Commercial to Residential: A grade 1 listed building with listed planning consent to convert from offices to 10 residential apartments.
Hamilton Square is a town square surrounded by Georgian terraces. It is second only to Trafalgar Square in London for having the most Grade 1 Listed buildings in one place in England.
A RICS valuation was undertaken on 3rd August 2015 by AC Surveyors & Valuers. The surveyor believes the property in its current state is worth £475,000. He believes the value of the completed conversion works and creation of 10 apartments is £1,100,000.
As the CrowdProperty loan will be just £350k compared to the value of £475k, the Loan to Value (LTV) is 74%. The LTV will reduce as the building works progress and will eventually be just 32% when the development is finished.
The building is 5 storeys (including a basement) and will be converted into 10 X 2 bed apartments (2 apartments per floor). The apartments vary in size from 57 to 68 square metres.
Some strip out work has been completed and the developer with the assistance of his consultants will undertake the completion of the works on a fixed price building contract for £280,000 (excluding professional fees). There are time penalties included in the contract, which should ensure that work goes to schedule.
The Developer advises that all 10 apartments have been pre-sold at a reduced total price of £935,000. Selling these properties off plan at a discount has removed the risk of taking too much time to sell at the end of the development.
The developer’s solicitor is in receipt of non-returnable deposits from 3rd party purchasers. As soon as he owns the building these investors have to exchange contracts. Once the building work is finished, 2 months has been allocated to allow for these investors to complete the purchase so that the loan can be paid back in full in 8 months time.
|Minimum 6 month Loan||Full 8 month loan period|
The Developer and Team
The acquisition is being made by Falkner and Kensington Estates Limited which is a development company founded by Billy Turriff. Billy has been investing in property since 2002 and currently owns a portfolio of 18 properties mainly in the North West of England with an asset value of approximately £1.9m. Gearing across his portfolio is relatively stable at approximately 65%.
In addition to holding for the long term Billy has worked on a number of buy to sell and development projects with other investors such as Eddie Leyland and Paul Burgess from Goodman Wells who are a leading property and investment development specialist firm based in Liverpool.
Goodman Wells has a broad range of property development experience securing planning permission, sourcing materials and managing contractors on both residential and commercial construction projects.
Goodman Wells will be the project consultants for the development. In 2014 they successfully completed the refurbishment of 35/36 Hamilton Square creating 15 new apartments over a 24 week timescale.
In addition to the above project Goodman Wells are also currently working on two other projects in the square - 37/38 with Billy again and also 15/16 with another partner.
Currently Goodman Wells are developing projects across Liverpool and the Wirral with a GDV of approximately £67m.
Link to Goodman Wells website can be seen here www.goodmanwells.com
This is a great development project that we are delighted to have on the platform. The developer has brought in an experienced team of builders who have already converted one of the buildings in this square and so know exactly how to deliver the finished product according to the listed building requirements. The fact that the exit strategy is guaranteed, by having pre-sold the apartments off plan to investors, minimises the risks normally associated with this type of development where it can take some time to sell properties.
The developer is using their own funds to carry out the building work so the loan from the crowd is low compared to the Gross Development Value. All considered we believe this is a great opportunity for our lenders.
Please note that this project is the first using a different method of funding that we are testing on the platform. Instead of pledging and waiting until we reach the full funding target you can start to earn money as fast as 7 days after your funds are received by our solicitor .
This new model removes the uncertainly of when the loan will start and means you can make you money starting working for you sooner. We believe this will be a very popular project and so encourage you to pledge now if you want to be one of the lenders.
* 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