-
Investors too.
I would say that it's not just being doggy and fucking residents. Imagine what happens if you had say 5 blocks to build at £2om each. You can't secure the contractors to complete all in one go and you're financing them one by one for whatever reasons. If problems arise in the construction of one of them you want to limit the losses to that one block rather than risk all of them. Especially if say the total value of all the land could be at the level of the losses involved you could potentially loose everything.
I imagine very big developers borrow at fairly low rates. But smaller ones often pay quite a lot and have much smaller margins than most imagine.
hugo7-
So the summary is - these corporate structures are not only to screw over future home owners , but also to screw over creditors too, should the need arise.
Seems probable.
-
It is so much more than that, one site can be many companies. All the sameish directors.
Brilliant way to launder money, as has been proven...by Russians at least.
-
Imagine being forced to honour debt by selling assets!
-
Umm what? If your business is building homes and you decide to build multiple developments, you should have a system that insulates you from the risk you have knowingly taken on by making the decision to build multiple at the same time?
This makes no sense to me. If you don't want the risk of building multiple developments you can just build them 1 by 1.
This system just feels designed to encourage risk taking behaviours.
ChasnotRobert
lynx
Dramatic_Hammer
hazzelfrazzel
Is there any benefit to this (other than for the holding company)?