This project comprises of a 2 storey detached office building situated on the south side of Coleshill town centre about 7 miles east of Birmingham. The floor area of the property is about 5425 sq ft. The Borrower, Coleshill Developments Ltd, negotiated a conditional purchase of the property earlier this year at an agreed price of £425,000. Part of the conditional contract included obtaining planning for a change of use to residential and they successfully achieved this under planning ref. no. PAP/12017/l0/412.
The conversion will include the creation of eight apartments; six 1 and 2 bedroom flats and two 3 bed coach houses. Onsite parking and communal gardens will be included. The flats will comprise of the following:
Flat 1 - 1 bed - 433 sq ft
Flat 2 - 1 bed - 467 sq ft
Flat 3 - 1 bed - 485 sq ft
Flat 4 - 2 bed - 595 sq ft
Flat 5 - 3 bed - 1,178 sq ft (coach house)
Flat 6 - 3 bed - 968 sq ft (coach house)
Flat 7 - 2 bed - 656 sq ft
Flat 8 - 1 bed- 530 sq ft
The RICS valuer now estimates that the current value of the property with the benefit of planning is £560,000. On this basis CrowdProperty have agreed to lend the borrower £410,000 towards the purchase.
The conversion works are expected to take 8-9 months and on completion the RICS valuer believes that the completed development will be worth £1,410,000. On this basis we have agreed to lend a further £500,000 towards the conversion costs.
The total loan will be £910,000 representing a LTV of 65% on the completed development. The initial loan of £410,000 represents a LTV of 73% based on the RICS valuation. With acquisition costs, consultants fees, interest and sales costs amounting to a further £224,000, we estimate the development will have a profit on cost in excess of 24%.
The purchasers are contracted to complete the purchase on 3rd January 2018 and the loan period is a minimum of 6 months and maximum of 15 months.
|Minimum 6 month Loan||Full 15 month loan period|
The Borrower plans to sell the units once the conversion works have been completed.
Borrowers Nick Sellman and Warren Jones will be jointly managing the project, acting as joint shareholders of Coleshill Developments Ltd.
Nick has considerable commercial redevelopment experience, having completed a series of schemes across Birmingham, Kidderminster, Banbury, Lichfield and Milton Keynes during 2013/14. Nick also owns and operates a sizeable rental portfolio of 200 residential housing units across the Birmingham area.
Warren has a Bachelor's Degree in Civil Engineering and has worked in the construction industry since 2002. His previous roles include acting as a Project Manager on a large sustainable extension project in Corby; delivering 5100 new homes. More recently Warren has managed a number of new housing and permitted development schemes under his own company, Lateral Homes Ltd.
We are delighted to bring this commercial to residential development project to the Crowd from two very experienced developers.
This is a standard conversion of former offices to 8 units in a desirable village location. This is actually a small development for these developers who normally develop multi-million pound projects but are doing this one as it is very close to where they live and also they want to test this "small" project with CrowdProperty with the view of bringing larger projects to the crowd in future.
With a loan to value of just 65% of end GDV, and 3 out of 8 properties already have been reserved before any building work has started, these units should sell relatively quickly. We are delighted to give 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