DEAL 3

Location: 33-37 (Odds) Lipscomb Lane. Milton Keynes. MK5 6JQ

Executive Summary

Humphrey Ruvugu and Fred (Tosh) Kirori have long harboured ambitions to venture into property development and investment. After much deliberation, we have finally decided to take the leap and pursue this passion.

In this proposal, we would like to invite like minded investors to join us and embark on this journey to realise good returns and cashflows.

Introduction

Through our network of property professionals, we have been presented with a property with potential to kick start this ambition.

The property is a run-down block of 3 x 1-bed flats strategically located in the sought-after neighbourhood of Shenley in Milton Keynes, right in the middle of a local shopping centre, near a big Sainsbury's supermarket and an outstanding-rated high school!

While the returns for this project may not be as lucrative, our vision is to forge partnerships in property development, aiming for growth into larger projects with clear exit strategies, secured returns, and a robust investment framework.

Property Overview

These purpose built apartments, nestled within a modern development in Shenley Church End, Milton Keynes, offer residents a vibrant community experience with an array of amenities right at their doorstep.

From everyday essentials to health and wellness facilities, residents here enjoy unparalleled convenience within a 1-2 minute walk.

Parking is abundant and free, while easy access to public transportation and nearby attractions make this a very desirable residential area.

Key Amenities and Features:

Retail and services: Sainsbury's supermarket, dental practice, health Medicare center, gymnasium, three restaurants with takeaway options, wellness center, dry cleaners, public house, estate agents, post office, chemist
Free parking without allocation
Regular bus route and bike hire electric charging station
Proximity to a children's park
Nearby attractions: National Badminton Centre, Furzton Lake.

Project Scope

Once acquired, we are looking to fully refurbish the flats to a high standard to achieve the max value possible. This will include:

Installation of new kitchens and bathrooms.
New flooring throughout.
Window replacement where broken.
Upgrading all aspects related to Energy Performance Certificate (EPC) to achieve the highest rating possible.

Project Directors

Humprey Ruvugu

Accountant with over 15 years experience.

Fred (Tosh) Kirori

Structural Engineer with over 20 years experience in domestic refurbishment and extension works.
Property Investment Consultant with extensive training in property investment strategies.

Project JV Partners

David Logongo, Bob Githuku.

Angel Investors:

TBC

Special Purpose Vehicle (SPV)

To ensure efficient management and mitigate risks, we will register a project-specific SPV called Lipscombe Ltd. The Directors will be the 1st and second charge holders. It will streamline operations and limit liabilities associated with the venture to the entity.

Angel financers will lend directly to the SPV for this venture.

Advantages of the SPV structure include:

Enhanced risk management by limiting liabilities to the SPV.
Clear accountability and compliance with regulations.
Efficient allocation of resources and management of finances.
Providing a structured framework for directors and angel investor relationship.

Exit Strategies

Exit strategy 1:

Sale on completion of the refurb after 6 months at the market value estimated to be £420,000 for the entire block.

Exit strategy 2:

Refinance to a mortgage and pay back angel financiers wishing to exit.

Exit strategy 3:

Rent out the flats immediately after completion and pay the angel financiers 8% PA interest until sale of the flats.

FINANCIALS

Purchase price = £300,000
Purchasing costs = £20,000
Refurbishment = £50,000
Total required = £370,000
Min Investment = £10,000
Max required: £50,000
Interest to be paid = 10-12% Per Annum
Min term = 6 Months.

INTEREST PAYMENTS

Interest payments will be as follows:

Loan Monthly 6 months

Amount Interest Interest

£50,000 £500 £3,000

£40,000 £400 £2,400

£30,000 £300 £1,800

£20,000 £200 £1,200

£10,000 £100 £600

Note:

Your interest payments will be rolled up and paid at the end of the term.

Security and Legal Framework

For your peace of mind, your funds will be secured with a charge on the property at the Land Registry. This will be 1st or 2ndor 3rd or 4th charge as per the amounts loaned.
Lending agreements will be prepared by our solicitor. These can be ratified by your independent solicitor should you wish to have one.
Funds will be deposited directly with the conveyancing solicitor for payment of the property on completion of the purchase.
If the purchase is not completed, the monies will be refunded in full.

Conclusion

In summary, the Lipscombe Lane project offers angel investors a good opportunity to participate in property development with minimized risks and streamlined operations. Lipscombe Ltd, acting as the Special Purpose Vehicle (SPV), provides a structured framework for investors to capitalize on their investment.

Despite potentially lower returns compared to other ventures, this project offers the advantage of secured investments and clear exit strategies.

While the returns for this project may not be as lucrative, our vision is to forge partnerships in property development, aiming for growth into larger projects with clear exit strategies.

As we embark on this journey, we invite angel investors to join us in realizing our vision and unlocking the potential of this exciting opportunity. Together, we can set the stage for future growth and success in property development partnerships.