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Algebra Capital Product Overview

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Algebra Capital Product Overview

  1. 2. With over 40 Years of property experience, our business is well positioned to source, research and develop a portfolio of property investments for our clients. With knowledge gained from agency, development, construction and legal careers, each member of our team is dedicated to ensuring that the smart investment opportunities to be found across the London property market are consolidated for our clients in a simple and flexible product. who are we?
  2. 3. what do we do? <ul><li>Our business prepares and executes the division of a property into fractions or shares. The property/title, can be legally divided by creating a &quot;mezzanine structure&quot;, i.e forming a company which owns the property then allowing multiple owners or investors to buy into that company. In essence what we are creating is Shared Freehold Ownership in perpetuity. </li></ul><ul><li>The people in our structures or, guilds, do not necessarily know each other but are like minded people with a similar objective for their investment. </li></ul><ul><li>NOT a property portfolio or hedge fund </li></ul>
  3. 4. <ul><li>Traditional </li></ul><ul><li>Actual ownership of Bricks & Mortar </li></ul><ul><li>Receive all income from letting/s </li></ul><ul><li>Full control over resale </li></ul><ul><li>Receive all profits from capital growth </li></ul><ul><li>Sole responsibility for all Maintenance/Management </li></ul><ul><li>Bear all costs of stamp duty, legal fees, furnishings </li></ul><ul><li>Suffer all depreciation at resale (if applicable) </li></ul><ul><li>Costs of buying in London some of highest in world </li></ul>Guild Actual ownership of Bricks & Mortar Share of income from lettings Full control over resale Receive all profits from capital growth on share Shared responsibility for all Maintenance No costs of stamp duty, legal fees, furnishings Can access London Property market at levels suited to purchaser Multiple purchases across different sites can spread opportunities and risk property investment options Fund Receive profits from properties performance in portfolio No responsibility for any Maintenance/management No costs of stamp duty, legal fees, furnishings No ownership of Bricks & Mortar No control of properties purchased Does not receive any income from letting/s No control over resale Usually a minimum investment level Pay large fund commissions
  4. 5. a guild makes sense <ul><li>Convenient/Lifestyle purchase </li></ul><ul><ul><ul><li>Excellent alternative to outright ownership and large investments </li></ul></ul></ul><ul><li>Economic Sense </li></ul><ul><ul><ul><li>A fraction of the costs and upkeep </li></ul></ul></ul><ul><li>Asset </li></ul><ul><ul><ul><li>A physical asset to pass on to generations </li></ul></ul></ul><ul><li>Simple re-sales </li></ul><ul><ul><ul><li>Full flexibility to sell or upgrade at any time </li></ul></ul></ul><ul><li>Property Management </li></ul><ul><ul><ul><li>Peace of mind and shared overheads/costs </li></ul></ul></ul><ul><li>Company Management </li></ul><ul><ul><ul><li>Licensed Fiduciary </li></ul></ul></ul>
  5. 6. how it works – purchase formation Each guild (property investment) is created by using a UK Company Limited By Guarantee (an LBG). The division of these LBG’s is made by way of memberships and not traditional ‘shares’ – the LBG is simply a vehicle that enables investors to buy into the bricks and mortar of the property. Each membership in the LBG is the legal owner of its corresponding share/s of the property. The LBG holds legal title to the property which in turn is owned by its members therefore making the members the true owners of the bricks and mortar.
  6. 7. how it works – the structure A typical LBG structure based on 4 owners can be found in the diagram below (fig1). The Founder Member, Algebra capital has no recall on any ownership of the property but is in place as a consistent ‘founder member’ to administer the legal structure, manage the lettings and subsequent property maintenance etc. Fig1 The Property Ordinary Member ¼ Ownership Ordinary Member ¼ Ownership Ordinary Member ¼ Ownership Founder Member (Algebra Capital) Ordinary Member ¼ Ownership
  7. 8. how it works – owner documentation Each LBG has a maximum of 12 members + the founder member. An investor can purchase a minimum of 1 membership but will need to purchase 2 memberships or more to finance the investment in a traditional mortgage arrangement. Each member will receive the following documentation to support their investment: Certificate of Incorporation - UK company (LBG) Membership certificate - Proof of LBG ownership Title deeds of property - Proof of property ownership
  8. 9. how it works – management As previously described, Algebra Capital will act as the founder member for each LBG. This role is to procure the sales of the memberships, coordinate the legal infrastructure with the owners and also to take responsibility for the day to day management of the property. With each purchase, as well as receiving the membership certificate and title deeds each owner will receive the following: UK Company details Rules and Regulations (chart) Plans & Specification of property Inventory Property Management Agreements Details of Administrator/s and Officers
  9. 10. how it works – re-sales <ul><li>A member can choose to sell their share in the property at anytime. </li></ul><ul><li>The LBG’s Articles of Association stipulate that a member wishing to sell their membership must: </li></ul><ul><li>Give the existing members first right of refusal to purchase the share </li></ul><ul><li>Appoint an agent for the membership sale (Usually Algebra Capital) </li></ul><ul><li>Have the process managed by the founder member </li></ul><ul><li>Pay the legal fees associated with the legal administration involved in amending membership structure – approx £2000 + VAT </li></ul>
  10. 11. what next? Interested Investors choose one of the properties in our portfolio that best suits their commitment and/or financial requirements. Memberships are held with a reservation fee and are held for a period of 14 days. During this period due diligence is undertaken by both parties. Once all of the due diligence requirements are met an agreement to purchase a membership is signed with an initial payment made. This payment is held in escrow until the acquisition of the property is complete. The agreement to buy will have an expiry date so the property being purchased has to be legally acquired by the LBG during this period. If this is not achieved, the investor has the option of dissolving the agreement. The funds, held in escrow, will be paid back in full with the interest acquired.
  11. 12. we looking forward to hearing from you… Algebra Capital was founded to create more opportunities in the London Property Market. If our products interest you, please visit us at www.algebracapital.co.uk to browse our portfolio of available properties/investments and find out more about how your investment could perform.

