This is the Phase 2 raise of a loan agreement that completed middle of 2018. The opportunity will launch on 19th February 2019 at 10 a.m. when CrowdProperty is seeking to raise £456,000 from the previously completed Loan facility Agreement of £1,250,000.
CrowdProperty agreed to lend £1,250,000 in 2 raises. The loan commenced on 6th July 2018 for an agreed 18 months (max) loan period. The Phase 1 raise in June 2018 raised £794,000.
Our Independent Monitoring Surveyor has carried out 2 inspections and has reported that to date the borrower has undertaken the following works:
Demolition and strip out works.
50% of the new foul drainage has been completed and all new channels in the concrete floors cut out.
All new structural beams and columns have been installed.
Metal framed partitioning has been erected. Plasterboard has been installed to the first floor of the Waterloo St wing.
Metal framed ceilings have been installed. Plasterboard ceilings have been installed to the first floor of the Waterloo St wing.
The electrical first fix has commenced and is circa 25% completed.
Works planned prior to the next inspection include:
Partitions boarding and skimming.
Electrical and Mechanical installation.
Substructure – to include the installation of the below ground drainage already 50% complete.
Another IMS has been scheduled for the final week in February.
The property comprises a former Victorian school last used as serviced offices and located in a mixed residential and commercial district of Burton 0.5 miles south of town centre. Burton upon Trent has a population of 72,299 with its industrial heritage centered on the brewing industry. Burton's largest employers including Molson Coors and Punch Taverns. Marmite and Pirelli are also major employers.
The property is a 2 storey “U” shaped brick building with pitched roofs. The site coverage is about 30% with the undeveloped areas providing car parking (circa 25 spaces), driveways/footpaths and gardens.
Planning was granted for the existing office space to be converted into 25 dwellings ref. no. P/2017/01105 - East Staffordshire Council.
The conversion of the building into 25 apartments will produce the following estimated sale prices according to the RICS valuer:
Studio Flat - £50,000
9 X 1 Bed Flats - £65,000 each
15 X 2 Bed Flats - £95,000 each
Total GDV - £2,060,000
The borrowers purchased the property for £625,000.
The borrowers are currently on track with their build programme and expect to complete the conversion works in July 2019. They will then sell the flats. Alternatively and if necessary the borrowers have agreed to retain some flexibility in their exit strategy by letting, refinancing and holding part if necessary.
The RICS valuation of the property was £806,000 prior to commencement of the works and with the benefit of planning.
The agreed cost of works is £804,907.
CrowdProperty agreed to lend the borrower £1,250,000 across 2 phases for a maximum of 18 months. The first raise was £794,000 and contributed towards the purchase of the building and initial build costs of the development. A sum of £425,000 was paid out day 1 based on RICS valuation of £806,000 - equating to a 52.73% initial LTV. The remainder of the phase 1 monies have been drawn following our Independent Monitoring Surveyors (IMS) verifications. The phase 2 raise of £456,000 will be drawn down on future IMS inspections. The term of the loan is 18 months from 6th July 2018 and on completion the LTV will be 68.28% including rolled up interest.
The targeted start date for this phase of the loan is 1st March 2019.
CrowdProperty already has a 1st charge security of the loan on behalf of The Crowd as registered in the normal way with the Land Registry and the phase 2 raise will be merged into the existing legal agreement.
Borrowers intend to sell the flats on completion but if necessary will refinance, let and hold.
The property has been purchased in SPV - Burton Waterloo Ltd Co. reg. no. 11358127. The owners and directors of the company are Fabio Frisenda, Piotr Szydlik and Trevor Walker.
Fabio Frisenda has been in the property industry for 20 years starting in Agency and working for Century 21 Real Estate group (near Paris). In 2005 he was Co-Owner of a Property investment company (near Paris) sourcing and investing in renovation projects + flips on plots of land 2011 to 2016. He returned to the UK in 2016 and set up Investimmo Limited (incorporated 2017) - sourcing and investing in Commercial buildings to create HMOs.
Piotr has been running a building company in the UK since 2007 specialising in extensions, extensive refurbishments and commercial to residential conversions. He recently converted a pub into a 20 ensuite bed hostel in Liverpool.
He has just completed the conversion of 2 former NHS buildings into 26 ensuite bedrooms and an HMO in St Helens. He owns 11 other properties in London and Manchester including a mix of HMOs and single lets.
Trevor is a Fellow of the Chartered Insurance Institute and a Fellow of the Chartered Institute of Loss Adjusters.
He is now a full time Investor and Property Developer. His prior projects include the conversion of a former mill at Airedale House, Sunbridge Road, Bradford into 37 flats. On new builds he has completed a 7 unit scheme at Linnet Lane, Liverpool.
min. loan (6 months)
10 month loan
The borrowers currently have 3 loans with CrowdProperty and works on this project have continued at a good rate and to a high standard. Our IMS Surveyor is due to inspect the project again in the next 2 weeks. He has reported that the remaining construction budget is sufficient to complete the development.
As Burton Enterprise Centre is a former Victorian school, the site coverage is low offering great shared parking and garden amenities to the proposed development. Its close proximity to Burton town centre further enhances its appeal. The developers have the experience to deliver this project having completed similar opportunities in the last few years.
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.