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| DEVELOPMENT FINANCE: CASE STUDY 1 |
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| | LOCATION: | Nottinghamshire | | PROJECT: | 58 x 2 bed flats new build | | COMMENTS: | New market for flatted developments | | GDV COSTS (Excluding lender exit fee)
PROFIT
| £8900k £6700k £2200k | | | FUNDING LTC LTV GDV INTEREST RATE LENDER COMPLETION FEE LENDER EXIT FEE DEVELOPER RETAINED PROFIT | £6700k £67k £400k £1800k | 100% 89% 75% BASE PLUS 2% 81% | | DEVELOPERS CONTRIBUTION CASH LAND EQUITY TOTAL | £NIL £850K £850k | | | DEVELOPERS RETURN | | 211% | | |
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| DEVELOPMENT FINANCE: CASE STUDY 2 |
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| | LOCATION: | Tyne and Wear | | PROJECT: | 20 Houses new build | | COMMENTS: | Business start-up, first project | | GDV COSTS (Excluding lender exit fee)
PROFIT
| £5200k £3740k £1460k | | | FUNDING LTC LTV GDV INTEREST RATE LENDER COMPLETION FEE LENDER EXIT FEE DEVELOPER RETAINED PROFIT | £3380k £34k £130k £1330k | 90% 82% 65% LIBOR PLUS 3.5% 91% | | DEVELOPERS CONTRIBUTION CASH LAND EQUITY TOTAL | £360k £400k £760k | | | DEVELOPERS RETURN | | 175% | | |
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| development finance: case study 3 |
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| | LOCATION: | West Midlands | | PROJECT: | 18 Houses & 40 Flats new build | | COMMENTS: | | | GDV COSTS (Excluding lender exit fee)
PROFIT
| £7800k £5790k £2010k | | | FUNDING LTC LTV GDV INTEREST RATE LENDER COMPLETION FEE LENDER EXIT FEE DEVELOPER RETAINED PROFIT | £5450k £ 55k £ 312k £1698k | 94% 87% 70% LIBOR PLUS 3.5% 91% | | DEVELOPERS CONTRIBUTION CASH LAND EQUITY TOTAL | £NIL £ 500k £ 500k | | | DEVELOPERS RETURN | | 340% | | |
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| DEVELOPMENT FINANCE: CASE STUDY 4 |
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| | LOCATION: | Cheshire | | PROJECT: | 6 flats mix new build/conversion | | COMMENTS: | Adverse credit/non-status funding | | GDV COSTS (Excluding lender exit fee)
PROFIT
| £840k £500k £340k | | | FUNDING LTC LTV GDV INTEREST RATE LENDER COMPLETION FEE LENDER EXIT FEE DEVELOPER RETAINED PROFIT | £500k £ 5k £ N/A £340k | £100k 68% 60% 0.5% pm facility fee 0.5% pm interest 100% | | DEVELOPERS CONTRIBUTION CASH LAND EQUITY TOTAL | £NIL £ 233k £ 233k | | | DEVELOPERS RETURN | | 145% | | |
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| DEVELOPMENT FINANCE: CASE STUDY 5 |
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| | LOCATION: | Oxfordshire | | PROJECT: | 2 Barn Conversions | | COMMENTS: | Senior debt (75%) and mezzanine (25%) | | GDV COSTS (Excluding lender exit fee)
PROFIT
| £1265k £1008k £ 257k | | | FUNDING LTC LTV GDV INTEREST RATE Senior debt & mezzanine
LENDER COMPLETION FEE Senior Debt
Mezzanine
LENDER EXIT FEE Mezzanine fixed fee 9months DEVELOPER RETAINED PROFIT | £1000k £ 7.5k £ 2.5k
£40k
£217k
| 100% 100% 80% Base plus 2% | | DEVELOPERS CONTRIBUTION CASH LAND EQUITY TOTAL | £NIL £ 25k £ 25k | | | DEVELOPERS RETURN | | 1028% | | |
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| CASE STUDY: DEVELOPERS EQUITY RELEASE |
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| - Tyne and Wear
- 12 out of 20 completed new build houses unsold
- Bank debt £2050k
- Value of unsold stock £3320k
- Re finance of stock at £2725k, LTV 82%
- Lender retained 6 months interest
- Interest charged at base plus 5%. Completion fee 1%. No exit fee.
- 12 month facility, 3 months minimum.
- Plot release fee £200
- Raising c. £500k for developers to use for deposits on further sites.
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| CASE STUDY: PLANNING GAIN (1) |
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| - Kent
- Former Petrol Station
- Restriction by vendor for site being used as petrol station, and therefore NIL/nominal ‘as is’ value
- Purchase price £500k
- Forecast valuation of site with planning consent for 10 flats £1050k
- Funding raised £400k (80% LTC) on following terms:
Interest at Libor plus 3.5% rolled up 12 months facility Completion fee £4k Exit fee £4k Pre-planning fee £50k, subject to receipt of planning consent and payable upon sale or development of site Security included PG £100k. | |
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| PLANNING GAIN: CASE STUDY (2) |
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| - Warwickshire
- Former bank chambers, vacant
- ‘as is’ valuation £375k
- Purchase price £430k
- Expected valuation with planning consent £800k
- Funding raised of £375k (100% of as is value and 87% of purchase price) on the following terms:
Interest at Libor plus 3.5% rolled up 12 month facility Completion fee 1% Pre planning fee of £50k, subject to receipt of planning consent and payable upon sale or development of site. Security included PG and inter-company Guarantee | |
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| CASE STUDY: BRIDGING (1) |
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| - Derbyshire based developers exchanged unconditional contracts on purchase of a derelict industrial unit with a 6 month delayed completion.
