4 bed HMO & Commercial Unit
Seabank Road, Wallasey CH45 1HG
Project
Background
& Deal Structure
A 3 storey mixed-use terraced property recently fully renovated into a 3 bed duplex apartment and retaining the ground floor commercial premises.
The commercial unit has been recently let on a fully repaired and insured (FRI) lease to a commercial tenant on a 3 year lease.
The 3 bed apartment lends itself to conversion into a 4 bed HMO for the professional market given the high standard of renovation.
A suitable budget has been included for the adaptations to make the apartment HMO compliant.
Location
Images
3 Bed Duplex Apartment
Ground Floor Commercial Premises
Floorplans
Project
Scope of Works
Minor works, including…
Financials
Acquisition Costs
| Purchase Price Sale agreed | £215,000 |
| Renovation Refurbishment & Conversion Costs Estimate [to be confirmed by quotation] | £7,000 |
| Architect Budget for plans drafting plans and submission to local authority | £0 |
| Furniture Furnishing to provider’s requirements | £4,000 |
| SDLT Stamp Duty Land Tax [non-residential rate] | £1,300 UK £1,300 INT |
| Survey RICS Level 2 report | £500 |
| Legals Conveyancing & transaction fees & disbursements | £2,500 |
| Sourcing Sourcing Fee | £3,000 |
| Capital In Total acquisition costs | £233,300 |
Optional Extras
| Project Management Coordinating contract teams | £1,400 |
Post-Works Refinance
| Gross Development Value Bricks & mortar valuation | £237,000 |
| Uplift Between GDV and original purchase price | £22,000 |
| 1st Charge Lending @70.00% of GDV – recycling funds onto next opportunity | £165,900 |
| Capital Left In Capital remaining in equity post-refinance using mortgage lending | £67,400 |
Combined Rental Income
| HMO Gross Rent p.a. @£100/room/week | £20,800 |
| Commercial Unit Rent p.a FRI lease [no management or operational expenses] | £7,800 |
| less HMO Management p.a. @15.00% | £3,120 |
| less HMO Operational Expenses p.a. @20.00% | £4,160 |
| less Mortgage p.a. @6.00% lending I/O@70%LTV | £9,954 |
| Net Cash Flow p.a. Pre-tax income | £11,366 |
Capital Growth
Capital Gain
| Capital Value @ Year 10 Year 10 value assumed conservative 3.5% annual growth | £334,312 |
| Mortgage Lending 1st Charge lending redemption | £165,900 |
| Equity Investment Capital Capital returned to equity investor | £67,400 |
| Capital Gain @ Year 10 Cap.value less 1st charge lending & equity investor’s capital | £101,012 |
Investor Returns
Income & Return
| Net Cash Flow PA Annual net income after costs | £11,366 |
| Total Net Lifetime Cash Flow Net income over life of lease term | £113,660 |
| Total Lifetime Return on Capital Gain + Total Income (calculated @Year 10) | £214,672 |
Comparables
All-of-market Sold & On Market Listings
Apartments Sold & On Market Listings
Commercial Units Sold & On Market Listings
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.
Please fill in your information below if you would like to to discuss this opportunity in more detail…