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Live Case Study

One of our latest projects

NOTE: These are the "Before" photos. Keep checking back for progress updates.

The Presbytery

This huge, residential property used to be part of a church that got demolished a few years ago. Originally listed as a seven bedroom property with four reception rooms and 2600 square feet of internal living space, we will be converting this property into a high-end, 11-bedroom, social, co-living space for professionals.

We have managed to secure this property on an option contract subject to achieving the required planning permission (use class: Sui Generis). This ensures that we can confirm the use of the property before purchasing it first.

Purchase Price£425,000
Planning Confirmation Date12 December 2018
Estimated Project Duration6-9 Months
Development Budget£130,000
Post-DevelopmentRe-Finance & Hold Asset

Area Analysis

As part of our detailed area analysis process, we have identified that there is a significantly under-served demand in the premium end of the room rental market.

As you can see by the blue line, there is a large number of people looking for rooms around the £600+pcm price point with the market not supplying anywhere near the required number of rooms. In fact, there are more people looking for rooms in the entire city than there are rooms available...with an oversupply in the £400-£450pcm range.

This is the reason that we are creating a premium product. Less competition from vendors and higher revenue means fewer voids and better returns...as well as having a high-end product to be proud of.

This ensures that the asset is producing very impressive, consistent, monthly returns. The specific location of the asset contributes to this with the availability of suitable employers in the local area and nearby transport links.

The Development

The property itself is generally in a good state of repair and the works required to achieve the end goal aren't largely structural.

Beyond some minor repairs to the dormers and running a damp-proof course, the only structural changes are knocking through the kitchen and dining room into one large space which involves removing a chimney stack, as well as adding en-suites to every bedroom and thus freeing up the bathroom clusters to be knocked through into additional bedrooms.

This will leave us with 11 fantastically sized bedrooms all with en-suites. The smallest bedroom being 11.6 sqm and the largest being 14.5 sqm.

Beyond that, the remaining works are simply cosmetic and we will be working with a very reputable interior designer to ensure that our target rental price point is achieved. We want this property to be wow people with its unique, modern and stylish interior with a hint of luxury.

The Strategy

We've contractually secured this investment subject to successfully achieving planning permission.

The expected planning decision date is 12th of December 2018. Once planning in place, we will complete on the purchase and commence the development immediately, likely early January 2019, and expect to finish the project within 6 months.

Upon completion of the development we will look to get tenants in place as quickly as possible and refinance based on the hugely enhanced commercial valuation on to a long-term product.

The Numbers

By developing an incredibly valuable, premium property we maximise its value and create a large buffer of equity to protect invested capital against any market downturns. This also allows us to secure a mortgage against to pull out a large chunk of the original capital, thus resulting in fantastic returns on a relatively small investment. As you can see, the development will likely result in the creation of over £100,000 as well as long-term annual returns of over 30%.

  • Initial Purchase: £425,000
  • Development Budget: £130,000
  • Acquisition Costs: £27,000
  • Expected End-Valuation: c£700,000
  • Equity Created: c£118,000
  • Estimated Rental Value: £79,200 per annum
  • Estimated Ongoing Costs (inc. mortgage): £38,600 per annum
  • Net Profit: £40,600 per annum
  • Annual Return On Investment: 31.2%

Become A Lender

Those annual profits will be shared as loan interest with our private lenders who help to fund projects in order to achieve consistent, passive, monthly income. We have an inbound pipeline of projects like this that you could help fund and earn very generous interest from.

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