4 bed HMO
Trawden Way, Liverpool
Project
Background
& Deal Structure
A 3 bedroom mid-terraced property requiring modernisation, ideally suited for conversion 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) 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.
Location
Images
Floorplans
Project
Scope of Works
Rip out all carpets, door casings, kitchen, bathroom fittings etc as required.
Form new partition wall to make GF bedroom at the front of the property, insulate, plasterboard, supply and fit skirting to both sides and install new doorway c/w with fire-door.
Form new partition wall in bedrooms 2 & 3 to enlarge bedroom 3 on the 1st floor, insulate, plasterboard, supply and fit skirting to both sides.
Carry out all other associated joinery works throughout the property to make good existing woodwork, skirting boards etc.
Strip walls if required and re-plaster full wall if re-plaster is required. Plaster all newly formed partition walls and around removal of existing walls/structural openings etc. NOTE: WHERE WALLS HAVE TEXTURED COVERINGS AND REQUIRE ANY PLASTER THEN FULL WALL WILL BE STRIPPED TO ACHIEVE SMOOTH FINISH. NO IRREGULAR FINISHES/PATCHES.
Install smoke & heat detection, interlinked smoke detection to all rooms and corridors and 1 heat detector in the kitchen area. Full rewire of electrical sockets, lights and extraction, new consumer unit EICR test and two EML fittings Kitchen and Bathrooms to have Bulk Head lights. All bedrooms to have 1 no USB Socket and minimum 2 double sockets Communal area to have 1 USB Socket and minimum if 3 double sockets in total Kitchen to have isolation switch for washing machine. Bathroom and WC to have extraction fans.
Supply and fit new fully compliant FD30 fire door casings, fully compliant FD30 fire doors, intumescent fire strips, architraves, fire door closer, push plate to communal door, fully compliant door lock suitable to specific fire door, doorstop to all rooms.
Fire-board under stairs and to any supply cupboards etc.
New flooring where required, look to save part of existing floors if possible.
New kitchen units with new worktop and appliances + additional sockets.
Full redecoration of all walls, ceilings and woodwork in white throughout the whole house.
Financials
Acquisition Costs
| Purchase Price Sale agreed | £100,000 |
| Renovation Refurbishment & Conversion Costs | £35,000 |
| Furniture Furnishing to provider’s requirements | £3,000 |
| SDLT Stamp Duty Land Tax | £3,000 UK £5,000 INT |
| Survey RICS Level 2 report | £420 |
| Legals Conveyancing & transaction fees & disbursements | £1,500 |
| Sourcing Sourcing Fee | £4,000 |
| Capital In Total acquisition costs | £146,920 |
Optional Extras
| Project Management @10% of cost of works | £2,800 |
| Lease Setup Lease negotiations & contract admin with Registered Provider | £800 |
Post-Works Refinance
| Gross Development Value Bricks & mortar valuation | £130,000 |
| Uplift Between GDV and original purchase price | £16,920 |
| 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 | £49,420 |
Registered Provider 10 Year Lease
| Gross Rent p.a. Negotiated rate for area | £14,144 |
| 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 | £8,294 |
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 | £49,420 |
| Capital Gain @ Year 10 Cap.value less 1st charge lending & equity investor’s capital | £36,458 |
Investor Returns
Income & Return
| Net Cash Flow PA Annual net income after costs | £8,294 |
| Total Net Lifetime Cash Flow Net income over life of lease term | £82,940 |
| Total Lifetime Return on Capital Gain + Total Income (calculated @Year 10) | £119,398 |
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.
Please fill in your information below if you would like to to discuss this opportunity in more detail…