- In the interim period between exchange and completion they obtained planning consent for demolition of unit and erection of 32 flats, with a valuation of £1.2M
- Purchase price was £350k plus s.106 and disbursements and funding raised was £840k (70% of value and over 100% of purchase price) providing clients with surplus cash flow for expansion
- Terms: 12 month facility, minimum term 3 months, interest at 1.5% per month, no completion or exit fees.
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| CASE STUDY: BRIDGING (2) |
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| - Staffordshire
- Developers had an option to purchase derelict factory, subject to planning at £950k plus s.106 and disbursements.
- During option period they improved planning consent and obtained permission to erect 46 flats with a valuation of £1.75M
- Land bank facility required for 6 months pending demolition of factory and further ground investigations.
- Funding of £1.05M (60% LTV and 100% of purchase price).
- Terms: 6 month facility, no minimum term, interest at 1.25% per month, completion fee NIL, exit fee 2%
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| CASE STUDY: BRIDGING (3) |
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| - Hertfordshire
- Purchase of vacant MOT workshop and yard
- Purchase price £450k unconditionally. Valuation ‘as is’ £475k. Clients intention to apply for planning consent for residential use
- Funding of £404k (85% of value and 90% of purchase pric)
- Terms: 12 month facility, 90 day minimum term, interest at 1.75% per month, completion fee 1.25%
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| CASE STUDY: BRIDGING (4) |
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| - Bedfordshire
- Re finance of office premises(mix of owner occupied and investment) to capital raise and repair credit
- Valuation £950k. Current debt £525k
- Funding of £665k (70% LTV) to repay bank and raise c. £125k for cash flow
- Terms. No maximum term, 3 month minimum, base plus 6%, completion fee 2%, 3 months interest on redemption.
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| COMMERCIAL MORTGAGES: CASE STUDY (1) |
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| - Restaurant with residential living area (semi commercial) in Hertfordshire
- Start- up, industry experience as an employee
- Turned down by banks as start-up
- Freehold bricks and mortar valuation £450k
- Funding raised of £383k (85% LTV) on self-cert basis
- Terms: base plus 5.65% over 30 years. NIL completion fee. ERP of 5% for 6 years and 5 year interest guarantee.
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| COMMERCIAL MORTGAGE: CASE STUDY (2) |
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| - Travel agents with HMO (semi commercial) in Bedfordshire
- Client was a sitting tenant and offered Freehold at a discount for quick completion.
- In second year of trading, so no accounts available.
- Purchase price £285k against valuation £365k
- Funding raised of £256.5K (90% of purchase price as sitting tenant) and 70% of valuation.
- Terms: Libor plus 3.75% over 25 years, interest only for 3 years, completion fee 1.95%. ERP 3% first 3 years, 1% thereafter.
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| COMMERCIAL MORTGAGE: CASE STUDY (3) |
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| - Building contractor based in Buckinghamshire
- Due to large bad debt, suffered financially, with demand from bank for repayment of commercial mortgage and overdraft
- Office, warehouse and yard valued at £875k
- Bank debt £515k
- Funding raised of £569k (65%LTV) used to repay bank and provide cash flow.
- Terms: Initially a non-status bridge with interest at 1.35% per month rolled up for 6 months taking loan to 70% LTV. Next 6 months interest charged at 0.75%. At month 12 loan converted to a commercial mortgage repayable over 15 years at Libor plus 2.5%. Completion fee of 2% at both bridging and commercial mortgage stage.
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| development finance: case study 6 |
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| | LOCATION: | Northamptonshire | | PROJECT: | 26 Houses new build | | COMMENTS: | | | GDV COSTS (Excluding lender exit fee) PROFIT | £6630k £5320k £1310k | | | FUNDING LTC LTV GDV INTEREST RATE LENDER COMPLETION FEE LENDER EXIT FEE DEVELOPER RETAINED PROFIT | £4950 £50k £165k £1145k | 93% 90% 75% LIBOR plus 2.5% 87% | | DEVELOPERS CONTRIBUTION CASH LAND EQUITY TOTAL | £370k £150k £520k | | | DEVELOPERS RETURN | | 220% | | |
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| DEVELOPMENT FINANCE: CASE STUDY 7 |
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| | LOCATION: | Middlesex | | PROJECT: | 5 x Houses, 3 x Flats, 5 x affordable flats, 4000 sq ft office space | | COMMENTS: | Big step up for developers | | GDV COSTS (Excluding lender exit fee) PROFIT | £7758k £5598k £2187k | | | FUNDING LTC LTV GDV INTEREST RATE LENDER COMPLETION FEE LENDER EXIT FEE DEVELOPER RETAINED PROFIT | £5200 £52k £230k £1957k | 95% 85% 67% Base plus 1.75% 89% | | DEVELOPERS CONTRIBUTION CASH LAND EQUITY TOTAL | £300k £500k £850k | | | DEVELOPERS RETURN | | 130% | | |
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