Newly created Special Purpose Vehicle (SPV) limited company owned by two directors.
One director had spent many years as a project manager for a major construction company with some recent relevant experience in their own right. The other, a successful local businessman who had sold his company for a substantial sum and was investing in various diverse projects including this one with his co-director.
To minimise the borrowers' cash contribution and allow them to look at another project simultaneously.
The property is a large office block located in a seaside town on the south coast of England that the previous owners were struggling to let, so they put it up for sale.
Having set up an SPV limited company for property development purposes, our clients purchased the block for £300k cash in March 2013. They then obtained approval to convert to it into 18 x self-contained flats under permitted development rules.
Because of the directors’ previous experience and high net worth status, and because the building could be developed without having to adhere to any particular planning restrictions, we found a lender who was happy to lend at 60% of the gross development value. It was agreed that funding would be advanced in stages subject to sign off by the quantity surveyor.
The development is expected to be completed by January 2015.
Land Purchase Price: £300k
Build Costs: £1,008m
Gross Development Value: £2.061m
Loan Facility: £1.232m
Loan to Value: 60% x GDV
Interest Rate: 8%
Lender Arrangement Fee: £12,327
Lender Exit Fee: £24,655
Loan Completion Date: May 2014
This is just one example of how I've helped a client secure finance to develop a property. To see more of my case studies please visit my profile page. And if you have any funding requirements, please do not hesitate to contact me. My direct line and email address can be found below.