Joint Venture Case Study – General Boucher Court, Bishop Auckland

By: James Newland

This was the first JV for BiG. We had acquired the property with an SPV Company owned 100% by BiG. The property was a closed down case home that our partner has now converted to 43 studios and one bed flats aimed at the private investor marker. Our Partner has had experience with similar conversations and contributed £200,000 to purchase.

Loan £1,000,000 Peak Facility
Valuation £2,200,000
Loan to Cost 80%
Interest rate 0.67%
Agreed Profit Share £250,000
Total Expected Return £272,424
Term 11 months (anticipate being repaid after 7 months)
IRR Circa 50%

The partner had 30 sales exchanged on competition of the purchase and now that works are complete and notices served we anticipate that income will be received by the end of February 2015 to repay the debt, interest and profit share. Once repaid the shares in the SPV will revert to our partner under the terms of our Agreement.