Caminho da Torre Velha, Sesmarias, Albufeira (III)
Secured loan for real estate project in Algarve, Portugal
- Start of investment period30.11.2022
- Start time10.11.2022 07:00
- Asset classResidential
- Investment typeDevelopment
- Investment end date29.11.2023
- Remaining term11 months
- Expected rate of return14% p.a.
- Expected cash yield%
- No of investors160
- Goal€54 700
With this project, the Sponsor aims to raise a total of 500 000 Euros by providing a second-rank mortgage on a property in Caminho da Torre Velha, Sesmarias, Albufeira, a well-known holiday location in the Algarve, Portugal.
The collateral includes a 5 070m2 plot of land with 10 townhouses units, two groups of 5 units each in a gated condominium with a shared garden and two swimming pools. This project was concluded in the past, but due to the subprime crisis's events with the original project Sponsor, it never got the final usage license and couldn't complete the commercialization.
As per the attached appraisal, the estimated market value of the collateral is 4 200 000 Euros.
After successfully raise 135 100 Euros on the first tranche, and 110 200 Euros with the second tranche, we are now campaigning for the third round of funding. The Project Owner wants to raise additional 54 700 Euros. The remaining loan amount will be mobilized through the next funding rounds.
The Sponsor got a bank loan worth 2 000 000 Euros to purchase the property, and now he is looking to raise this additional amount to proceed with renovation work on the property, get the usage license from the City Hall, and then sell the units.
A commercial bank has the first-rank mortgage registered under its name. Crowdestate investors will have the second rank mortgage.
According to the attached appraisal, considering this tranche's value, the ratio of the project's short-term liabilities to the value of the collateral (LTV) is 53%. Therefore, after the subsequent tranches, the maximum LTV for this project is 60%.
The interest rate of the loan is 14% per annum.
The loan period is 12 months, with a Sponsor's option to extend it by 6 months with the obligation to increase the interest rate by 2% for the extended period.
The principal and interest payment will be made as a bullet payment or earlier following the sales of the townhouses.
The source of loan repayment will happen with the sale of real estate townhouse units.