There are a number of risks associated with investing in property, development projects and small, unquoted entities, such as the Special Purpose Vehicle (“SPV”) set up to hold your investment and we encourage all members to read the non-exhaustive list of risks summarised below before making an investment through Homegrown. Whilst risk cannot be avoided, we encourage all members to spread their investments across multiple projects to diversify risk and minimise exposure to any one project.
At Homegrown we aim to be completely transparent over the potential risks and rewards associated with our investments. Should you have any questions, please contact us at email@example.com.
There is no guarantee that the commercial objectives of the SPV will be achieved. The value of your investment can go down as well as up and there is a risk that you may lose your entire capital investment.
Property development returns rely on a number of factors including the successful development of land and the future sale of residential and/or commercial units. There is a risk that delays or cost overruns will cause a project to exceed its budget. There is no guarantee that any cost overrun can be recovered by insurance or contractor warranties, which may have a negative impact on projected returns. In the event of an overrun it may be necessary to seek additional finance from external sources in order to complete the development. No assurance can be given as to the availability or terms of such finance.
The future value of property is impacted by a wide range of political, economic and social factors. Consequently there is a risk that an investment will return less than the original investment made and members should not invest or put at risk any money that they cannot afford to lose.
Past performance of an asset and forecasts should not be taken as an accurate predictor of future performance. Any projections of future performance of an investment opportunity are subject to change and should not be relied upon.
Investments may be structured so that an SPV holds a minority investment in a separate entity which is responsible for the underlying property asset and as such a shareholder of an SPV may have little or no day to day control over the asset.
Investments through Homegrown are structured as an investment in the shares of a newly formed private limited company and each investment may be held for several years. We advise all members to enter an investment with the aim of holding their shares for the full term of the investment. Although investors may sell their shares to other Homegrown members before the term of an investment has been reached, there is no guarantee that a buyer will be found on terms that are acceptable to the seller.
Although a target investment term is set for each investment there is no guarantee that a development will be complete or all units sold on time. Each development may take an indeterminate amount of time and is open to inherent risks and therefore no target investment term should be relied upon.
It is the responsibility of individual investors in Homegrown opportunities to ensure that their personal tax liabilities are correctly reported and resolved with their relevant tax authorities. Homegrown cannot provide any personal tax advice. We advise individuals to seek guidance from qualified tax professionals.