The property is located in the Metropolitan Borough of Dudley and was purchased by prospective borrower recently. It comprises 2 detached part single storey and part two storey former office buildings, together with private car parking. Planning permission has been granted to convert the buildings into residential (class 3) and the borrower intends to create up to 13 HMO units and split the properties into 3 distinct areas. (Planning reference: P17/0754).
RICS valuation of existing properties: £210,000
RICS view on GDV of completed units: £700,000
CrowdProperty has agreed to lend £347,000 (£147,000 on completion of loan agreement and £200,000 towards cost of works).
The length of the loan is a minimum of 6 months and a maximum 15 months. Interest and capital on this project can be repaid in stages as the loan is paid back by the borrower (in minimum tranches of £250,000). The interest on the repaid amount will fall away, but you will continue to earn interest on the outstanding balance.
|Minimum 6 month Loan||Full 15 month loan period|
The exit strategy is to refinance and hold the property
The borrower will be ViewGreen Homes Ltd. and director Michael Kalisperas. Michael has a background in 3D visuals and design work having worked for the BBC. His property experience includes:
Worcester HMO: Refurb of current 5 bed HMO in Worcester in 2016. Light refurb of kitchen, bedrooms and bathrooms.
Barnards Green Road :The refurbishment of a Fish Bar in Malvern, at the costs of 100k which he owns in JV. This was a total refurb back to brick and involved extensive modernisation.
180 Markhouse Rd. London: Complete refurbishment of his 1st house in London followed by letting out the additional rooms once complete.
House of disability: Refurbishment of existing house to accommodate family member – project cost £300000
This is a classic commercial to residential conversion project. The developer will be adding significant value to these buildings by converting them into three large apartments which will be used as Houses of Multiple Occupation to maximise the rental income and hence the commercial valuation. The developer intends to hold these high rental yield properties and will repay the crowd by refinancing them with a commercial mortgage. As the end Loan to Value will only by 49.5% there is plenty of equity to cover the capital and interest payment to the Crowd. We are delighted to give this project he 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