ABOUT THE PROJECT
The property is a part 2 part 3 storey former Care Home (St Lawrence Care Home) dating back to the 1970’s. The property is located approx. 4 mins (0.8 miles) north west of Crediton town centre. Crediton is located 9 miles west of Exeter in Devon with a population of 8,077 and a direct workforce of approx. 4,802. Planning (18/00091/FUL) has been granted for the conversion of the property to provide 22 residential flats and 37 car spaces. The Borrower has exchanged contracts and spent £104,000 to secure planning. He now has committed to complete the purchase of the property in early January 2019. The Borrower, KHP Group of Companies is well known to CrowdProperty having previously borrowed on 2 projects, one of which was repaid in 2017.
The RICS valuation of the property in its existing condition with the benefit of planning is £912,500. The RICS estimate of the completed development (GDV) is £3,277,500. CrowdProperty has agreed to lend the borrower £1,800,000 over a period of 18 moths in 4 separate raises. The initial raise is £700,000.
LOCATION AND DESCRIPTION
Crediton is situated in Mid Devon about 9 miles North West of Exeter. Access to the M5, J30 + 31 at Exeter is via A377. The town is situated in the Vale of Creedy and is home to the Creedy Lakes. The town benefits from a railway station approx. 1 mile from the property with regular trains into Exeter where direct connections to Bristol and London can be boarded. With a population of 8,022 Crediton serves as a commuter suburb to Exeter.
The property is situated just North West of the town centre within a predominantly residential area and opposite Crediton Police Station. The property is a mix of single, 2 and 3 storey attached buildings constructed of cavity brick and blockwork elevations under pitched roofs overlain with interlocking concrete tiles.
Local amenities include:
Shobrooke Park 1.6 miles
Lords Meadow Leisure Centre 1.2 miles
Crediton hospital 0.4 miles
Queen Elizabeth School 0.2 miles
SITE AREA/FLOOR AREA
Total site area: 0.98 acres
Total GIA floor area: 17, 728 sq ft (1,647 sq m)
A total of 22 residential units providing 7 x 1 bedroom flats, 14 x 2 bedroom flats and 1 x 3 bedroom flat as follows:
Ground Floor 5,823 sq ft (541 sq m) apartments 1 - 9
First Floor 5,984 sq ft (556 sq m) apartments 10 - 18
Second Floor 476 sq ft (44.37 sq m) apartments 19 - 22
OVERVIEW OF FINANCIALS
CrowdProperty has agreed to lend the borrower a maximum of £1,800,000 over a 4 phased raise as follows:-
First phase raise of £700,000, from which an initial £615,000 will be released towards the purchase of the property. The RICS valuation with the benefit of planning is £912,500 representing an initial LTV of 67.4% The remainder of the phase 1 raise will be released on the Independent Monitoring Surveyors (IMS) verification that initial works have been executed.
The phase 2 and 3 raises of £400,000 to fund the remainder of the construction phase will be launched in Q2 and Q3 of 2019. These funds will be released in phases subject to our IMS reports.
The phase 4 raise of £300,000 will be launched in Q4 2019.
The estimated cost of works is £1,207,027 as verified by the QS estimate and currently being Contractor tested.
The gross development value once works have been completed is £3,227,500 (RICS verified) and including rolled up interest and assuming full term will give a LTV of 62.5%.
The loan is offered for a max term of 18 months. Given the nature of this opportunity it is expected partial repayment of the loan will occur when units have been refurbished and sold/re financed. The borrowers exit strategy is to part sell and part let, refinance and hold to pay back CrowdProperty.
The loan will commence on or around 7th January 2018 and as with all our loans CrowdProperty will have first legal charge as documented at the Land Registry.
Sell part and let and refinance part
The borrower is KHP (St Lawrence) Limited ( Company Reg. No. 10929487). The KHP Group of Companies specialise in commercial conversions and particularly listed building conversions for either the sale or rental markets. In 2016 KHP borrowed £614,000 from CrowdProperty to convert a former nursing home into individual flats. They subsequently sold the flats and repaid our lenders in full in 2017.
KHP has development projects across South Devon. The directors are listed below and between them they have over 50 years of combined experience in residential and commercial property investment and development.
Philip Bailey, BA Dip Arch RIBA. With 30+ years’ experience of running his own architects practice specialising in residential and commercial property development and conversions including listed building projects.
Philip has also completed the redevelopment of his current house converting it from a 2 bed bungalow to a 7 bed family home.
Kiel Bailey Building Surveyor with 10 years’ experience specialising in timber frame buildings. He previously worked for an architect’s practice for over 10 years. His focus for KHP is on the drawings and construction detail, putting together specifications, and monitoring on-site productivity, quality and cash flow.
Xylina Bailey is a professionally qualified HR Consultant and is passionate about saving historic buildings. Her focus is providing internal design schemes for all KHP projects, sales and marketing and the HR agenda for there growing team.
James Yorke is an experienced Construction Project Manager, having previously led multi-million pound commercial developments for a national construction company. James studied construction management at Plymouth University and then joined a nationwide construction company.
James manages the projects for KHP ensuring a competent supply chain is appointed to deliver the schemes on budget and on time with the health and safety agenda being paramount.
Murat Haykir (Mo) is an experienced Project Manager specialising in leading large, global change initiatives for multi-national financial institutions.
Mo is a full time property investor and developer and is co-founder and Director of KHP Group of Companies. Prior to jumping in to property full-time, Mo worked for both Lloyds Banking Group and HSBC as a Project Manager, working on global, multi-million pound regulatory change projects.
James and Murat have completed a Grade II listed conversion of a substantial house in Plymouth into a 6 bed high end professional HMO and a two bed flat.
They also own and operate an HMO Lettings agency called Moorview Lets in Plymouth where they manage some 120 rooms. Moorview Lets will manage Wyndham Hall to ensure KHP have quality tenants.
The team have between them a Portfolio of HMO’s with some 80+ rooms together with single houses, flats and Serviced Accommodation properties mainly located in Plymouth and the South West.
min. loan (6 months)
18 month loan
In 2016 KHP Investments borrowed £614,000 (79 lenders) towards the conversion of a former nursing home in Saltash into 10 self contained apartments. These were successfully sold and CrowdProperty's lenders were repaid in full and on time. The Directors are experienced in every aspect of the development process including architect, engineers and construction management.
Our in-house property experts thoroughly assess each project proposal. We scrutinise the developer and any of their partners’ track records. Only the most promising projects, by the most experienced developers, will receive an informal offer. CrowdProperty will only work up to certain loan-to-value and loan-to-cost percentages, and each project must meet our 25% profit-on-cost criteria. For more information please view our risk statement.
A ‘1st legal charge’ gives CrowdProperty the legal right to take ownership of a property in the unlikely event that a property professional defaults on their loan repayments. 1st legal change is the highest level of security and gives CrowdProperty all the rights that a mortgage company holds. We have 1st legal charge on every project listed on our platform. This is an essential, non-negotiable criterion to ensure your funds are safe.
Our in-house experts perform strict and rigorous checks on all projects proposed. With almost 100 years’ experience in the industry, we work in partnership with our borrowers. We work in partnership with our borrowers until project completion. If a borrower were to default, CrowdProperty’s 1st legal charge allows us to take ownership of the project. Here we would utilise industry experience to ensure the most suitable exit strategy was followed.