4 bed HMO
Fieldside Road, Wirral CH42 4QW
Project
Background
& Deal Structure
A terraced property converted into a 4 bedroom house of multiple occupancy (HMO) and leased to a Registered Provider on a long-term commercial lease.
The Registered Provider (RP) previously expressed interest in this property, which has now been converted to their specification.
The RP have offered an initial 10 year lease on this unit, following renovation and onboarded the property in June 2023.
Location
Images
Floorplans
Project
Scope of Works
No works required: conversion completed Spring 2023 and RP tenanted shortly after.
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Financials
Acquisition Costs
| Purchase Price Sale agreed | £150,000 |
| Renovation Refurbishment & Conversion Costs | £0 |
| Architect Budget for plans drafting plans and submission to local authority | £0 |
| Furniture Furnishing to provider’s requirements | £0 |
| SDLT Stamp Duty Land Tax | £4,500 UK £7,500 INT |
| Survey RICS Level 2 report | £500 |
| Legals Conveyancing & transaction fees & disbursements | £1,500 |
| Sourcing Sourcing Fee | £7,000 |
| Capital In Total acquisition costs | £163,500 |
Optional Extras
| Project Management Coordinating contract teams | £0 |
| Lease Setup Lease negotiations & contract admin with Registered Provider | £800 |
Post-Works Refinance
| Gross Development Value Bricks & mortar valuation | £130,000 |
| 1st Charge Lending @75.00% of GDV – recycling funds onto next opportunity | £97,500 |
| Capital Left In Capital remaining in equity post-refinance using mortgage lending | £66,000 |
Registered Provider 10 Year Lease
| Gross Rent p.a. Negotiated rate for area | £14,560 |
| Mortgage p.a. @6.00% lending @75%LTV | £5,850 |
| Operational Expenses p.a. @0.00% | £0 |
| Management p.a. 0.00% | £0 |
| Net Cash Flow p.a. Pre-tax income | £8,710 |
Capital Growth
Capital Gain
| Capital Value @ Year 10 Year 10 value assumed conservative 3.5% annual growth | £183,378 |
| Mortgage Lending 1st Charge lending redemption | £97,500 |
| Equity Investment Capital Capital returned to equity investor | £66,000 |
| Capital Gain @ Year 10 Cap.value less 1st charge lending & equity investor’s capital | £19,878 |
Investor Returns
Income & Return
| Net Cash Flow PA Annual net income after costs | £8,710 |
| Total Net Lifetime Cash Flow Net income over 10 year term | £87,100 |
| Total Lifetime Return on Capital Gain + Total Income (calculated @Year 10) | £106,978 |
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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