36-38 Thornycroft Road, Liverpool L15 0EW comprises a 6 bed 2 storey student house and a plot which has planning for another 7 bed student house. Construction on the plot has commenced and foundations and ground floor is completed. Bricklayers started this week. The borrower has students leasing the new house for 2018/19 academic year and are confident construction works will be completed in time. The planning ref. is (17F/3206).
Thornycroft Road is situated in a residential district of Liverpool 1 mile east of City Centre. Thornycroft Road links to Smithdown Road – main distributor road from Liverpool to motorway network.
No 36 has a value of £225 000, verified by RICS valuer. The adjacent plot has a value of £45,000 and an estimated GDV of £225,000, again verified by the RICS valuer. Total GDV is therefore estimated at £450,000. The loan is likely to be repaid in 9 months following completion of the works, letting the house to the students and a re finance onto a longer term buy to let mortgage. To allow for any delays in this process we have agreed a 12 month loan term (min period 6 months). There is currently no debt on the properties and the borrower purchased them for cash in 2016, renovated it and has let it to students.
The property is owned by MADV Ltd formed in October 2015 Reg No: - 09841741. The Directors are Michael Hall, Alan Voysey, Dan Dobson & Vince Whittingham. M.A.D.V. has 3 other student HMO’s in the Liverpool area. The projected operating profit for the academic year 2018/19 is circa £50k.
Michael Hall & Alan Voysey are also Directors of Voysey & Hall Ltd. They currently have 4 student HMO’s in operation and another one under development.
Michael Hall has 11 other Buy to Let properties. 9 of which are held within his Company Imobiliario Ltd.
M.A.D.V Ltd.’s business model is High Quality student accommodation in Liverpool. With over 5000 students Liverpool has a lot of old and tired houses. The strategy is that of providing a quality product. They collaborate with Luxury Student Homes Management co. who have 700 high-end high spec student rooms on their books. All properties have been completely refurbished to include bespoke kitchens and bedroom furniture, not merely the ubiquitous Ikea solution, full fibre optic broadband, 50in TV, Blu-ray, full sky tv package. They are Gold Star accredited with Liverpool university and are a multi award winning Student HMO management company. Since our initial involvement with them we, and they, have had 100% occupancy in all of the properties that they have developed.
|Minimum 6 month Loan||Full 12 month loan period|
The borrower has let the new property to 18/19 intake of students starting on 1st September 2018. They will then hold and re finance.
Whilst slightly lower than our minimum loan size of £200,000 we wanted to offer our lenders the chance to invest in a shorter term loan period. It is hopeful that with students already identified and taking possession of the new house on September 1st 2018 the lenders will have return of their loan by end of 2018. With construction of the new house well underway and the borrower out of the ground the risk is reduced.
* 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