Remember the high quality Chessett’s Wood development in Lapworth, which paid annualised returns of up to 13.8% after just 7 months? Or the luxury St. Bernard’s Road development in Solihull paying 14.06% on a very reassuring Loan to Value (LTV) of just 55%?

Well, for those who happily capitalised on those – or even those who missed out – CapitalStackers is pleased to offer a third opportunity to invest in the same highly respected developer – Avalanche Capital and their joint venture construction partner, HCD Developments.

It’s our strong belief that HCD’s distinctive quality of workmanship is a key factor in the early property sales on their previous schemes.

The current opportunity is to invest a total of £620,000 in the development of two large luxury houses, in an established and popular residential road in Solihull – just ten minutes walk from the prosperous town centre and its rail station with links to London and only six miles from Birmingham Airport. Target annualised returns will range between 10.44% and 14.33% for LTV ratios of 52% to 63%.

To be clear, this means that if Layer 2 investors were to suffer a loss, the property would need to

fall in value by 37%. For Layer 1 investors to suffer loss, the value would have to fall by 48% – making for highly attractive risk adjusted returns.

The bulk of the finance – £1.345 million for construction works – is being put up by NatWest and the Borrower has substantial “skin in the game” with its cash equity of £540,000. In addition, the boost in site value from the granting of planning permission amounts to at least £200,000.

The funding base case on which the deal and its risk ratios are structured, assumes both properties are built out and remain unsold for the term of the loan. This follows the usual cautious approach adopted by CapitalStackers. Our sensitivity analysis assumes that at least one buyer will be secured during construction, leading to one house being sold the month after completion – and the second house selling two months later, with the conservative as

sumption of both being sold at a discount of 15% to value. Even taking this into account, risk ratios remain conservative at 60% LTV for Layer 1 investors and 73% for Layer 2.

The site currently accommodates an unoccupied single property in need of substantial renovation, so the proposal is to demolish this and build two very high specification detached houses, on three floors with single integral garages and off-road parking.

Investors are invited to offer loans of £5,000 upwards when the bidding opens at noon on Monday 18th March 2019. This is expected to be an extremely popular auction owning to the quality and track record of the developers and the deal itself, so early participation is recommended.

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

Midwood House in Widnes town centre was bought by Osborne House Ltd for cash around three years ago and half the office space converted into 17 apartments to test the local market for short-stay, single tenants (think workers away from home on medium to long-term contracts, looking for a cost-effective alternative to hotels). 

The results were impressive. It was fully let within 2 months and, after costs and allowances, is yielding a solid annual income of £65,000. 

The gated apartments, available at an attractive all-inclusive rent of £567 per month, come with secure parking and are within an easy commute of Runcorn, Liverpool and Warrington. As such, they have proven appeal to businesses looking to save on staff accommodation or private individuals working away from home.  

Having proven the market, OHL are now converting the remaining space into another 17 apartments. This will double the net income to £130,000. 

Since the property is already generating income with good interest cover and Loan-to-Value levels, this presents a lucrative opportunity for all those who have invested. Investor returns have been pegged in the range 6.9% – 7.5% p.a. over 36 months. Net income from the first phase is sufficient to provide interest cover of 135% – meaning there would have to be a substantial fall-off in demand before interest payments are at risk.  

Once the refurb of the remainder is complete, the ratios will improve dramatically, with interest cover increasing to 250% and LTV falling from 65% to 35%. 

Of course, while the ongoing construction still carries a small degree of risk, in this case that risk is mitigated by the appointment of the same contractor as successfully completed the first phase works, along with an independent monitoring surveyor who is under a duty of care to CapitalStackers’ investors. And, of course, income will continue to flow from phase one pending the new units coming on stream. 

 

About the developer  

OHL is a highly profitable, conservatively-geared company with gross assets valued at £7.4 million in April 2018. Net worth is around £6.5m. The shareholder directors have been known to the principals of CapitalStackers for over 25 years. 

For HMRC compliance reasons, this deal is not eligible for pension fund investment. 

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

CapitalStackers investors were invited to benefit from the refinancing of a popular ongoing project, which was already at an advanced stage of construction, with practical completion scheduled for May 2019.  

The original auction for the Boothferry Road development in Hesslewest of Hull city centrewas sold out in 24 hours, with investors bidding returns between 11.07% and 14.45% for Loan-to-Values of 63.3% and 69.8%, respectively. 

