Crowd Funding HMO Manchester Real Estate Project Social Housing
Crowd Funding 4 Bed HMO Social Housing Project
www.crowdlords.com
Investment Summary
This 4 bed, terraced house has been fully renovated and converted for use as social housing. It is fully tenanted under a 5 year contract with the UK Home Office social housing supplier for the North West and so delivers contracted rental income with zero voids. The contract also includes maintenance and the property will be restored to its renovated condition at the end of the contract.
The LandLord team specializes in these properties, has completed 11 others in the area, and their plan is to grow their portfolio significantly over the coming years. As such this investment is to enable them to release capital to fund further developments. The purchase price is well below the current market valuation and Investors receive 100% of their share of both income and capital growth. This delivers 6.9% rental income return and a total projected annualized return of 12.5%.
Key Points
• Very experienced team
• Below market value
• Fully renovated conversion
• 5 year social housing contract
• Zero voids and fully maintained
• Annual net income of 6.9%
Return Summary
Hold Period 5 Years
Avg. Annual Income Return 6.9%
Total Income Return 34.3%
Total Capital Return 28.1%
Total Return 62.4%
Total Annualized Return 12.5%
The Property
This LandLord team are experienced in turning terraced properties into four self contained properties for the UK Home Office’s Social housing partner in the North West. As such, the team are familiar with the building regulations and requirements to fulfil this purpose. They are using CrowdLords to secure finance so that they can release equity to create more of these homes owing to a current housing crisis in the area. This investment will take place for a period of 5 years with projected total annualized returns of 12.5%. The property has been completely renovated to a very high standard to deliver four self contained units.
This property is already under a 5 year contract with the UK Home Office’s social housing partner for the North West therefore, there will be no voids, all maintenance is included and it will be returned at the end of the contract having been restored to its original condition.
Capital Investment
Purchase Price 115,000
Stamp Duty –
Legal & Professional Fees 1,070
Refurbishment Costs –
Contingency Allowance 1,500
CrowdLords Fees 6,188
Total Fund Required 123,758
Copyright CrowdLords 2015
The Offer
This is a 5 year investment that delivers a good combination of income and capital growth. In return for their investment, Investors will receive 100% of their share of both rental income and capital growth. This is projected to deliver 6.9% annual income and a total annualised return of 12.5%.
Income Distribution
Gross Rental Yield 11,400 0.0921
Operating Costs 800 0.0065
Corporation Tax 2,120 0.0171
Landlord Share 343 0.0028
Distribution Yield 8,137 0.0658
Capital Return
Value Creation 150,000
Contingency 1,500
Market Growth 23,891
Sales Costs -2,939
CL Growth Fees -5,163
Corporation Tax -8,706
Capital Return to Investors 33,41
Risk Profile
CrowdLords uses a standard Risk / Reward assessment to facilitate easier comparisons between investments. According to this system this project is rated as B for the following reasons:
• The LandLord team has a good track record and a proven capability
• The contract with the social housing supplier means reliable income for the entire investment period.
• The contract includes maintenance and repairs at the end of the contract
• The investment period is for five years ameliorating some of the price fluctuation risk
Risk Rating
Investment Period A
Location & Market D
Micro Location C
Level of Development A
Developer Track Record A
B
The Area
Salford, and Greater Manchester in general are still recovering from the 2008 property crash and are lagging behind the rest of the UK. However, the last 3 years has seen steady improvement and property price increases are expected to be inline with the rest of the UK over the coming 5 years.
With the introduction of HS2, it is believed that there is potential for property prices to improve, as it potentially creates a commuter community for London in the Manchester area. Despite significant developments in the North West there is still a big shortage of affordable housing which should further contribute to the rise in property prices.
Risk Warning
CrowdLords Limited is an appointed representative of Oxygen Ventures Limited, which is authorised and regulated by the Financial Conduct Authority (No 208188). CrowdLords Limited is registered with the Financial Conduct Authority (No 656561).
Investment in property comes with risks as well as the possibility of rewards. These investments should be considered to be long term investments as it may not be possible for you to get your capital back before the term expires it may not be possible for you to get your capital back before the term expires and you could suffer loss of capital. The value of the property can go down as well as up and such fluctuations will affect the amount of capital you receive back at the end of the term of the investment. Any regular payments offered may also be affected by factors such as the market rental value, periods of non-occupancy and unforeseen refurbishments. There is no secondary market for investments in unlisted securities. The property investments offered here are illiquid, you may not be able to sell your investment to third parties and your capital is at risk Any references to past or forecasted performance should not be relied upon as a guarantee of future results. If you are in any doubt, you should seek advice from an FCA regulated adviser. CrowdLords cannot advise you on whether the merits or risks of an investment are right for your circumstances.
Copyright CrowdLords 2015
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