Regulated Business

SPV1010

Prescot, Merseyside, L34
8 Units | Sell For Profit Strategy

41.37%

Targeted ROI

£2,821,455.79

of £2,995,151.79

Investment Term

18 months

Funded

94.20%

Investment Opportunity

JaeVee has agreed a joint venture with Graeme Middleton in offering equity investors the opportunity to invest in the development of a residential scheme based in Prescot, Knowsley. Planning Permission has been granted under planning reference 18/00785/FUL and the decision notice and section 106 are available to view in Documents above.

The development involves the erection of 7 detached houses and the refurbishment of an existing victorian building into an 8th detached residential dwelling, with associated car parking and landscaping works. It's an ideal time to invest in the development of homes with gardens due to buyers wanting more outdoor space as a result of Covid-19.

The residential units comprise of 3 x four bedroom detached houses and 5 x five bedroom detached houses, all of which are to national space standards.

All of the 8 units will be sold on the open market for a targeted GDV of £3,485,000, which has been certified via a red book valuation from Matthews & Goodman (available to download in the documents section above).

The GDV, which is the collective value that all 8 properties could be sold for, is detailed within the Investment Memorandum (available to view in Documents above). When determining a GDV, one uses sold comparables for similar properties in and around the local area typically within 5 - 10 mile radius for new build housing schemes. Details of the sold comparables we have used to determine the GDV, are also available for your review via the Investment Memorandum.

Construction costs have been priced at £1,146 per sq-m with an additional £82,500 allocated for demolition and asbestos removal. We have also allocated a further 10% of the total build cost towards professional fees and a further 5% contingency has been added to allow for additional construction costs to use, if required.

These numbers are all detailed within the Financials section below.

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Property Summary

West Street is located close to the centre of Prescot, Knowsley, being approximately 1 mile from the town centre.

The town centre of Prescot hosts a variety of boutique shops, independent cafes and national chain supermarkets. Prescot town centre is also home to number of leisure options including Knowsley Safari, Prescot Museum, a number of bars, restaurants and is also home to four golf courses.

The site is situated approximately 1.1 miles away from Prescot railway station which offers regular services into Liverpool taking approximately 23 minutes and Manchester taking approximately 1 hour 23 minutes.

Prescot is located close to a number of A roads that lead to other towns and cities including Liverpool, Preston, Manchester, Wigan, Warrington, Macclesfield and stockport, all of which can be reached within an hour or less.

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Exit Strategy

The exit strategy is to sell the individual units on the open market.

The sale estimates have been supported by a valuation from Matthews & Goodman LLP. The valuation can be downloaded from the Documents section above.

Should the planned exit of selling the 8 open market units experience delays (even though 6 months has been allocated for a sales period) an alternative option is to rent the properties instead. Mason Owen, a local property consultants have provided market rental commentary confirming that the units can be rented for a total of £141,000 per annum.

The current buy to let portfolio mortgage criteria permits up to 75% LTV against the GDV, which calculates as £2,788,000 which pays off the total debt of £2,671,456.

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Operational Delivery

With all JaeVee development projects, the SPV (in its role as the client) enters into a JCT 2016 design & build construction contract whereby the responsibility in delivering the project rests with the Principal Contractor.

The Principal Contractor has agreed to a fixed total contract sum of £1,789,842 (with an additional 5% contingency fund and 10% professional fees fund) in delivering the project within the set time frame of 12 months.

As the Principal Contractor is holding the design and build contract, it will procure sub-contractor packages to assist in delivering the project. The SPV has the right to request copies of the JCT subcontractor contracts which will be taken care of by JaeVee's in-house project management team. This forms part of JaeVee's role as Employers Agent, overseeing the project from inception through to completion (the pre, during and post construction phases) assisting the property developer throughout.

As per UK Finance regulations, a structural warranty will be issued after the building regulations completion certificate of work. This will provide a 10 year structural warranty which is a mandatory UK Finance requirement for mortgage lenders to be able to lend on each dwelling. The cost of this is covered via the allocated professional fee fund.

The Property Developer will also be uploading monthly construction updates to the JaeVee system throughout the duration of the project thus allowing investors to see the progress in real time.

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Development Team

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Financials

The following financials are calculated against our Sell For Profit model.
Gross Development Value £3,485,000.00
Total Cost £2,977,973.91
Purchase Price £500,000.00
Stamp Duty £14,500.00
CIL £0.00
Construction Cost £1,789,842.00
Furnishing Cost £0.00
Professional Fees £178,984.21
Contingencies £89,492.10
Legals £50,000.00
Surveys & Searches £5,000.00
Building Regs £0.00
Insurance £5,000.00
Council Tax £0.00
Business Rates £0.00
Utilities £4,000.00
Senior Debt Interest £215,955.79
Mezzanine Interest £85,500.00
Sourcing Fee (1.0%) £5,000.00
Equity Raise Fee (5%) £29,699.81
Boost Fund (1.00%) £5,000.00
S106 £17,178.00
Gross Profit £507,026.09
Selling Fees -£52,275.00
Exit Fee -£24,250.00
Corporation Tax (19%) -£78,531.39
Net Profit £334,791.70
Net Profit Margin 11.24%
Targeted ROI (40% of Margin) 41.37%

What happens next after investing?

  1. Your funds will be held in trust by MangoPay until the total raise is achieved
  2. Once the total raise is achieved, the funds will be automatically transferred to the SPV bank account
  3. The shareholders agreement is issued for signature (electronically)
  4. Once signed by all parties, the development agreement is issued for signature by the developer (electronically)
  5. Once the development agreement is signed, shares are issued in the SPV
  6. Project commences
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Further Information

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Investment Calculator

Investment

Targeted ROI

Share Price (1%)

£8,092.40

% Share

2.47%

All the above figures are targeted and subject to taxation based on personal circumstances. Corporation tax has been taken into account, based on a rate of 19%. Capital at risk: before investing please read the risk warning.

How do we mitigate risk?

Documents

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Location

Proposed Plans

Plot 1.jpg Plot 4.jpg Plot 5.jpg Plot 2.jpg Plot 3.jpg Plot 6.jpg Plot 7.jpg Plot 8.jpg

Team Behind It

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Investing in JaeVee involves risk, including loss of capital and illiquidity and it should be done only as part of a diversified portfolio. Investments made through JaeVee are not covered by the Financial Services Compensation Scheme (FSCS). Please read our full risk warning before deciding to invest.

Capital at risk. Read more.