Forty-two flats in an historic converted mill are being sold to investors on the residential property crowdfunding platform, Property Partnerin its first ever ‘higher-yielding’ investment opportunity.
Forty-two out of 48 flats, plus the entire freehold, in the Grade ll listed Sandars Maltings building in Gainsborough, Lincolnshire, have been purchased at a discount of 7% - the investment block was valued at £1.95m but purchased for £1.82m. Property Partner will pass the full discount straight onto its investors, providing them with a considerable capital uplift.
The total rent forecasted for all 42 properties is in the region of £190,000 a year. Thirty-five properties are already tenanted and immediately income-generating, while the remaining seven are currently being marketed and are expected to be income-generating within four weeks. We are forecasting a net income of 5.89%*.
The 42 properties will be 40% crowdfunded, which makes a target of £843,100. Property Partner’s previous bulk-buy of four properties in Hastings was funded in just over an hour, and the last property listed on the platform crowdfunded in 16 minutes.
The rest of the money for the block of apartments is mortgaged on an interest-only basis at a 60% loan-to-value (LTV) with a 5-year fixed rate of 4.50%. The fixed rate protects investors against rising rates while the mortgage facility offers the potential for amplified total returns.
The fixed rate mortgage term also ties in with Property Partner’s 5-year exit option, where each investor in the property has an opportunity to sell their holdings at fair market value once five years has elapsed since the property was purchased.
Also, investors have the opportunity to trade their shares on the Property Partner platform. Almost £1.9 million of “resale” shares have already been traded on Property Partner’s rapidly growing “property stock exchange”.
Dan Gandesha, CEO of Property Partner, commented:
“This purchase of a block of 42 flats sums up our future ambitions. Normally, only institutions, private equity houses and hedge funds would stand a chance of investing in a bulk-buy like this and building up a sizeable property portfolio.
“But now anyone can invest in blocks of properties for as little or as much as they like. This is bringing power and choice to smaller investors. And this particular opportunity offers an attractive net yield and immediate capital uplift for investors.”