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Combined refurbishment and new build project in Lincolnshire

by | Apr 13, 2022 | Clients, Case Study

Creating 18 units from a pub, cowsheds, and the yard

Rob Bridgewater and Jamie Sandford are the property investors behind API Investments. They have worked with CPC Finance for almost a decade, growing their portfolio from 4 properties to over 40 units. This project is their biggest to date and involves both heavy refurbishment and new build properties.

The investors bought The Old Red Cow pub in the village of Donington, Lincolnshire. The derelict pub included an area of approximately 0.8 acres, which contained a set of former cowsheds. They intended to refurbish the existing buildings, along with building new properties on the available land.

The Red Cow pubThe site was purchased at auction in November 2020 for £240,000 using their own money. At purchase, the site came with planning permission for 18 units on the Grade II listed conservation area. By carrying out a mix of heavy refurbishment and new build work, the investors created 10 units from the derelict building and eight new-build properties.

  • 10 three-bedroom houses
  • 5 two-bedroom houses
  • 2 one-bedroom flats
  • 1 two-bedroom flat

The investors started the refurbishment and development works using their own funds raised through private investment. Works started in February 2021. Before the investors obtained finance, they spent around £800,000 on the project, including the initial purchase.

At the point at which the properties were structurally sound and had roofs, the investors approached CPC Finance to secure a short-term refurbishment loan from Octane Capital. They completed on a £1.2m facility in September 2021 with a contingency of £100,000 and a term of up to 18 months. Including fees and a 0.8% monthly interest rate, the gross loan totaled £1.39m with rolled payments so that they did not have a monthly payment. Instead, repayments were added to the balance every month so that the total amount could be paid back at the end of the term of the loan. Including the purchase and all works, the project will have cost £2,340,000.

The Red Cow site under constructionThe project is due to complete at the end of April 2022 and the investors are currently working on their exit finance from the project. The completed project has been valued at £2,904,000.

They are selling 12 of the properties and retaining six of the properties. They are currently sourcing long-term finance for the six remaining properties. The loan will be a buy-to-let mortgage of around £640,000, representing 75% LTV on the six properties, with an interest rate of 4.34%-4.99% (depending on the lender), with a 3-5 year fixed period over a 20-year term.

The combination of the sale of the 12 properties and the new loan will enable them to get back their initial investment and pay back the initial short-term loan. From this point onwards, the investors will retain six buy-to-let single residences of various sizes, bringing in a total monthly rental of around £4,175.

The Red Cow project