Set in a sought after catchment area, this end of terrace property with large side plot has three bedrooms, a family bathroom, with further guest WC and separate garage. The owner has planning permission to build another 3 bedroom house on the side plot.
The property has been secured with an agreed purchase price of £362,500 with an overage of £62,500 for the side plot land. The new build house will be complete in 9-10 months and will add value to the overall development scheme.
The property is in a residential area, close to schools, and has good proximity to transport links at Chesham Metropolitan tube station. All this means it has strong rental and good growth potential.
This strategy involves purchasing the current property with planning permission, and then building an additional new house. The initial purchase will be funded with a senior debt agreement. The new house build will be funded via development finance at 10% per annum, which after build will be redeemed by refinancing with a mortgage on the new property. The amount of Investor funds will be the difference between the total purchase and development costs and the mortgages on both property. Please note, investor shares will be issued after the construction of the new house when the two houses are refinanced with a new mortgage(s).
Once the properties' value reaches the Investment Trigger Value (where the property value has increased by 50% in relation to the total costs after the deduction of sales costs), the property will be sold and upon completion, the sale profits will be split 50/50 between the company and the Investors. For this deal, the Investor funds are 40% of total acquisition costs and the Investors receive 50% of the property sale profits, hence the leveraged (geared) projected return.
100% of the rental income after all running costs are paid to the Investors. This income will be subject to the individual's personal tax regime (please seek advice from a tax expert).