5 bed HMO
Tag Croft, Preston PR2 7AH
Project
Background
& Deal Structure
A terraced property converted into a 5 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 5 year lease on this unit, following renovation and onboarded the property in February 2023.
Location
Images
Floorplans
Project
Scope of Works
No works required: conversion completed January 2023 and RP tenanted shortly after.
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Financials
Acquisition Costs
| Purchase Price Sale agreed | £195,000 |
| 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 | £5,850 UK £9,750 INT |
| Survey RICS Level 2 report | £500 |
| Legals Conveyancing & transaction fees & disbursements | £1,500 |
| Sourcing Sourcing Fee | £8,500 |
| Capital In Total acquisition costs | £211,350 |
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 | £170,000 |
| 1st Charge Lending @75.00% of GDV – recycling funds onto next opportunity | £127,500 |
| Capital Left In Capital remaining in equity post-refinance using mortgage lending | £83,850 |
Registered Provider 5 Year Lease
| Gross Rent p.a. Negotiated rate for area | £19.760 |
| Mortgage p.a. @6.00% lending @75%LTV | £7,650 |
| Operational Expenses p.a. @0.00% | £0 |
| Management p.a. 0.00% | £0 |
| Net Cash Flow p.a. Pre-tax income | £12,110 |
Capital Growth
Capital Gain
| Capital Value @ Year 10 Year 10 value assumed conservative 3.5% annual growth | £239,802 |
| Mortgage Lending 1st Charge lending redemption | £127,500 |
| Equity Investment Capital Capital returned to equity investor | £83,850 |
| Capital Gain @ Year 10 Cap.value less 1st charge lending & equity investor’s capital | £28,452 |
Investor Returns
Income & Return
| Net Cash Flow PA Annual net income after costs | £12,110 |
| Total Net Lifetime Cash Flow Net income over 10 year term | £121,100 |
| Total Lifetime Return on Capital Gain + Total Income (calculated @Year 10) | £149,552 |
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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