The Smithfield, Lower Bethesda Street, Hanley, Stoke ST1 3DE was a well known public house that traded for many years with varying degrees of success. It is situated on the corner of Lower Bethesda Street and Jasper Street and comprises a detached 2 storey traditionally constructed building with rendered elevations and pitched roof.
It is believed the property dates back to the early 1900s. Internally the property currently comprises 2 bars, a function room kitchen and amenity space, whilst the 1st floor is made up of a self contained 2 bed flat. The floor area totals 3,790sf (net internal).
Now closed the purchasers propose to convert the property into 10 self contained 1 bed flats together with 6 car parking spaces. The accommodation will be arroanged as follows:-
Unit 1 = 371sf
Unit 2 = 388sf
Unit 3 = 398sf
unit 4 = 388sf
Unit 5 = 355sf
Unit 6 = 452sf
Unit 7 = 366sf
Unit 8 = 334sf
Unit 9 = 387sf
Unit 10 = 527sf TOTAL = 3,966sf (gross internal)
Steve Barker-Hall and Matthew Raymond -Hubbard have formed a JV company to purchase this property known as:-
Smithfield Partnership Ltd
28 Copeland Drive,
Company Number 9984124
Having exchanged contracts on the purchase of the property they are due to complete the purchase on or around 17th May 2016.
He is purchasing the property for £195,000 and this has been verified by a recent RICS valuation. Steve will convert the property into the 10 units once he has obtained the necessary planning consent. Upon completion the RICS valuation has stated the 10 units will have an aggregate value of £718,500 or an annual rental of £45,000 - assuming each unit is let on a traditional AST.
With total costs (including purchase price, conversion costs, consultants, sale fees, contingencies and interest charge) amounting to £573,798, this scheme is expected to create a profit of £144,702 - 25.2% profit on costs.
CrowdProperty has agreed to lend Steve Barker-Hall £250,000 in 2 phases; £133,000 towards completion and £117,000 once planning has been determined.The length of the loan is a minimum of 6 months and a maximum 18 months.
The 2nd phase loan will be released at certain milestones during the works and as verified by our Independant Monitoring Surveyor. Initially the loan will amount to 68% LTV but once the conversion works have been completed the LTV will fall to 34.8%.
Steve's exit strategy is to sell and/or let the flats. Those he chooses to hold will be re-financed with a Commercial lender so that The Crowd can be paid back.
|Minimum 6 month Loan||Full 18 month loan period|
Smithfield Partnership Ltd. the purchasers of The Smithfield comprises two directors.
Steve Barker -Hall has been in the building trade for 30 years. His specialism includes Carpentry and all aspects of woodwork. In 2001 he ran a construction company called SBI, and specialised in all aspects of Building Works including Kitchen Installations, Electrics, Gas, Plastering, Tiling etc.
He had 20 employees. He closed this business in 2011 to spend more time in direct property investment and development, a side of the property business he had moved into in 2007. He now owns his own portfolio of HMO's, concentrating mainly in the student market.
Other specialisms include project management and he has undertaken a number of house refurbishments & conversions.
HIs Business partner Matthew Raymond Hubbard comes from a film production background. His company ‘Reels in Motion’ specialises in producing short films for Property Investors and the production of educational material.
It is through this key business relationship that he has been able to educate himself in Property Investing. From behind the camera he has seen and experienced first hand both the potential profit and personal fulfilment property investment can bring to hundreds of delegates.
Matthew is also a Director of the Staffordshire Chamber of Commerce and a board member of the Staffordshire Story of Place that helps him keep aware of all developments within the Stoke on Trent area. He also sat the Goldman Sachs 10,000 Business Program a 6-month business program for taking the UK’s most promising Businesses and Entrepreneurs to the next level.
For the past 2 years he has been shortlisted for the Entrepreneur of the Year award in the regional Sentinel Business Awards. He formed HMO Property Management Limited in 2014 a specialist HMO letting and management company to allow him to refocus away from his own management.
The company manages over 100 rooms with 3 staff from his offices in Stoke on Trent.
There are a number of reasons why we particularly like this development project.
First of all, the borrowers know the area very well and are fully aware of the regeneration happening, which means there should be a high demand for good accommodation driven by the creation of more city centre jobs.
For this reason, the borrowers are keen to keep the finished apartments as they believe there will be strong rental demand and good capital growth. The borrowers have experience of dealing with this kind of public house to apartment conversion project, so it is well within their comfort zone and they have an alternative exit in case they do not get the full planning permission they require.
The borrowers are putting a good amount of their own money into this project which means that by the end of the project the Loan to Value will have fallen to just 35%. This should be very reassuring for the lenders as it will be the lowest loan to value project on CrowdProperty so far which means that the borrowers only have to refinance 5 of the apartments (or sell 4 of them) to pay back the capital and interest to the crowd.
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