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OVERVIEW – Investors in this opportunity will fund the refurbishment and extension of a detached single dwelling (referred to as the Property going forward). The Property is located in Wimbledon Village, Southwest London, a highly sought-after and desirable residential location.
TERM – The estimated term for this investment is 17-23 months. If the loan is not repaid by the end of the estimated term, returns will accrue on investments for a further 6 months from the end of the estimated term up until the hard stop date (July 2025).
PLAN – The Borrower will use this facility to assist with the funding of the Property’s refurbishment and extension. Full planning permission has been approved for the project. The proposed works consist of a complete modernisation of the house which includes alterations and extensions. The extension will include a rear infill extension and a glazed link between the annexe and alterations for fenestration with associated landscaping. The Property will span 5,727 sq. ft.
LOCATION – The Property is located on the residential road of Clifton Road, which is situated in Wimbledon Village, on the southwest fringe of central London. Both Wimbledon mainline and underground station (district line) provides regular services to London’s West End and the South East. Wimbledon Village provides extensive good quality specialist retail and restaurant facilities.
PROPERTY – The Property is a detached house containing seven bedrooms off-street parking and a full amenities suite including a gym, sauna and cinema room. When the works have been completed the Property will be finished to a high standard with premium materials used throughout.
THE BORROWER – The Borrower is an individual who is a highly experienced real estate executive and is the co-founder and CIO of a large asset manager who manages both private equity real estate and infrastructure assets. This is an individual project for the Borrower who has an exceptional professional team surrounding him. As part of CapitalRise's due diligence process, it has been evidenced that the Borrower has more than sufficient net worth and liquidity to contribute to the project.
YOUR INVESTMENT – CapitalRise investors will benefit from an equitable charge over the Property. The equitable charge sits behind the Borrower’s senior creditor, which is the mortgage provider for the Property. If a forced sale of the property was necessary, CapitalRise could not enforce the sale without full cooperation from the senior creditor. In the event of a forced sale of the Property, CapitalRise investors would recover their investment second. If the Senior Lender did not cooperate with a forced sale, CapitalRise has full recourse to the borrower, who is borrowing in their personal name. An equitable charge does not prevent a sale of the legal title; it only entitles the chargee to be notified of any disposition. For so long as the senior debt remains unpaid, CapitalRise's enforcement rights as the holder of an equitable charge cannot block a sale and therefore it has no ability to control the application of the sale proceeds. However, any properly advised third-party purchaser is unlikely in practice to agree to complete unless they acquire the full legal and beneficial title and will therefore generally insist on the equitable chargee’s debt is fully repaid. If a sale is achieved the value would need to be less than 70% of the anticipated market value before your invested capital and accrued return are at risk. Interest is being fully serviced by the Borrower and returns will accrue quarterly.
EXIT PLAN – The exit strategy for the development is for the Developer to retain the property and refinance with another lender or sell in the open market.
VALUATION – Savills have provided an independent red book market valuation (June 2022) of the completed property of £7.5 million (£1,310psf ). The original valuation was done on behalf of the senior lender and since then CapitalRise has received reliance on the valuation in December 2022.