Finance is the lifeblood of any successful property venture, whether you’re buying a first home or developing a block of flats. For the team at Handsome Group, getting finance approved means they can move quickly to secure fantastic deals on properties with outstanding potential.
A sustainable business creating quality rentals
Led by directors Michael Karabassis and Karl Grant, Handsome Group was established in 2018 and has quickly grown to two cities, over 70 rentals and more than 100 property transactions so far. They pride themselves on creating a sustainable business which meets the need for quality rentals – and gets run-down properties back onto the market in excellent condition. A recent project in Worcester Street, Christchurch, is a great example: Handsome Group purchased a dated 10-unit motel complex, converted it to residential units, renovated them all and had them tenanted in two or three weeks.
“We bought at the right price and achieved a 12 or 13% return, which is just where we like to be,” says Michael. “Buying large blocks works well because it’s one big site: one roof, fewer walls, and you save money on both renovating and maintenance.”
Funded by lunchtime
Buying and selling frequently, especially when deals can crop up at the last minute, means access to rapid finance is essential for Michael and Karl. Their projects often require significant up-front funding to meet the initial costs of purchase and renovation. But banks now take a very cautious and slow-moving approach to lending – particularly on any multi-unit projects. If Handsome Group relied solely on bank funding, it simply couldn’t move as rapidly as it does, or capitalise on the opportunities in the market.
“Dealing with the banks is just so time-consuming,” says Michael. “I’m working on a refinance right now and I’ve been sending them paperwork for months.”
Luckily, Michael’s background as a mortgage broker has also given him plenty of experience with second- and third-tier lenders. When he heard about Zagga, he wasn’t sure it would work, but with the rates so favourable compared to other non-bank lenders, he thought he’d give it a go and listed two projects.
“I had my reservations about Zagga; I was still searching for other funding when we listed our projects,” he admits. “It was kind of a scary moment because there’s a bit of uncertainty in borrowing with P2P lending. But it was the easiest, most streamlined process ever. The two projects went live at 9am and by lunchtime they were both funded. It was fast, efficient and organised. Seeing how it happened, especially how quick it happened, made me think seriously about using it more often.”
“It’s easy to recommend Zagga”
After using initial Zagga funding to get the projects underway, once they’re fully renovated and tenanted, they’ll be refinanced to the bank at the lowest rates. But being able to call on rapid funding via Zagga is what allows Handsome Group to secure a great deal while others are still chasing the bank for an answer.
“It’s easy to recommend Zagga, definitely,” says Michael, who has now used Zagga three times. “I’d recommend it quite highly to anyone, even at short notice. I have it in the back of my mind right now with this refinance I’m working on with the bank. It’s going to go down to the wire, so if I don’t get a good answer today, Zagga will get the opportunity.”
Financing is one of the business’s secrets to success, he adds: “The buyer who has the money will always win – we win the battle because we can move quicker. When you have the finance in place, you get so many opportunities.”