244 Castle Street, Dudley, DY1 1LP
Kannan Palaniappan
- Finance Required
- Development funding
- Funds Pledged
- £250,000
- % of Target Pledged
- 100%
- Interest paid*
- 8%
- Size (sq.ft)
- 3412
- Est. Sales Value (GDV)†
- £410,000
- Loan Amount
- £250,000
- Loan to value (LTV)
- 60% at purchase; rising to 61% on completion
- Loan term
- Up to 15 months
Strategy & Vision for the Development
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.
Indicated return for £1,000 pledge
| Minimum 6 month Loan | Full 15 month loan period | |
|---|---|---|
| Pledge | £1,000.00 | £1,000.00 |
| Interest | £40.00 | £100.00 |
| Total repaid | £1040 | £1100 |
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
Projected Costs
- Purchase Price
- £115,000
- Total Cost of Project
- £283,000
The Developer
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.
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.
* Please see full risk statement here.
† Estimated Sales Value is more formally referred to as GDV - Gross Developed Value
‡ Interest Cover is a measure of the project's ability to cover the interest payments from profits and is calculated by dividing the Projected Return on Costs by the Total Interest incurred throughout the loan period