Hampshire Trust Bank  the senior debt provider – had increased their facility to cover cost increases caused by:  

  1. bad weather – necessitating deeper foundations and a temporary road, and 
  2. cost inflation for materials and labour. 

Of course, cost increases are never ideal, but we regarded these as fair. However, the developer wished to access additional working capital and restructure the funding to allow them to expedite the second phase and take advantage of the current, very positive sales momentum.  

In considering their approval, CapitalStackers’ risk assessors were impressed by the experience of the team (Craig Swales and Steve Vessey Baitson of Applemont), and the high level of reservations on the houses (mainly from first-time buyers with no chain).   

Applemont is an experienced player in housebuilding and general construction around East Yorkshire and Hull. Their knowledge of the Hull owner occupier market is sound – and clear evidence of this is shown by the keen early sales interest in the Hessle scheme.  

Eleven reservations have been taken on the fifteen new houses in the first phase and, of these, only one purchaser has a house to sell. Among the initial purchasers are seven first time buyers and six have paid a reservation fee. Six viewings over a recent weekend suggest ongoing demand for the scheme.  

The agreed sales prices already exceed the Savills valuation by £27,500 and currently stand at £2,057,500 in aggregate 

Craig Swales of Applemont said of the new deal, “It’s fantastic for a small developer to have this facility and flexibility. The ability to refinance on the move gives us much-needed agility in a fast-changing world and CapitalStackers make it so easy to adapt our scheme and raise the right money when needed”. 

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

Berwyn View – the attractive and rewarding (for CapitalStackers investors) residential development in the pretty Cheshire village of Malpas – is moving forward with investors now funding Phase 2A of the development.  

Of the eight houses built in Phase 1 of the 22 unit development, five are already sold, two are complete and one is nearing completion (and under offer). Investors received annualised returns of between 10.70% and 15.62% in the nineteen months leading up to the refinance in August 2018. 

CapitalStackers orchestrated repayment of the first phase by refinancing with the original senior lender, RBS, enabling the developer to stay within RBS’s lending criteria and also free up some capital to start on Phase 2 infrastructure works. 

To say that the refinancing deal with this very talented developer was popular with investors would be an understatement – the new £810,000 loan for Phase 1B was fully subscribed in just 31 minutes! 

In parallel, CapitalStackers introduced Hampshire Trust Bank to provide the £1,456,000 senior debt for Phase 2A, and then invited investors to plug the funding gap of £275, 000. Within a Loan-to-Value range of 67% and 73%, these investors can expect returns of between 10.61% and 13.84%. 

The developer, Patrick Lomax, was equally happy  and effusive in his praise of the CapitalStackers process, saying, “Sylvia and Steve are just brilliant. Dealing with CapitalStackers is a very pleasant experience in what is by far the most difficult area of the construction business. They’re useful, helpful, informative and easy to talk to.” 

He went on to say, “It’s great that small construction firms have access to this kind of funding to get projects off the ground so that the big firms don’t get to dominate everything.” 

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

CapitalStackers investors can look forward to a return of up to 14% from a development of nine luxury flats in an established and popular residential road in Solihull.Front Elevation

The project is the latest scheme by Avalanche Capital – the successful team that some will remember repaid investors early when their spacious Chessets Wood dwellings were built and sold ahead of schedule in December last year, paying annualised returns of between 9.8% and 13.8% after just 7 months.

This latest scheme is to be built on the site of a large, unoccupied dwelling which will be demolished to make way for spacious, well appointed 2 & 3 bedroom apartments ranged over three floors.

The construction finance of £2,025, 000 is being provided by NatWest and the developers are contributing £900,000 of their own funds, leaving a crowdfunding opportunity for CapitalStackers investors to raise £930,000. Investment bids are invited from as little as £5,000.

“Excellent” levels of profit are expected – the site has already seen a substantial rise in value following planning permission, and confidence is further enhanced by the appointment of John Shepherd Estate Agents (who have previously sold Avalanche developments at better than appraised values) as the selling agents.

Deal Infogram - St. Bernards Road by Avalanche CapitaWe have adopted a conservative figure of £5.8m pending formal valuation, which results in a respectable Loan-to-Value ratio of 55%. It’s worth noting the agent anticipates selling for around £6.3m.

Given the above factors, investor demand will be extremely high when bidding opens at noon on Tuesday 10th April – so if this sounds like the right sort of investment for you, please don’t miss out.

So that you’re ready to invest when the auction goes live, if you’re an existing member, you can familiarise yourself with the details of the deal now by clicking here. If you don’t yet have an account, you can sign up here.

