Strategy & vision
PHASES AND STRUCTURE This is phase one of a four phase raise where CrowdProperty has agreed a project loan totalling $1,290,000 to develop a site in Glenroy, Melbourne Victoria.
Due to the supply chain issues suffered in areas of the construction industry, CrowdProperty has been working with the developer on refinancing to a new loan for this project as the initial loan term was due on 22 April 2022 and has now been repaid.
The loan terms are to refinance into a new 15-month loan to allow for completion of construction and to tenant the co-living rooms. This would then allow the developer to refinance out, with the intention of holding for the long term. The phase one raise is for $645,000 with interest to be retained up until the expiry of the investment term in July 2023.
This loan was originally structured as a Development Finance Agreement, with the first raise of $630,000 for settlement completed in January 2021.
The target interest return is up to 7% p.a.* (after fees but before tax), which will be distributed to investors at the expiry of the investment term.
LOCATION AND RELEVANT AREA INFORMATION Glenroy was initially developed in the 1950’s and is situated approximately 12 kilometres north west of the Melbourne Central Business District. The area generally includes a mix of brick and weatherboard homes of various configurations. In recent years, the market in Glenroy has firmed, given the proximity the City via Citylink. Glenroy includes an extensive shopping centre on Pascoe Vale Road, city-bound train service and is close to primary and secondary schools. The large Westfield Airport West shopping centre provides more extensive shopping facilities. ● 50m to nearest bus stop ● 500m to Jacana Train Station ● 500m to Pascoe Vale Rd with direct route to the CBD ● 1km to Glenroy Retail Strip ● 1.8km to Broadmeadows Hospital ● 2km to Broadmeadows Central ● 4km to Westfield Airport West ● 8km to Melbourne Tullamarine Airport
SITE DETAILS The current use of the property for residential purposes is permitted and planning permits have been granted by Moreland City Council to build 2 x dwellings of 6 bedrooms each. A secondary consent was obtained in March 2021 with minor changes to accommodate for build-ability and to provide cost savings. The build would incorporate these specifications, then converting into micro-living units. The project cost would be verified by a suitable quantity surveyor engaged by CrowdProperty
LAND DIMENSIONS: ● Frontage: 15.4m as measured ● Depth: 46.0m ● Area: 706.0sqm approx
PROPOSED DEVELOPMENT DETAILS ● 2 x 6 bedroom, self-contained, fully furnished, micro-living units ● 12 rooms total combined ● $3,600 weekly income (estimated) ● Target 7% net rental yield (9% gross rental yield) ● Target 20% project margin ● Gross Realisation Value — $1,875,000 (excl of GST) These will be purpose built, fully furnished rooming houses that will be run by professional rooming house operators/property managers who already manage nine similar properties. Each of the 12 bedrooms are designed to be converted to have their own ensuite and kitchenette plus access to a communal kitchen and lounge area, giving tenants the choice of their own privacy or to socialise with the co-living community when they wish.
Exit strategy
Refinance. Both directors will keep 1 dwelling each. A deed of partition would be in place to allow for each director to hold a dwelling.
The borrower & project team
The site is being developed by Massive Impact Co. Massive Impact Co’s drive is to help provide 10,000 affordable rooms (micro units) across Australia over the next 10 years. Massive Impact Co. (‘Massive’) was formed to provide safe, affordable housing for the community as well as give the everyday investor access to high cash flow investments. Massive Impact Co. is known as Melbourne’s rooming house experts having completed over 100 rooming house projects as well as being licensed operators and owning nine rooming houses of their own. Cheryl Leong | Sahara Madhi | Matthew White Massive Impact Co. was formed to provide safe, affordable housing for the community as well as give the everyday investor access to high cash flow investments. Sahara and Matthew are known as Melbourne’s rooming house experts having completed over 100 rooming house projects. They also own nine rooming houses and are licensed operators. Cheryl is a developer and social entrepreneur that endeavours to combine purpose and profit to deliver projects that make a difference. Together they form a formidable team that is passionate, innovative and driven to deliver results and impact others.