East Eight, a property development and investment company, has nearly acquired its target of £1.4m in equity, via the property crowdfunding platform Simple Equity after just one week. The investment opportunity will go towards developing a nine-unit scheme in Dalston, E8.
An avenue of sourcing development funds which has become more common in recent years for SMEs due to a lack of finance from traditional sources, the innovative model in this instance offers investors a projected 85% return on investment with a minimum share price of £5,000.
Joint developers East Eight and London Central Developments, run by Nicole Bremner and Avi Dodi, will submit proposals for a site at 101 Dalston Lane, E8, a single-storey boys’ club. Plans will see the boys’ club developed, and nine homes built above. Pre-application discussions are taking place with Hackney, with a view to submitting plans within eight weeks.
The JV partners have already acquired the site for £2.8m. Build costs are around £4.7m with a projected GDV of £8.4m, meaning profit on GDV is projected around 36%.
Bank debt makes up 60% loan to value, with Simple Equity crowdfunding making up the equity shortfall. East Eight’s Bremner said: “Historically, we’ve worked with friends and family with larger amounts to invest. However, I’m being approached by investors with smaller amounts and felt nervous about FCA regulatory issues. Simple Equity provide us with a solution to this problem and additionally allow a wider range of investors to participate in deals generally only available to larger ones.”
With just a week gone, £1.19m in investor funds has been acquired, with a target of £1.4m. Just nine investors have contributed, an average of around £132,000 each.
Bremner said: “I’m really thrilled to be partnered with Simple Equity and for them to be our regulatory platform, and take on all legal aspects for our investors. This is game-changing for us as it means we can focus on developing our properties.”
Click here to visit East Eight and London Central Developments’ Simple Equity crowdfunding page.
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