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

Building begins this month on a sympathetic development of 2, 3 & 4 bedroom stone houses in the Nidderdale Area of Outstanding Natural Beauty.

Gregory Property Group – who have an excellent track record of successful developments over the last 30 years – have completed the drawdown of £504,000 funding for the first 11 houses, which is the first phase of 22 dwellings in the sought-after, picture-postcard village of Dacre Banks.

The development augments the area by adopting former vacant commercial land – and when completed will have a value of £5.8m. This will furnish annualised returns for CapitalStackers investors of 12.6% to 17.1% over 18 months – at Loan to Value ratios of 65% and 74% respectively – depending on which risk layer they have chosen.

As well as arranging the crowdfunded segment of the loan, CapitalStackers also negotiated the construction facility of £2m with Hampshire Trust Bank, one of its senior debt relationship lenders.

Sylvia Bowden of CapitalStackers said “it’s encouraging to find that we’re attracting new investors with each new deal published. The list of registered members continues to grow, with an average investment size of around £67,000 – although it is possible to invest as little as £5,000 with CapitalStackers. To meet the growing demand for investment, we are trialling a new policy where CapitalStackers invests in developments itself and then releases loans onto our secondary market, to make opportunities available for recently joined members”.

Not only does this exceptional development further adorn one of Yorkshire’s foremost areas of outstanding beauty – it will enrich and diversify the local population. It will attract a mix of young professionals, families and downsizers lured by rural village life, and commuters to Leeds and Harrogate, it also offers further proof of the escalating popularity of loan-based property crowdfunding as a consistent route to double-digit returns.

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

There used to be a game show on TV called It’s a Knockout, where amongst lots of other silly games, contestants – wearing daft costumes that made walking difficult – used to carry buckets of water across a slippery surface whilst being bombarded with water cannons or sandbags, to try and fill a receptacle at the end of the course.

Obviously, they spilt a lot along the way and were occasionally wiped out altogether and had to start again. But there’s no doubt that if they were dogged enough and did it for long enough, eventually they would fill the receptacle.

This often seems to me to be a good analogy for the stock market.

The award-winning financial advice website, “This Is Money” ran an analysis last year confirming much the same. If you’d invested over any ten year period over the last two decades (except two dodgy phases in the dotcom boom and the financial crash), you were 95% likely to turn a profit. And assuming you reinvested your profits, the average return generated would have been 70%!

Sounds like investment Nirvana, doesn’t it?

But let’s examine those figures a little more closely.

And – for now – we’ll set aside those periods of heart-in-mouth panic as you watch your stock slide and gnaw your fingernails away as you decide whether or not to leave your investments where they are. That’s all part of stock investing, seasoned veterans will tell you. Take your lumps like you take your jumps.

If we accept that you’ve ridden the roller-coaster, pushed your ticker back down to its rightful position each time the market bounced it up into your throat, fought against all your instincts to reinvest hard-earned profit back into the maelstrom from whence you’ve just extracted it…what are you left with?

A 70% profit over 10 years! Sounds like a lot if you consider that if you’d started with £100,000, you’d now be sitting on £170,000.

But over 10 years? If we spread that out on an annual basis and apply a little simple compounding, it amounts to just 5.45% per year. Is that a fair recompense for all the cardiac distress?

So is there an alternative? Property?  Well, it’s more secure, but again, it ties up your capital for years.

So if you could make an annualised return of three times that amount without all the turmoil and without the long-term capital handcuffs, wouldn’t you consider it? Heck, wouldn’t you even do it for twice that average stock market return?

That’s why smart investors have started looking at loan-based crowdfunding of property. Lending to screened-and-approved developers looking for investment to get their projects off the ground. Usually, they’ll have agreed bank funding for around 60% of the building cost and they’ll have their own equity to sink into it too. But the capital gap in between is increasingly being filled by crowdfunders on the FCA-authorised CapitalStackers platform.

And it can be impressively lucrative. Recent investors in a CapitalStackers funded development in York made annualised returns of up to 22.5% in just eight months.

More typically, investors in two current CapitalStackers deals are set to make annualised returns of between 10% and 17%. Those figures look even more attractive when you know that all CapitalStackers investors are able to choose their own return, predicated on the level of capital risk they’re prepared to take (although the risk itself is not terribly off-putting, given that the investment is secured on the property, the developer’s equity/profit is there to cushion any drop in value – and the Loan-to-Value on these deals is within a sensible range of 55% to 72%).

