26-28, Elms Avenue comprises two Victorian Town Houses knocked into one situated in Eastbourne Town centre within a mix residential and guest house street. The property is currently run as a 15 person HMO for emergency accommodation for the local council. Planning has been granted to develop the property into 13 serviced accommodation apartments. Planning consent ref. no. P17/0754.
The project is a JV between Lee Beecham and the current owner of the property, Shila Frewin. It will be held in a SPV called Heatherdene Apartments Ltd. Lee is buying out Shila's existing business partner & the initial loan of £255,000 will also pay off the existing mortgage of £105,000. The RICS valuer has estimated a current value of £410,000. The initial loan of £255,000 represents a LTV of 62%.
A further £235,000 will be made available towards the cost of the conversion works and drawn on the verification of the Independent Monitoring Surveyors report. Once the works are complete the RICS valuer estimates a GDV of £770,000. The LTV at completion of the works will be 64%.
|Minimum 6 month Loan||Full 15 month loan period|
The planned exit strategy is to hold and operate as a serviced accommodation investment. The borrower will refinance the 2 buildings individually on a bricks & mortar basis, as soon as the development is complete.
Lee Beecham has over 30 years of experience in the construction industry. He has also been a property investor and developer since 2003, buying his first property when he was aged 18. Between 2002 to 2011, Lee was Director of Legends Mechanical Services Ltd. From 2011 to present, he has been Director of G&L Ductwork Ltd.
In addition to Lee's wealth of experience refurbishing property both himself (hands on) and also using sub-contractors. Shila Frewin is also an experienced property investor. She has been managing and owning this specific 15 bed HMO for 5 years.
This is a classic example of adding value to a tired property and changing the use to increase the commercial value.
There are two elements that we particularly like about this project. Firstly, the borrower is putting a lot of their own money into the refurbishment work. Secondly, we like the fact that they plan to retain this property and so are not dependant on any sales in order to repay the crowd. With a low LTV of 64% of GDV there should be plenty of equity to allow the borrower to refinance in order to pay back The Crowd.
We are delighted to give this project the CrowdProperty stamp of approval and offer it up to The Crowd.
* 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