The Company, established in 2011, is a real estate property management company. In 2016 the Company finished its first renovation project of a 4-apartment building in Riga. All 4 apartments are currently rented out to tenants and the Company is receiving stable rental income. In 2022 the Company purchased another building in the same area of Riga. The building was purchased with the Company’s own funds and loans from its owner. Construction works were already started at the end of 2022. The current status of the project is: fully changed communications, almost finished the indoor works until the level of gray decoration, almost finished renovation and insulation of the facade and roof. In total 10% of the above-mentioned works are still to be finished according to the construction acts. After a full renovation, the property will be divided into 8 separate apartments, fully furnished, and will be offered for rent. 

In February 2024, the Company received a loan of EUR 102,300 to cover a part of the final stage works to be done. Altogether, the remaining necessary funds to fully complete the project are still around EUR 150,000. The remaining financing to finish the last part of the construction will be split into 2 tranches. All tranches, including the previously issued one, will share the same collateral, however, as previously stated, the overall LTV will not exceed 70%. 

Therefore, to proceed with the renovation process and continue the interior decoration, the Company is currently seeking  EUR 81,840 financing for 14 months to settle with suppliers. The loan will carry a 10.92% annual interest rate (0.91% monthly) and it will be amortized at the end of term. Principal repayment is planned from loan refinancing in a commercial bank with a long-term loan. The Company already has a preliminary offer from one of the commercial banks, however, the management believes that after fully finishing the reconstruction, the Company can receive a significantly better offer. The future value of the property under development according to the valuation report from January 2023 will be EUR 1.184M. 

The loan will be secured with a first-rank mortgage on a separate apartment in the previously renovated building with a total market value of EUR 362,000 (LTV 51% together with the first tranche). The market value was appraised by Latio in February 2024. In addition, a personal guarantee from the Company’s manager is provided.  The project risk rate is A (90 out of 100).

This is the 6th tranche of financing for the project. Previously EUR 779,307 in total financing was issued for the project, out of which EUR 513,326 was secured with a pledge on the building in the renovation process and another EUR 265,981 loan with a pledge on other properties.

There are a number of factors that make lending to the Company an attractive opportunity and the main highlights are as follows:

• The loan will be secured with a first-rank mortgage on an apartment in the previously renovated building with a total market value of EUR 362,000 (LTV 51% together with the first tranche).
• The Company has previous successful experience in a similar real estate project development.
• The Company has 10 years of experience in the real estate industry.
• The loan has a clear repayment structure from property further refinancing in a commercial bank.