Property Development Funding Model — Built to Protect and Reward Investors
A Revolutionary Property Development Funding Model — Built to Protect and Reward Investors
Our model was born out of necessity — in direct response to the failures and risks of traditional property development finance. We've created a debt-free syndicate structure that not only avoids legacy lender pitfalls but actively empowers both capital security and upside potential for investors.
The Problem with Legacy Lender-Based Models
For years, developers and investors have suffered under the weight of traditional lending:
Aggressive lender practices: Institutions like RBS (through GRG) used technical defaults and undervaluation tactics to seize control of development assets — often wiping out investor equity in the process.
Receivership risks: Banks could appoint administrators or receivers without notice, forcing project fire-sales at below-market values, destroying developer reputations and investor returns.
High-cost, rigid lending: Traditional development finance is layered with fees, restrictive covenants, and inflexible drawdown terms. Exit delays or minor breaches often trigger financial collapse.
These legacy issues eroded trust, stifled creativity, and left both developers and investors exposed to third-party control. Our model fixes that.
How Our Debt-Free Syndicate Model Works
We’ve replaced institutional lenders with aligned, private investors and built a model that is both secure and performance-driven.
Funding Structure
90% of project costs are provided by Debt-Free Syndicate Investors, drawn down in stages.
Fixed return of 10% p.a. during development and sales.
All funds are held in a third-party solicitor escrow account and released in certified tranches — ensuring full investor protection and transparency.
10% of project costs are provided by Equity Investors, who receive:
40% of the net profits, aligning them with the upside of project success.
Built-In Risk Mitigation: The Rental Conversion Mechanism
If sales do not complete within 3 months of practical completion (i.e. building control certification issued):
The syndicate capital converts into a buy-to-let-style mortgage paying a 4% p.a. return, with the debt free syndicate repaid via a third party buy to let mortgage as typical LTV’s are 75% so as our capital stack including interest repayments to the debt free syndicate are set at within 75% of the property values, the exit is planned for the debt free investors without having to wait for the market to recover for the equity upside.
Syndicate investors also receive rental income distributions (based on their shareholding amount in the project SPV) until the third party buy to let mortgage repays their loan and return whilst also continuing to benefit from a share in the long-term capital upside given the equity upside when investing in the debt free syndicate model.
This ensures there’s no forced exit, no distressed sales, and no external lender pressure — protecting both principal and potential.
Why Investors Should Invest in Both the Debt-Free Syndicate and Equity
Debt-Free Syndicate Investors
10% annual return during build and sales.
Downside protection through priority returns and no exposure to debt default.
Rental income + equity upside in fall-back scenario.
All funds protected in third-party escrow — never co-mingled with developer funds.
Equity Investors
High profit potential (40% of net profits).
Small capital contribution for a large return slice.
Fully aligned with the developer and syndicate.
Dual Investment Benefit
By investing across both the syndicate and equity tiers, investors can:
Balance fixed returns and high upside.
Secure early-stage returns while sharing in project profitability.
Diversify risk and access the best of both worlds.
Why This Model Outperforms Traditional Debt-Based Funding
Feature | Traditional Lender Model | Debt-Free Syndicate Model |
|---|---|---|
Security Risk | Lenders can call in loans, appoint receivers | No charges, no receivership risk |
Cost of Capital | High interest, fees, penalties | 10% p.a. fixed, with controlled drawdown |
Exit Pressure | Forced sales on completion to repay loans | 3-month grace period, then rental fall-back |
Investor Returns | Lenders fixed; no profit share | Debt investors earn fixed + equity upside |
Developer Control | Lenders control in default | Full control retained by developer |
Alignment of Interests | Often adversarial | Investor-developer alignment |
In Summary
Our debt-free syndicate model is a direct answer to the broken legacy systems of the past. It provides:
Security without lenders
Returns without refinancing risk
Upside without losing control
It’s a model that puts investors first, protects capital through escrow controls, and builds lasting value — not just buildings. This is development finance reimagined. Invest with confidence.
Rise Capital is ready for you to invest with right now; join a growing group of investors ready to make history.
Join Rise Capital today