Financial Information
Investment of Funds and Projected Return in First Fully
Invested Year
| |
|
Medium Term Investment /£
|
Long Term Investment /£
|
Total /£
|
| |
|
75%
|
25%
|
|
Raised Capital
|
(50 Investors invest £30,000 each)
|
|
1,125,000
|
375,000
|
1,500,000
|
Issue Costs
|
|
30,000
|
10,000
|
40,000
|
| |
|
1,095,000
|
365,000
|
1,460,000
|
| |
Borrow (short term)
|
(as percentage of property price)
|
70%
|
|
851,667
|
851,667
|
Borrow (medium term)
|
(as percentage of property price)
|
60%
|
1,642,500
|
|
1,642,500
|
Available to invest
|
|
2,737,500
|
1,216,667
|
3, 954,167
|
Medium Term Investment
|
Central London Properties
|
Number to be purchased
|
7
|
|
|
|
Typical price per property
|
£240,000
|
1,680,000
|
|
|
Outer London Properties
|
Number to be purchased
|
8
|
|
|
|
Typical price per property
|
£110,000
|
880,000
|
|
|
| |
|
2,560,000
|
|
|
Purchasing costs, furnishings etc.
|
|
|
|
|
7 Central London properties @
|
£15,642
|
109,494
|
|
|
8 Outer London properties @
|
£8,501
|
68,006
|
|
|
| |
|
177,500
|
|
|
| |
|
2,737,500
|
|
|
Gross rental income (incl. 2 wks void)
|
7.25%
|
178,454
|
|
|
Less property running costs
|
34%
|
60,674
|
|
|
Net Rental Return before interest as a percentage
of the purchase price
|
34%
|
117,780
|
|
|
| |
|
4.6%
|
|
|
Less interest
|
5.5%
|
91,159
|
|
|
Net Running Return/Surplus
|
|
26,621
|
|
|
Plus unrealised capital growth in properties of, say
|
6%
|
153,600
|
|
|
| |
|
180,221
|
|
|
Short Term Projects
|
Number of projects per annum
|
2
|
|
|
|
Typical selling price
|
£775,000
|
|
1,550,00
|
|
Less typical purchase price
|
£510,000
|
|
1,020,000
|
|
Less refurbishment, interest and other costs
|
£140,000
|
|
280,000
|
|
Profit
|
£125,000
|
|
£250,000
|
|
Less Project Management fee @15%
|
|
|
37,500
|
|
| |
|
180,221
|
212,500
|
392,721
|
Less fixed administration expenses
|
|
10,784
|
12,716
|
23,500
|
Unrealised Profits before taxation
|
|
169,437
|
199,784
|
369,221
|
| |
|
|
|
|
Taxation
|
Less provision for corporation tax (including on unrealised
gains)
|
25%
|
42,359
|
49,946
|
92,305
|
| |
|
127,078
|
149,838
|
276,916
|
| |
|
|
|
|
Less 5% interest to shareholders
|
|
|
|
75,000
|
| |
|
|
|
201,916
|
Profit share attributable to founders
|
30%
|
|
|
60,575
|
| |
Profit share attributable to shareholders
|
70%
|
|
|
141,341
|
| |
Total return attributable to shareholders (including
interest)
|
|
|
|
216,341
|
| |
Returns per £30,000 invested
|
5% interest
|
|
|
|
1,500
|
Share of profit for year
|
|
|
|
2,827
|
Total return per investor per year
|
|
|
|
4,327
|
As a return on capital invested
|
|
|
|
14.4%
|
| |
Illustration of Possible 5 years'
return per £30,000 invested based on the above
(no forecast or projection is intended)
|
Interest at 5% p.a. for 5 years
|
|
|
|
7,500
|
Share of 5 years' profit (re-invested)
|
|
|
|
17,382
|
Total return per investor after 5 years
|
|
|
|
25,882
|
As a return on capital invested
|
|
|
|
82.9%
|
The mortgage rate quoted is a 2 year fixed rate available
from The Companies' mortgage advisers.
NB. These figures exclude set-up costs and repayments of
capital. It should always be remembered that the value of
investment property and rent levels can go down as well as
up, whilst interest rates can go up.
|
