7 bed HMO
Chatham Street, Derby DE23 8TH
Project
Background
& Deal Structure
A 4 bedroom terraced property requiring modernisation, ideally suited for conversion into a 7 bedroom house of multiple occupancy (HMO), subject to Planning, and leased to professional tenants.
Specification and budget has been allocated for an ultra-high-end finish, taking the property back-to-brick.
Location
Images
Floorplan
Project
Scope of Works
Financials
Acquisition Costs
| Purchase Price On market price | £170,000 |
| Renovation Refurbishment & Conversion Costs | £169,000 |
| Project Management @10% of cost of works | £16,900 |
| Architect Budget for plans drafting plans and submission to local authority | £4,000 |
| Interiors Furnishing & decoration to client’s requirements | £18,000 |
| SDLT Stamp Duty Land Tax | £5,100 UK £8,500 INT |
| Survey RICS Level 2 report | £500 |
| Legals Conveyancing & transaction fees & disbursements | £1,500 |
| Sourcing Sourcing Fee | £7,500 |
| Capital In Total acquisition costs | £392,500 |
Post-Works Refinance
| Gross Development Value Commercial gearing with a 20% deduction and 11x multiplier, specific to the local area | £491,040 |
| Uplift Between GDV and original purchase price | £321,040 |
| 1st Charge Lending @75.00% of GDV – recycling funds onto next opportunity | £368,280 |
| Capital Left In Capital remaining in equity post-refinance using mortgage lending | £25,020 |
Professional HMO Rental
| Gross Rent p.a. 4 ensuites @600pcm 3 studios @750pcm | £55,800 |
| Mortgage p.a. @6.00% lending @75%LTV | £22,097 |
| Operational Expenses p.a. @30.00% | £16,740 |
| Management p.a. 15.00% | £8,370 |
| Net Cash Flow p.a. Pre-tax income | £8,593 |
Comparables
Availability
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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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