Investment Criteria

Asset Class

Residential

Property Types

Single and multi-bedroom flats, duplex apartments & semi-detached, detached and terraced houses in good condition across secondary and tertiary markets.

Regional Focus

Regions across the UK, excluding Isle of Man, Isles of Scilly, Isle of Wight, Jersey & Guernsey, Lund & Lindisfarne, with:

Medium to high job growth prospects.
Average household income of at least £30,000.
A maximum 13x Preferred Home Price to Gross Income ratio or 20x Preferred Home Price to Net Pay ratio.
Rent Payment (and household & living expenses) ratio of 75%.A maximum Annual Rent to Residual Income before Rent Payment (after household & living expenses) ratio of 80% or Annual Principal Savings to Residual Income after Rent Payment (and household & living expenses) ratio of 75%
A maximum Annual Household Expenditure (excluding Rent) to Net Pay ratio of 55%.

Property Restrictions

No basement flats, mobile home, houseboat, student accommodation, holiday or retirement home
No leaseholds below 100 years
Must be main residence for the tenant
No restrictive covenants limiting property resale or blocking wider appeal to the market
Must be in good structural condition with no disrepair, foundational and environmental issues

Maximum Transaction Size

£800,000

Portfolio Exposure Limit

15% per investment transaction
35% per region

Acquisition Structure

Asset and Share transactions considered

Type of Investment

Equity

Minimum Commitment per Investment

Initial Investment: $1,000
Follow-up Investment: $1,000

Fund Raise Period

1 year from the commencement of fundraising

Investment Horizon

Investment Horizon 4 years from final close of fund

Fund Life

Fund Life 10 years from commencement of fundraising (plus 1+1-year extensions)

(1) assuming 35% LTV.

(2) assuming 35% LTV across a portfolio of 25 properties.

(3) Excluding fund management fees and set-up costs.

Our Strategy

Our business model involves the purchase of residential homes in the UK based on our tenants’ preferences and leasing these homes on a minimum 5-year lease to our tenants/homebuyers, with 1+1-year lease extension options at tenant request.

To match this, the Sponsor will focus on investment into residential properties for a minimum 5-year holding period along the following real estate strategies:

These strategies will fall along the risk-return spectrum as below:

Our strategy will be reinforced with a comprehensive analysis of forecasted rental and capital value growth & algorithmic data analysis of average capital values, rents and household expenses and tenant’s likelihood of affordability of Rent and Principal Savings under our scheme at the local area and regional level. This will enable the Fund Manager to offer a competitive total return while ensuring downside protection.

Our main focus will be to purchase Preferred Homes, which will provide, after all, costs;

A minimum Dividend Yield of 2% per annum.
A minimum anticipated Net Capital Return of 2% per annum.
A minimum anticipated Net Total Return of 6% per annum.

To attain these targets, we anticipate investments to be centred around:

Main cities in the Midlands, South West, East & North of England, Scotland and Wales, such as Birmingham, Belfast, Cardiff, Glasgow, Leeds, Liverpool and Manchester, benefit from a vibrant workforce, and growing employment prospects and are subject to infrastructure regeneration and development and;
High rental yields secondary locations and commuter belt towns around or within close proximity to major cities and arterial transport links, which attract or are likely to attract skilled and employed renters who fit our target demographic. These locations are likely to be in the North, East and Southwest of England and Eastern, Southeast and Southwest of Northern Ireland.

SuchHomes’ investment strategy will be implemented with the following factors taken into account:

Acquire properties in attractive locations

Invest in properties situated in locations with high rental yield & capital value appreciation forecasts.
Purchase Light Value-Add homes and deploy capital expenditure towards refurbishment with the aim of yield compression upon exit.

Select the right tenant and property management third parties

Select the right tenant and property management teams.
Manage tenant and outsourced third-party property management parties effectively.
Develop management capacity.

Match investment to leases and cash flows

Provide flexibility in deal structure while ensuring alignment of investor, tenant and SuchHomes.
Blend equity with debt in a favourable interest rate environment.
Structure investment to protect capital with downside protection offered.

Value Enhancement through Asset Management

Address weaknesses identified during due diligence (conditions subsequent).
Monitor applicable regional and local markets regarding value of our investments.
Monitor and evaluate performance of our investments and oversee the various management and operational functions related to investments.
Implement business strategy for the administration, promotion, management, operation, maintenance, improvement, financing and refinancing, leasing and sale of investments on an overall portfolio basis.
Identify opportunities to reduce operating expenses without sacrificing quality through professional property management.
Upgrading and improving property interiors and exteriors to increase desirability and rents, and decrease maintenance expenses.

Value Realisation & Risk Management

Alignment upon exit.
Grow rental income and dividends.
Ensure downside protection at the asset (thorough due diligence, property inspection, risk mitigation) and portfolio (local, regional & ticket size diversification etc.) level through due diligence, sensitivity analysis and
Proactive portfolio management.