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Alicante-Alfaz del Pi / Description
Respuesta Negocios 21 SLU presents a Fixed Rate Loan opportunity with 1st Degree Mortgage Guarantee.
The plot has a total area of approximately 2,350 sqm and the work is approximately 80% completed. This is the end of construction of a development of 10 single-family homes with garden and private swimming pool.
Promoter provides €2,003,000 from its own funds, in addition to a property outside the development, which it has provided as a 1st degree mortgage guarantee, together with the 8 unsold properties in the development.
The development has 2 sold units that cannot be mortgaged and an additional documented reserve. In addition, the project has an additional guarantee of a property owned by the promoter.
The developer is requesting a €3,500,000 fixed rate loan from wecity for the completion of the works, as well as the cancellation of the existing mortgage (approx. €2,250,000). This loan has a 1st degree mortgage guarantee on the plot.
Through wecity you can participate in a fixed rate loan operation with an annual interest rate of 10% for an estimated term of 12 months. The total estimated profit is 10%. The interest payment + the return of the invested capital will be made at maturity (month 12).
With a minimum investment of 500 € and no investment limit, you can participate in this opportunity with an excellent profitability and with the maximum guarantees.
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The current appraisal for mortgage guarantee purposes (ECO Order 805/2003) amounts to 3,748,035.50 €. This represents a Loan to Value (LTV) over the current appraisal of 93.38%.
The appraisal on the assumption of a finished building amounts to € 5,964,080.55. This means a Loan to Value (LTV) on HET appraisal of 58.68 %.
The LTV on the first drawdown is 69.20%.
An external rating of the project has been requested from JLL, which gave it an AA rating.
The project involves the construction of 10 single-family homes (2 already sold, which are not mortgaged), with private garden and swimming pool.
The loan will have as 1st degree mortgage guarantee the 8 dwellings, located in Calle Urania 1, Alfaz del Pi (Alicante), plus an additional guarantee of a property owned by the developer located in Callosa D'en Sarrià (Alfaz del Pi) with CRU: 03030000566708.
The independent appraisal company in charge of identifying the value of the plot is Valmesa, whose corporate name is Valoraciones Mediterráneo S.A. and which is registered as an approved appraisal company by the Bank of Spain under number 4350.
According to the appraisal report made by Valmesa, the current appraisal amounts to 3,748,035.50 €.
The constitution, preservation, management, administration and, if applicable, enforcement of the real estate mortgage rights on behalf of the investors will be carried out by an entity external to wecity.
In this case the designated Collateral Agent is BONDHOLDERS.
Bondholders, is a professional company specialized mainly in providing independent commission agent and escrow services over different asset classes and under numerous international jurisdictions.
In recent years Bondholders has been mandated as agent and arranger in more than 400 transactions representing a total of nearly 200 billion euros in debt.
Its main clients include, among others, financial institutions, institutional clients, asset managers, sovereign government agencies.
Currently one of the leaders in Europe in providing independent fiduciary services.
The promoter must justify the use of the funds in each of the applications.
The use of the funds by the promoter will be monitored by an external company.
· Investment Typology: Fixed Rate Loan.
· Interest Payment: at maturity (month 12)
· Guarantee: First degree mortgage
· Loan Object:
Financing of the cancellation of the mortgage loan and of the expenses destined to the completion of the construction of a single-family housing development located in Alfaz del Pi (Alicante). The registry data of the eight (8) properties that are the object of the opportunity are listed in Annex I.
· Promoter and wecity investors contribution:
· Desarrollos Negocios 21 SLU: €2,003,000 from its own funds, in addition to a property outside the development, which it has provided as a 1st degree mortgage guarantee, together with the 8 unsold properties in the development.
· wecity investors: € 3,500,000
· Typology: New Contruction - Residential
· Annual Fixed Rate: 10%
· Total Estimated Profit: 10%
· LTV current appraisal: 30,47%
· LTV HET: 58,68%
· LTV first funds provision: 69,20%
· Estimated loan term: 12 months
· Minimum investment: € 500
How long has the development been marketed?
Initially, the developer intended to keep the entire development in patrimony to exploit it for vacation rentals. Due to the health situation and therefore the delay in the execution of the work, they finally decided to market it for sale. The sale begins in 2022. Of the 10 homes, 2 are already registered in the name of the future owners. Of the remaining 8, 1 is already reserved.
Of the remaining 7 there is interest from a Dutch investment group and recently from another Lithuanian group.
The interest from foreign investment groups is very high, but if none is closed in the short term, the developer will continue with the individual sale of each of the properties.
individual sale of each property.
If the developer does not obtain the renewal of the bank financing, do the additional guarantees sufficiently cover all the financing, including that of wecity?
At present they do not have bank financing, but a mortgage granted by a debt fund, which does not want to extend the amount of financing even though the developer has invested 2 million euros of its own funds.
What is the penalty in case of default after 12 months?
The penalties in the event of non-payment are an increase in the annual interest rate by 2% and the guarantees of being able to execute both the mortgage guarantee and the irrevocable power of sale.
Why would they want to borrow to pay off another loan (mortgage in this case)?
There is no possibility that they can extend the current loan and due to the rising cost of materials they have experienced they need more funds to be able to finish the work. Therefore, our financing will allow them to finish the work and we will occupy the 1st rank mortgage position. As an additional guarantee, the developer will sign an irrevocable power of sale in favor of the escrow agent.
Why is the nota simple not updated? The one provided is June 2022.
It is an error, we will upload them in the next few minutes updated.
The building permit was granted in 2019 with a UTE, UTE dissolved, an extension has been requested in 2023, what is the reason for such a long period to finish the work?
Due to the pandemic, the execution of the work had to be delayed.
With respect to the amortization, the obligatory compliance is 6 months, what would be the % of penalty in case of early amortization?
In the case of early amortization, the obligatory interest period is 6 months and the penalty will be 5% of the interest pending payment.
What percentage of commission does wecity take?
Wecity's fees are 5.5% of the amount to be financed and are charged directly to the developer, never to the investor
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