244 Castle Street Dudley

Paid Back in Full

244 Castle Street, Dudley, DY1 1LP

Developer: Kannan Palaniappan

loan amount

£250,000

interest paid*

8%

funds pledged

£250,000

number of investors

46

% of target pledged

Fully Funded

project type

Conversion to HMO

loan term

up to 15 months

security

1st charge

project phasing

-

floor area

3412 sq.ft.

purchase price/value

£115,000

cost of work

£213,000

loan to value

60%

est. sales value (gdv)**

£410,000

owed at exit to gdv***

69%

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strategy & vision

The borrower has owned this property in the Metropolitan Borough of Dudley since 2015. The property comprises the 1st and 2nd floors of 3 storey building held on 999 year lease (out of which 997 years is unexpired). The property is registered in the name of the company ‘Property Dreams Come True Limited’.

Planning permission has been granted to convert the commercial space into a 12 bedsit House in Multiple Occupation – 16/0475. All the rooms are en suite with communal kitchen in each floor.

RICS valuation of existing property is £125,000. RICS view on GDV of completed unit is £410,000. The total estimated cost of works is £213,000. Estimated cost of finance, fees and contingency is £70,000.

CrowdProperty will lend £250,000 for up to 12 months - £75,000 on completion of loan agreement and £175,000 towards cost of works. Loan to value will initially be 60% rising to 61% at the end of the build.

The length of the loan is a minimum of 6 months and a maximum 12 months.

exit strategy

Build, Remortgage and let:
o Plan A – Through local agents
o Plan B – As JV with local partner
o Plan C – As Rent to Rent

Type of tenants:
o Priority 1 - Key workers – Hospital technicians and nurses
o Priority 2 - Blue collar workers
o Priority 3 – LHA tenants

the borrower
& project team

The borrower will be PDCT Ltd and its sole director is Kannan Palaniappan. Kannan has been in construction for more than 20 years specialising in HVAC (Heating, Ventilation and Air-conditioning). He worked in India and then Saudi Arabia as M&E (Mechanical and Electrical) Project Manager, before moving into Project Planning in Construction Projects.

Currently Kannan is a Director of Planning Zone Limited. www.planningzoneltd.co.uk. He has worked on iconic buildings including 240 Blackfriars, 280 High Holborn, Café Royal at Piccadilly Circus. Café Royal is a 5 star hotel with retained façade on all in the busiest part of London. The Rolls Building is a new build with a high specification Cat-B fit out for High Majesty’s Royal Court of Justice.

Kannan has been undertaking his own projects for about 4 years initially refurbishing and selling individual properties, and now concentrating on HMOs and Serviced Accommodations in North London.

indicated return for your pledge

	interest	total
6 month loan	£200	£5,200
18 month loan	£600	£5,600

CrowdProperty Comments

Whilst there is risk in any loan you make and your capital is at risk, we believe that this is a relatively low risk project.

The borrower on this development is highly experienced and so very capable of delivering this project on time and to cost. The building is in a fantastic location, in the centre of the town with high rental demand. We like it when the borrower has to use some of their own money, which gives them more incentive to get the project right and also helps keep the loan to value relatively low.

This is why we are delighted to award this project the CrowdProperty stamp of approval.

The

CrowdProperty

Shield

Rigorous due diligence

Our in-house property experts thoroughly assess each project proposal. We scrutinise the developer and any of their partners’ track records. Only the most promising projects, by the most experienced developers, will receive an informal offer. CrowdProperty will only work up to certain loan-to-value and loan-to-cost percentages, and each project must meet our 25% profit-on-cost criteria. For more information please view our risk statement.

1st Charge Security

A ‘1st legal charge’ gives CrowdProperty the legal right to take ownership of a property in the unlikely event that a property professional defaults on their loan repayments. 1st legal change is the highest level of security and gives CrowdProperty all the rights that a mortgage company holds. We have 1st legal charge on every project listed on our platform. This is an essential, non-negotiable criterion to ensure your funds are safe.

Unparalleled expertise

Our in-house experts perform strict and rigorous checks on all projects proposed. With almost 100 years’ experience in the industry, we work in partnership with our borrowers. We work in partnership with our borrowers until project completion. If a borrower were to default, CrowdProperty’s 1st legal charge allows us to take ownership of the project. Here we would utilise industry experience to ensure the most suitable exit strategy was followed.

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*Please see full risk warning
**Estimated Sales Value is more formally referred to as GDV - Gross Development Value
***Owed at exit to GDV is calculated as the total capital + any planned loan interest against the RICS GDV for the project. These figures do include subsequences on projects funding development costs during the course of the project.