Investors hungry for more double- digit returns pounced on the latest opportunity from CapitalStackers – a block of 23 flats near Leeds City Centre.

CapitalStackers investors typically enjoy returns of between 10% and 15%, usually over periods of 12-24 months. The conservative Loan-to-Value (LTV) ratios, high level of due diligence and zero losses have attracted a wide range of investors, some putting in as little as £5000, many considerably more.

The Leeds development – called Abode – is a four-storey block of 15 two-bedroom flats and eight one-bedroom flats, bringing a return of 13.76% on an LTV of 68.4%. Prices range from £80K to £130K and interest has been sparkling, with six of the flats already under offer well before completion. In addition to first-time-buying single professionals and urban downsizers, the flats are also proving enticing to Buy to Let landlords with good demand and individual flat rentals ranging from £550 to £700 per month.

This is the second deal launched for the experienced developers, Demech Properties, by CapitalStackers. They’re also on site with 22 houses at Thorne due for completion in Autumn 2019 with 17 houses either exchanged, in legals or reserved.

Abode was already under construction when they approached the investment platform, looking for additional funding to meet additional costs and improve cash flow to enable more cost-effective employment of bricklayers.

Marc Black, a director of Demech said, “This kind of deal can be tough for developers to find funding for, as few investment establishments will deal with part-built schemes. However, since we already have a strong relationship with the team at CapitalStackers, they used their considerable property experience to assess the risks and we were happy to meet their ancillary demands.”

CapitalStackers considered the construction risk to be greatly reduced since the building is already up to the 3rd floor and all externals are complete.

The developer expects the project to be fully sold out by March 2020.

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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.

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 – the P2P property development lending platform – has raised a £2.25m loan to fund the purchase and development of a 24-unit residential block in York.

The entire funding was completed in just 14 days from engagement to the full loan being raised, and the development by Norstar Limited is projected to have a Gross Development Value of £3.2m.  Investor returns are pegged at between 8.5% and 23% p.a.

Steve Robson of CapitalStackers commented:

“This is a huge milestone in our development and singles us out from the competition as being able to perform swiftly and professionally when circumstances dictate.  Working closely with our investors and professional advisers to deliver the whole package within an incredibly tight timescale is a fantastic achievement.”

CapitalStackers allows a wide range of investors to get involved with large commercial building projects, from housing to offices– schemes that would otherwise be out of their reach except through REITs or unit trusts. The idea is to plug the funding gap between typical bank debt and the developer’s equity. CapitalStackers invites P2P investors to take a stake at a risk and reward level they choose, with typical returns of between 5% and 20% p.a. on completion of the project, around 12-24 months later. With the minimum investment being just £5,000 fully secured on the property being funded and on the back of high quality due diligence, this is proving to be a very popular investment vehicle.

This is the latest in a string of new projects funded by CapitalStackers, who are currently inviting investment in an exciting new residential development in Birmingham. The loan sought is £1.9m and returns will be between 7.7% and 17.2% p.a. over a 15 month term.

The development address is: Foss Place, Foss Islands Road, York, YO31 7UJ.

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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.

Hundreds of UK property developers with attractive products are crying out for investors to plug the gap left by the banking crisis.

Big deal, you say. But possibly too big.

The hefty sums needed to fund a new factory or office block are simply out of the reach of most investors unless you go through REITs or collectives. But then you lose control and the thrill of involvement.

So for most of us, the grim reality of investing in property is slogging away at small residential stuff, shops and industrial units – with the attendant headaches of borrowing from banks, PGs and management headaches – not to mention the equity risk.

But a new service launches this week that might give you a considerable leg up into the headier heights of property Nirvana.

It’s the brainchild of two experienced former North-West bank managers who specialised for decades in the property industry. It’s called CapitalStackers, and it’s a brilliant solution to the small investor’s dilemma.

Very often, banks will lend 55-65% towards the cost of a viable project, but no more. The developer will obviously have some equity of his own, so it just needs someone to plug the gap between the two.

Obviously, that in itself is too big a leap for most investors. But here’s the clever bit.

Simply put, CapitalStackers “stacks” private funding on top of bank lending in order to reach the level required to finance a property scheme – in other words, it actually works with active banks rather than pushing them out.

Investors can then choose where in the “stack” of finance they’d like to invest – picking their own level of risk and return, which management team they prefer, which projects they’d like to get involved with – and they can even spread their risk at different levels within the same project.

It typically brings in returns of between 5% and 20% – and one of its most attractive features is that the investment is secured against the underlying property assets being financed.

It’s certain to be of interest to people looking to invest through their pension funds at a sensible risk/reward ratio. In addition to the bank’s due diligence process to get the project off the ground in the first place, the CapitalStackers team perform comprehensive risk analysis and ongoing monitoring of your investment.

Which means investors benefit in the following ways: (a) the lending risk analysis process is doubled up; (b) phased funding of ongoing construction is more suited to a bank than individual investors whose cash goes in first and gets an immediate return; (c) senior debt gearing means you can use your cash to access more or larger deals; and, (d) cheaper senior debt enhances the return on your investment.

So for the investor seeking more attractive risk-weighted rewards, this could be the future of property investing.

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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.

Steve Robson, Managing Director of CapitalStackers presented to a packed audience at the highly successful Great British Private Investor Summit in London yesterday, organised by Angel News. Some 250 high net worth and angel investors were in the audience listening to pitches from a range of crowdfunding and peer to peer lending platforms.

Following the event, Steve said:

“We are delighted with the response from investors to the business model and really encouraged by their level of interest in the platform.  The completion of two deals marks an important step for us and we now look forward to the formal launch to enable us to engage with the wider investment community.”

At a recent pre-launch event hosted by Hallidays LLP, CapitalStackers generated enough interest to complete its first two deals. The CapitalStackers business model seeks to engage with banks and allow investors to choose their preferred risk and return profile.  That, and the fact that all deals are secured by commercial and residential real estate, made the Stockport based firm stand out in this embryonic but fast growing and dynamic sector.

CapitalStackers and its website aim to be the destination of choice for investors looking to finance property investments and development schemes. These will be high net worth individuals or sophisticated investors with a minimum of £5,000 to invest and looking to achieve a better deal than through some of the more traditional investment routes.

It is supported financially and professionally by Hallidays LLP, a firm of accountants with an excellent reputation. This is not the first time these people have come together in the world of property finance and information technology. In 1999 they set up pi-FRAME Ltd, a small and specialised software house which sells real estate lending risk analysis software to banks and property lending boutiques.

At the recent pre-launch event, Steve Robson commented:

“Real estate lending has spent long enough in the doldrums. This initiative and others like it will go a long way to repairing the property finance market. Not only will real estate borrowers benefit from improved liquidity, so also will investors through achieving better returns. We are genuinely excited about the future.”

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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.