LOAN TERMS Summary: A dated 3 bed terraced house (via auction) in need of refurbishment purchased for £39,999. The loan is for 75% of the purchase price. There are no structural
works, development or planning issues. It is a standard refurbishment and
Investment Type: Loan
Raise Amount: £25,000
(min) to £30,000 (max)
Interest payment: 0.5%
monthly in arrears for the calendar month on the 10th day of the
following month Projected loan start date: 12th
November 2017 Loan term: For up
to 15 months
Repayable on refinance but
subject to a minimum of 12 months interest payments even if paid back early
Minimum Investment: £500 Security: First charge over the property
will be taken on behalf of the lenders Interest Apportionment: Where funds
are received from the 1st to the 15th of the month,
pro-rata payment 10 days after month end. Where funds are received from the 16th
to month end, the pro-rata amount is added to the following month’s payment. Note: As
the project progresses there may be another raise on this deal to fund some of
the refurbishment works. If this occurs a second charge will be offered that
will sit behind the first charge offered here.
This is an opportunity to invest
in a refurbishment project in Northumberland. The developer has purchased a large 3
bedroom, mid terraced house of standard construction in an area of good rental
demand by LHA tenants. It is cosmetically dated but otherwise structurally
Due to the purchase price & condition it is currently unmortgagable, which is why the developer has turned to Peer to Peer Lending. The funds will be used for the (partial) acquisition cost of this property. The plan is to add value
through a full refurbishment and modernisation before tenanting and refinancing
it for a long term hold.
There is no structural work,
alterations or additions, permitted development or planning gains related to
this project. This is a standard refurbishment project and is typical of the types of projects managed by this developer previously.
THE SECURITY OFFERED A first charge be registered against the property on
behalf of the investors as security for the loan provided. This charge will allow lenders to seek
recourse from other company assets should the securitised property prove to be
insufficient to repay the debt in full.
ABOUT THE FUNDRAISER
I am a South African qualified chartered accountant
having done my training with a large mid-tier firm.
As a student I did my
thesis on pensions and their performance and concluded that one could not rely
on a pension. Whilst studying, I ran a short term bridging finance company
that used residential property as security for the loans advanced. The profits
from this were invested in property – and the equity from the growth in the property
was later used to grow the business. I ran this for approximately 10 years before coming
to the UK in late 2006. I undertook various property training
courses, was a regular at many networking meetings and started to amass a small
personal library of investment property books. Ambitious for success I ended up
selecting a strategy that was not right for me given my circumstances –
although would only realise this years later.
When I first arrived in the UK I worked in the real
estate and construction division of one of the Big 4 audit and accounting firms
in London for 18 months before leaving to invest in professional HMO’s in
Reading. Having done the fundamentals well, the rooms
were always full and the rents always received. However, the crash of 2008
affected the business model significantly.
As a result of the credit crunch, the business stalled
and the next few years were spent repaying overdrafts and credit cards from the
surplus cash flow. I also returned to work as an accountant for a commercial
property firm looking after the client accounts of our UK management operations. This experience taught me a significant amount about personal finances and risk
In 2011 I undertook some additional formal and informal property
training with a view to learning how the successful investors had built their
wealth and portfolio. In most cases, a significant portion of their success was
as a result of first building up a large base of buy to let’s and developing
the various skill sets and systems around this. Accordingly, I set out to
replicate this which is what I have been doing for the last few years.