Andrew Reeves, the property company, has launched five residential property funds that could delive...
Andrew Reeves, the property company, has launched five residential property funds that could deliver returns equivalent to 14-19% per annum over the next five to seven years.
Minimum investment is £30,000 and there will be a maximum of 50 shareholders in each fund. IFAs will be paid commission at a level yet to be finalised.
Each of the five funds will be capitalised at £1.5m, plus will have £2.5m in mortgage lending, to produce a £4m fund for investment in residential property.
Within each fund, 75% will be invested in buy to let properties, and the remaining 25% will be used to acquire London residential properties for refurbishment and resale. There will therefore be around 15 rental properties plus refurbishment projects within each fund.
The expected 14-19% returns depend on an average 6% growth in the values of property held by the funds, in addition to the contribution from refurbishment projects to convert and upgrade properties for resale.
Each of the Andrew Reeves Property Ventures investment vehicles will be treated as a medium to long-term investment. All realised profits and gains will be reinvested each year, and the funds' assets will be finally realised and distributed to shareholders after five to seven years.
Andrew Reeves, chairman of the Andrew Reeves Group, said there is no automatic exit route for investors before the five to seven year period, being an unlisted product with no open market. However, provided there is another investor prepared to buy into the market, a sale of the shares in the fund can be organised.
"However, we don't envisage this being a problem. Most investors looking to invest in the buy to let market are looking at the medium to long term in any case," he said.
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