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.
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).
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.
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.
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.
When we acquire a site for property development, part of the equity and mezzanine raised on our platform by the SPV, is towards progressing the project designs from RIBA 2 to 3. Once the designs have been progressed to RIBA 3, our in-house design team then issues them along with our requirements as part of a tender to secure a main contractor to build the development. Once a main contractor is secured, they build the development for market construction rates with the added incentive that should they deliver the project on time and to budget, they are rewarded with 10% of the development profits. This helps to ensure they prioritise our awarded contracts to them. Our sister company, Hatch Project Management, then manages the programme from start to finish enabling us to have our finger on the pulse at all times. Should the main contractor not perform, we’re able to appoint another contractor to complete the build (after serving the appropriate notices).
JaeVee is the sourcer, facilitator, property developer and project manager, there to minimise risk and ensure exits are successfully achieved. It bridges the gap between equity and mezzanine investors struggling to find successful property developers able to generate returns. Investor security and control is achieved for both equity and mezzanine. Equity investments are protected by all parties (Investors and JaeVee) holding shares in the company SPV (known as the client), and entering into both a shareholder and development agreement. Mezzanine investments are protected by the Security Agent (JaeVee Property Finance Ltd) holding the 2nd charge (against the property title) on behalf of the mezzanine investors. The Security Agent also enters into an InterCreditor Deed with the Senior Lender, which helps to ensure the Senior Lender acts fairly throughout. When the project exit is achieved, via either repayment of sales proceeds or a buy to let or commercial mortgage, the order of repayment is Senior, Mezz, Equity and then project profits.
After you’ve self-certified as a high net worth or sophisticated investor, you can browse the JaeVee property investor platform to view the current property development joint venture opportunities we have - offering a mixture of equity and mezzanine investments. You’re able to invest in either or both from a minimum of £20,000. Once you’ve selected the project you wish to invest in, at the point of reserving your investment, you’re able to review the relevant shareholder (equity) and loan (mezzanine) agreements. Upon reviewing and accepting those agreements, your funds are then paid into the project SPV e-wallet with MangoPay, our e-payment processing partner. Once you've invested, JaeVee completes the rest of the requirements (such as the senior debt, insurance and legals) in order to successfully purchase the site for development. Monthly updates are uploaded to the platform thus allowing you to login anytime, anywhere to watch your investment come to fruition. Not stopping there, we support the main contractor throughout in successfully achieving the exit strategy.
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.
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.
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.
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.
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.
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.
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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This website is operated by the JaeVee Group of Companies. Webpages containing share offers will be hosted by the relevant Group Company that is issuing the shares, as identified on the relevant webpage. Webpages containing mezzanine debt offers will be hosted by Estateducation Ventures Limited.
JaeVee is a trading name used by all companies within the JaeVee Group of Companies, including Estateducation Ventures Ltd. Estateducation Ventures Ltd is registered in England & Wales with company number 10172481. The registered office of the company is Studio 9 Netherconesford, 93-95 King Street, Norwich, NR1 1PW.
Estateducation Ventures Ltd (10172481) undertakes unregulated loan brokerage business that does not entail consumer credit or regulated mortgages. Arrangements by Group Companies to issue their own shares constitute unregulated business pursuant to Article 34 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (RAO).
Information about investments is only available to investors who demonstrate that they qualify as high net worth individual investors or sophisticated investors or otherwise fall within categories of investor who can receive financial promotions from unregulated persons in accordance with the requirements of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (FPO). Property investing carries the risk of losing some or all of the capital invested. JaeVee does not provide investment advice and investors who are in doubt about whether investing is right for them should consider seeking advice from an appropriately qualified professional adviser.
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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.
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