5 or 6 bed HMO
Dodgeons Close, Poulton-Le-Fylde FY6 7DX
Project
Background
& Deal Structure
A 3-bedroom semi-detached property with attached garage ideally suited for conversion into a 5 or 6 bedroom house of multiple occupancy (HMO) and leased to a Registered Provider on a long-term commercial lease.
The Registered Provider (RP) Serco have expressed interest in this property, and it has passed their postcode checks.
The RP have offered a 10 year lease on this unit, following renovation and having onboarded the property.
Deal requires cash or bridge for the front-end purchase due to the scope of works.
Location
Images
Floorplans
Video Walkthroughs
Project
Scope of Works
Light scope of works with internal reconfiguration, including…
Financials
Acquisition Costs
| Purchase Price Sale agreed | £177,500 |
| Renovation Refurbishment & Conversion Costs | £27,500 |
| Architect Budget for plans drafting plans and submission to local authority | £650 |
| Furniture Furnishing to provider’s requirements | £3,500 |
| SDLT Stamp Duty Land Tax | £5,325 UK £8,875 INT |
| Survey RICS Level 2 report | £500 |
| Legals Conveyancing & transaction fees & disbursements | £2,500 |
| Sourcing Sourcing Fee | £6,250 |
| Capital In Total acquisition costs | £223,725 |
Optional Extras
| Project Management Coordinating contract teams | £2,750 |
| Lease Setup Lease negotiations & contract admin with Registered Provider | £800 |
Post-Works Refinance
| Gross Development Value Bricks & mortar valuation | £215,000 |
| Uplift Between GDV and original purchase price | £37,500 |
| 1st Charge Lending @75.00% of GDV – recycling funds onto next opportunity | £161,250 |
| Capital Left In Capital remaining in equity post-refinance using mortgage lending | £62,475 |
Registered Provider 10 Year Lease
| Gross Rent p.a. Negotiated rate for area | £20,995 |
| Mortgage p.a. @6.00% lending @75%LTV | £9,675 |
| Operational Expenses p.a. @0.00% | £0 |
| Management p.a. 0.00% | £0 |
| Net Cash Flow p.a. Pre-tax income | £11,320 |
Capital Growth
Capital Gain
| Capital Value @ Year 10 Year 10 value assumed conservative 3.5% annual growth | £303,279 |
| Mortgage Lending 1st Charge lending redemption | £161,250 |
| Equity Investment Capital Capital returned to equity investor | £62,475 |
| Capital Gain @ Year 10 Cap.value less 1st charge lending & equity investor’s capital | £79,554 |
Investor Returns
Income & Return
| Net Cash Flow PA Annual net income after costs | £11,320 |
| Total Net Lifetime Cash Flow Net income over life of lease term | £113,200 |
| Total Lifetime Return on Capital Gain + Total Income (calculated @Year 10) | £192,754 |
Comparables
Availability
Secure Your Next Deal Today…
This deal is available under our standard terms with a 25% downpayment of the Sourcing Fee paid to secure the opportunity, deductible from the final balance due at Exchange of contracts.
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