So how might this kind of investment compare with the stock market?

Well, taking a mid-point CapitalStackers investment as an example: If you were to start with £100,000 – on an agreed return of 13.5% – after one year, your nest egg would be worth £113,500.

After two years, you’d have £128,822.

Impressively, you’d have overtaken your stock market earnings in just over four years, and after ten years you’d be sitting pretty on £354,780. Which makes those nerve-wracked stock market investors with their £170,000 look like dabbling amateurs.

As with shares, you don’t need a huge amount to get started. The minimum investment in a CapitalStackers scheme is just £5,000 – but many invest a lot more.

And considering you can access your capital by selling your investment on the secondary market, it’s no wonder more and more of the smart money is moving to loan-based property crowdfunding.

Find out more at www.capitalstackers.com or
by calling 
Steve Robson on 07774 718947
or Sylvia Bowden on 07464 806477
or Tony Goldrick on 07788 373126.

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

CapitalStackers has completed the drawdown of £1.36 million funding for a prestigious development of eight homes, in the pretty Cheshire village of Malpas. Work is expected to start on site later this month and two properties are already under offer at the asking price.

The P2P property lending specialist also successfully negotiated £1.58 million of senior funding from a major high street bank, on behalf of the developer Orchard House. The gross development value of the scheme is £5.1 million.

CapitalStackers’ investors now look forward to returns of between 10.7% and 15.6% per annum over the next 22 months with lending at Loan to Value ratios from 55% to 73%.

Steve Robson of CapitalStackers comments, “Investors were invited, at the back end of last year, to lend into three layers and choose their own level of risk and return. Many are repeat investors, some of whom benefited from returns of up to 22.5% last year on an office to residential conversion we financed in York, however some are new investors, keen to dip their toe into the P2P property lending market.

“They are attracted not only by the high level of returns available, but the transparency and ease of the deals. We now have 150 investors on the books and rising, plus an exciting development pipeline. There are opportunities still available in the Malpas deal through our secondary market.”

Patrick Lomax, Founder and Director of Orchard House comments, “I have been impressed with CapitalStackers detailed knowledge of the property industry and finance market. We dealt with an experienced and senior team who absolutely delivered to the brief and exceeded our expectations. They have access to a wide pool of potential investors and delivered within relatively tight timeframes. We spoke to a number of debt advisors but none came close to the same level of service and professionalism.”

The Orchard House development is only a short walk from the 18th century market town of Malpas, Cheshire – a friendly village community within commuting distance of Chester and Wrexham and close to the Ofsted outstanding Bishop Heber High School.

A number of listed buildings dotted around the immediate area (including the Grade 1 Church of Saint Oswald), lend the site a rare traditional charm. And since the developer has in-house design capability, each of the homes can be partially bespoke to the purchaser’s requirements, which has sparked early interest from buyers with plots already being reserved off-plan.

CapitalStackers investment opportunities appeal to a broad spectrum of investors, from conservatively positioned pension funds to those with a higher risk-and-reward appetite. The minimum investment is £5,000.

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

The Oakapple Group – a Leeds development company – has begun converting the former 4 star Balmoral Hotel in Harrogate into 14 luxury apartments, with the help of funding raised by P2P lending platform CapitalStackers.

The 1image-living-space2,500 sq ft landmark Victorian building on Franklin Mount is being sensitively converted into one and two bedroom elegant apartments ranging from 600 to 1300 sq ft. Completion is scheduled for September 2017 and residents will enjoy on-site parking and original architectural features. The property was built around 1890 as three Victorian villas, converted into a guest house in 1981 and became the Balmoral Hotel in 1984. Oakapple received planning consent in June 2016.

For the developer, the funding solution allowed more effective use of equity. CapitalStackers introduced the senior debt from Hampshire Trust Bank of circa £2.3m and raised the additional £515,000 required within a week of posting the deal. The developer anticipates selling for in excess of £4m.

image-bathroomSteve Robson of CapitalStackers comments, “We are delighted to be playing a significant role in the sensitive conversion of such an imposing and historical building within the centre of Harrogate. Investors will look forward to receiving returns pegged at between 11% to 15.5% per annum within the next 14 months”.

CapitalStackers matches investors direct with developers seeking finance on specific projects. The company aims to plug the funding gap between typical bank debt and the developer’s equity. Investors typically receive double digit returns up to 20%.

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CapitalStackers is authorised and regulated by the FCA. Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other peer to peer lending platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.