|Criteria||From a+ to d||Project rating|
Macro Location Analysis
EvoEstate Risk rating is of an informative nature only & can not be considered investment advice.
Loan To value
JMoore A Properties Limited (the “Borrower”)
House at 25 Hollybank Road, Drumcondra, Dublin 9.
A first fixed charge over the property and a floating charge over the shares of the company.
€560,000 (€535,500 initial drawdown, €24,500 second drawdown)
7% per annum (paid monthly)
24 months (12 month’s minimum)
The purpose of this loan is to fund the acquisition of the property at 25 Hollybank Road. The property comprises a mid-terrace, three storey, period property with a 3 storey return currently split into 9 x self-contained residential units (Pre ’63). To the rear of the subject property is a standalone single storey building of concrete block construction and benefits from rear access.
The building is being acquired for €800,000 and has an annual rental income in excess of €82,000.
A survey of the building has noted that the main structural elements of the property are in relatively good condition with no significant issues. The property has been maintained to a reasonable standard but localised repairs and upgrading works are required in a number of areas.
The borrower has signalled it is their intention to get the building up to the relevant safety standards, and to enhance the value of the property by making the necessary repairs and modifications. Indeed, Property Bridges will be holding some funds back until this work is completed and certified.
Property Bridges will be providing 67% of the acquisition price €535,500. The remainder, €264,500 will be provided by the borrower. A further €24,500 will be released after remedial works are completed by the borrower.
The term of the loan is 24 months and has an interest rate of 7% per annum. Lenders will be receiving interest on a monthly basis.
Property Bridges has compiled this report on behalf of our lenders and have taken reasonable care to ensure the information provided is authentic and accurate. Please be aware that returns are not guaranteed, and your capital is at risk. Please also note that the term is not certain and may be extended under certain circumstances. Investors should seek their own advice before investing.
The borrower JMoore A Properties Limited is an experienced property investor who has a portfolio of 14 properties. The company strategy focuses on the acquisition and modification of pre-63 assets in D1, D3 and D7. They have a team of builders and experience regenerating these types of properties.
Property and Location
Hollybank Road has long been considered as one of the most prestigious locations in Drumcondra with impressive period homes of varying size found nearby to the amenities of the village as well as both Drumcondra Train Station and the city centre.
There are numerous sporting and recreational amenities within the immediate area such as Griffith Park and Na Fianna GAA. The local area is well serviced by bus and railway at nearby Drumcondra and Dublin City Centre is within easy walking distance.
The principal security for this loan is a charge over the Property and a charge over the shares in the Borrower’s company.
The passing rent of the property is in excess of €82,000. This provides a monthly income of €6,833.33. The borrower will be working to improve the property and increase the gross income.
The payment profile of the loan is represented below. The borrower is required to pay €4,685 per month which includes interest and principle. At the end of 2 years the balance of the loan will decrease to €500,967.38.
With a passing rent of €6,833.33, less expected management fees of 10% the rent to mortgage cover is 1.33 times. This is a good starting position for the loan with a comfortable amount of cover. As you can see from the profile below, the payment of principle ensures the financial profile of the loan over time. In addition, the borrower will be carrying out remedial work on the property and improving the overall value of the asset.
The tenancies are performing and many of the tenants have been in the building for some time. The borrower has multiple properties in the area and can accommodate tenants while carrying out upgrading works on the property. This will be done on a phased approach with only one tenant moved at a time.
Key Risks and Mitigations
At the end of 2 years the balance of the loan will be €500,967. At this stage the borrower will seek to refinance with a mainstream lender. With the building upgraded and the overall LTV position improved the likelihood of getting refinanced with a mainstream lender would be strong. If the borrower cannot obtain a refinance, they would consider selling the property to improve their equity position on the rest of their portfolio.
This a loan to fund the acquisition of a pre ’63 property in north inner city Dublin.
|30.08.2021||Paid||No||05 September 2021, 13:36|
|30.09.2021||Paid||No||06 October 2021, 22:02|