Monasterboice Refurbishment

 Development loan
Drogheda,
Ireland
8%
Annual yield
70%
LTV
Term: 16 months
Mortgage rank:
First
Interest payment schedule:
At Project Completion

Descripton

Offering Description

Credit Report

Borrower

Chestnut Wood Developments Ltd

Property

Tinure, Monasterboice development, including 2 existing houses.

Security

First legal charge over the property

Facility Amount

€630,000

Development Value

€925,000

Interest

8% P.A.

Purpose

Bridging Facility

LTV (Loan To Value)

70%

Term

16 months (4 months minimum)

Repayment

Property sales

 

Loan Overview

The Borrower is an SPV company set up to purchase the Property. They have requested that we provide them with a €630,000 bridging facility for a period of 16 months (4 months term certain), secured against the Property. The Borrower requires this facility to assist them in the purchase of the Property.

The interest rate for lenders on this loan will be 8% per annum. Our LTV (Loan To Value) will be 70%.

The Property comprises two existing houses and sites for five houses for which the planning has lapsed, accordingly we have attributed no value to the sites. The Borrower is presently carrying out works to one of the completed houses and hopes to be able to place it on the market, shortly after completion of purchase of the Property. The Borrower then plans to sell the second house later in the year and reinstate the planning for the 5 sites.

Risk Warning

Although all our loans are secured against property, your capital is at risk and returns are dependent on the Irish property market. Estimated returns and past performance are not reliable indicators of future returns. Property Bridges provides due diligence and work with independent professional service firms to ensure your loans are thoroughly assessed and accurately represented. Please read Property Bridges Terms and Conditions for more detailed terms and conditions to which users of propertybridges.com are subject.

The Borrower

The party behind the Borrower is an experienced property owner, who has a sizable portfolio of residential properties. In the last five years, their focus has switched from buying properties and holding them, to sourcing properties that require renovation and selling them on. The Property is a good example of where the Borrower can create significant added value, which is quickly realisable.

Security

The loan will be secured by a first legal charge over the Property which comprises two houses and sites for five houses, for which the planning has expired. There will also be a charge over the share debenture of the Borrower.

Property

We have commissioned an independent valuation on the 2 houses, which has confirmed the valuations as follows.

House                     Sq ft             Description                        Valuation                

House 1                  3052             Bed, 2 story detached          €475,000

House 2                  3052             Bed, 2 story detached          €450,000

The Borrower is currently carrying out works on the house which is unoccupied so that it can be immediately put on the market once the overall property has been purchased. They are doing this at their own risk, given that they do not own the Property yet. The majority of the sales proceeds will be used to repay a portion to the loan facility, with the remainder of the proceeds being used to reinstate the planning for the five sites. We have attributed no value to the sites in their current state, however, if planning is successfully reinstated, they would be valued at least at €50,000 each.

The Borrower plans to place the second house on the market in the latter half of this year. The proceeds of the sale of this house will fully repay the facility.

Location

The overall site is 3.75 acres and is located in Tinure which is a small village near Monasterboice, Co. Louth, and is a 40-minute commute to Dublin Airport. It comprises 2 completed houses, one of which is rented out, and as previously mentioned, 5 sites for houses with lapsed planning. 

Exit

It is proposed to have a term of 16 months on this facility. This term will provide them with the ability to repay the loan facility from the sales proceeds from the existing houses. As previously stated the loan will be partially repaid from some of the proceeds of sale of the first house, which will be immediately on the market. The remaining portion of the loan will be repaid from the proceeds of sale from the second house. The Borrower will have the ability to repay the facility after month 4 either partially or in full.

Conclusion

The Borrower has requested a loan facility to assist them in the purchase of a large site, with two existing houses, located in Tinure, Co. Louth, near the M1. The loan will be repaid in two tranches from the sale of the 2 houses.

The Borrower is a Property Developer with a good track record of completing similar projects. A significant portion of the loan will be repaid in the short term from the sale of the first house. The Borrower has carried out substantial works to the unoccupied house so that it can be put on the market immediately.

Given that there is no development risk, the quality of the Borrower, and the level of return for our Lenders, we are happy to recommend this facility.

Project originated by:

Documentation

8%
Annual yield
70%
LTV
Term: 16 months
Mortgage rank:
First
Interest payment schedule:
At Project Completion