Whilst your return is typically less than that of an equity investment, your loan capital and returns are paid efore that of equity. Otherwise known as an order of priority being repayment of senior, mezzanine, and hen equity. If there are any complications with the main contractor not performing, JaeVee steps in and ensures it's achieved.

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JaeVee (JV) Partners Explained

JaeVee Explained

JaeVee

Main Contractor Explained

Main Contractor

House
Investor Explained (Equity & Mezzanine)

Investor (Equity & Mezzanine)

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We're Transparent About Our Costs

As the sourcer, facilitator, property developer and project manager we have costs to cover to ensure we continue to bring profitable property development equity and mezzanine investment opportunities to you to invest in. As our platform offers investors accessibility, protection and control, it also provides the comfort of transparency. As does our declaration of the costs we have to cover.

Project management

In order to keep our finger on the pulse, the project management has to go through JaeVee's sister company, Hatch Project Management Ltd.

The project management fee forms part of the professional fee pot allocated towards each project's costs. Typically, a project management company is paid 2.5% of the construction contract sum with the payment spread out evenly across the construction programme. Therefore ensuring there’s always an allocation throughout for project management costs.

The professional fees, along with the construction cost and contingency fund are usually covered by the senior debt lender’s facility.

They form part of the overall project cost and are borne by the SPV. The professional fee fund is displayed within the feasibility of each project, prior to you choosing to invest.

Employers Agent

In some of our developments, we act as the Employers Agent for all the design and build construction contracts entered into. Sometimes we appoint third party Employers Agents to act, ultimately it depends on the location of the project. The Employers Agent is a key role as it reviews the main contractors payment applications on a monthly basis; in order to agree upon valuations and issue payment instructions.

The Employers Agent acts on behalf of the client, which will be the SPV, as the contract administrator reviewing interim drawdowns, monitoring and reporting on the principal contractor throughout the programme to protect the cost position of the SPV.

Typically, an Employers Agent is paid 1% of the contract sum, with the payment spread out evenly across the construction programme. Therefore, just like project management fees, ensuring there’s always an allocation throughout for employers agent costs.

It’s covered within the professional fees allocation offered by the senior debt lender’s facility, along with the construction cost and contingency fund.

Profit share

We retain 50%-60% of the net capital growth or rental income. It is paid to us either when the project successfully exits or during (if rented). As each project is held in a separate SPV, corporation tax will be payable which is taken into account and deducted from all forecasted returns to equity investors.

Property Development Cost

Our property development cost covers the cost of raising funds, extensive due diligence, deal structuring, compliance, corporate governance, and marketing. The cost is added to the total acquisition costs and is borne as an SPV cost. It forms part of the equity and mezzanine raised on day one.

Property Sourcing Cost

As we employ an inhouse development origination team, it’s important we cover the property sourcing cost to ensure we continually bring to you the most profitable and risk averse property development investment opportunities. This cost is added to the total acquisition costs and is borne as an SPV cost. It forms part of the equity and mezzanine raised on day one.

Main Contractors interest

Whilst not a direct cost JaeVee incurs, our model works by providing main contractors with an incentive they don’t typically get offered. Whilst it’s common practise for main contractors to build for market rates, our incentive of offering a cut of the development profits - should they deliver on time and to budget - helps to ensure they prioritise delivering our projects with them.

The main contractor will earn up to 10% of the development profits should they deliver on time and to budget. Their 10% bonus comes from JaeVee’s side therefore not impacting on the 40% equity investors are entitled to.

Should the main contractor not perform, as they are paid on reimbursement terms, we are able to reassign the contract to another contractor which is why it’s vitally important we always budget building to market construction rates.

Our model is exit-orientated, meaning the main contractor has to achieve the exit in order for them to earn 10% of the profits generated.

All our projected returns are shown net of fees and corporation tax so your targeted returns will have already taken these costs into account.

Other Costs

As with all property developments, there may be unforeseen costs but we do our best to mitigate these, with the utilisation of the boost fund. The boost fund is 1% of the purchase price of the property which is held within the SPV bank account. The contingency fund, offered by the senior debt lender, is also there to assist with any unforeseen costs. Both this and the boost fund are already taken into account as part of the developments costs thus not affecting the projected returns to you.

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Property Development Investment Opportunities

Browse our diverse opportunities below, signup to view the full due diligence
and begin investing in your preferred developments.

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SPV1028 - St Marys Care Home, Felixstowe

SPV1028 - St Marys Care Home, Felixstowe

Felixstowe, Suffolk, IP11
9 Units | Sell For Profit Strategy

Shares Loans

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SPV1027 - Duke St Ipswich PBSA

SPV1027 - Duke St Ipswich PBSA

Ipswich, Suffolk, IP3
177 Units | Sell For Profit Strategy

Shares Loans

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Investing in JaeVee involves risk, including loss of capital and illiquidity and it should be done only as part of a diversified portfolio. Investments made through JaeVee are not covered by the Financial Services Compensation Scheme (FSCS). Please read our full risk warning before deciding to invest.

Capital at risk. Read our full risk warning.