Notas del editor

  • 1 property per company Company has legal title to the property (that means the company’s rights of ownership are recognised by law and could be defended in a court) LBG – memberships not shares. Under UK financial services regulations (The Financial Services and Markets Act “FSMA”) issuing securities to the public is prohibited without the appropriate licence/authorisation. Different classes of memberships – founder member has occupation rights over the unsold memberships. When all are sold the founder member serves the purpose of dealing with potential disputes. Ownership of membership – membership certificate Ownership of property – title deeds
  • I am not here to teach the sales team how to sell 25% of the price of the property, annual maintenance costs, admin etc and contribute to a sinking fund to cover wear and tear. Research has shown…… 8 weeks a year. Budgeted €150K – you can buy something 4 times more luxurious than you previously thought possible. Buy into a luxury lifestyle Excellent alternative in current climate Value will increase or decrease in line with market A ¼ of the actual home. In the event of your demise it forms part of your estate as shares of a company would
  • 1 property per company Company has legal title to the property (that means the company’s rights of ownership are recognised by law and could be defended in a court) LBG – memberships not shares. Under UK financial services regulations (The Financial Services and Markets Act “FSMA”) issuing securities to the public is prohibited without the appropriate licence/authorisation. Different classes of memberships – founder member has occupation rights over the unsold memberships. When all are sold the founder member serves the purpose of dealing with potential disputes. Ownership of membership – membership certificate Ownership of property – title deeds
  • 1 property per company Company has legal title to the property (that means the company’s rights of ownership are recognised by law and could be defended in a court) LBG – memberships not shares. Under UK financial services regulations (The Financial Services and Markets Act “FSMA”) issuing securities to the public is prohibited without the appropriate licence/authorisation. Different classes of memberships – founder member has occupation rights over the unsold memberships. When all are sold the founder member serves the purpose of dealing with potential disputes. Ownership of membership – membership certificate Ownership of property – title deeds
  • 1 property per company Company has legal title to the property (that means the company’s rights of ownership are recognised by law and could be defended in a court) LBG – memberships not shares. Under UK financial services regulations (The Financial Services and Markets Act “FSMA”) issuing securities to the public is prohibited without the appropriate licence/authorisation. Different classes of memberships – founder member has occupation rights over the unsold memberships. When all are sold the founder member serves the purpose of dealing with potential disputes. Ownership of membership – membership certificate Ownership of property – title deeds
  • 1 property per company Company has legal title to the property (that means the company’s rights of ownership are recognised by law and could be defended in a court) LBG – memberships not shares. Under UK financial services regulations (The Financial Services and Markets Act “FSMA”) issuing securities to the public is prohibited without the appropriate licence/authorisation. Different classes of memberships – founder member has occupation rights over the unsold memberships. When all are sold the founder member serves the purpose of dealing with potential disputes. Ownership of membership – membership certificate Ownership of property – title deeds
  • 1 property per company Company has legal title to the property (that means the company’s rights of ownership are recognised by law and could be defended in a court) LBG – memberships not shares. Under UK financial services regulations (The Financial Services and Markets Act “FSMA”) issuing securities to the public is prohibited without the appropriate licence/authorisation. Different classes of memberships – founder member has occupation rights over the unsold memberships. When all are sold the founder member serves the purpose of dealing with potential disputes. Ownership of membership – membership certificate Ownership of property – title deeds
  • 1 property per company Company has legal title to the property (that means the company’s rights of ownership are recognised by law and could be defended in a court) LBG – memberships not shares. Under UK financial services regulations (The Financial Services and Markets Act “FSMA”) issuing securities to the public is prohibited without the appropriate licence/authorisation. Different classes of memberships – founder member has occupation rights over the unsold memberships. When all are sold the founder member serves the purpose of dealing with potential disputes. Ownership of membership – membership certificate Ownership of property – title deeds
  • 1 property per company Company has legal title to the property (that means the company’s rights of ownership are recognised by law and could be defended in a court) LBG – memberships not shares. Under UK financial services regulations (The Financial Services and Markets Act “FSMA”) issuing securities to the public is prohibited without the appropriate licence/authorisation. Different classes of memberships – founder member has occupation rights over the unsold memberships. When all are sold the founder member serves the purpose of dealing with potential disputes. Ownership of membership – membership certificate Ownership of property – title deeds

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