4 bed HMO
Westway, Barrow-in-Furness LA13 0DY
Project
Background
& Deal Structure
A 3-bedroom terraced property 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.
Deal requires cash or bridge for the front-end purchase due to the scope of works.
Location
Images
Floorplans
Project
Scope of Works
Estimated scope of works including…
Financials
Acquisition Costs
| Purchase Price Sale agreed | £90,000 |
| Renovation Refurbishment & Conversion Costs | £25,000 |
| Architect Budget for plans drafting plans and submission to local authority | £650 |
| Building Control Conversion sign-off | £650 |
| Furniture Furnishing to provider’s requirements | £3,000 |
| SDLT Stamp Duty Land Tax | £2,700 UK £4,500 INT |
| Survey RICS Level 2 report | £500 |
| Legals Conveyancing & transaction fees & disbursements | £2,500 |
| Sourcing Sourcing Fee | £7,500 |
| Capital In Total acquisition costs | £132,700 |
Optional Extras
| Project Management Coordinating contract teams | £3,000 |
| Lease Setup Lease negotiations & contract admin with Registered Provider | £800 |
Post-Works Refinance
| Gross Development Value Bricks & mortar valuation | £100,000 |
| Uplift Between GDV and original purchase price | £10,000 |
| 1st Charge Lending @75.00% of GDV – recycling funds onto next opportunity | £75,000 |
| Capital Left In Capital remaining in equity post-refinance using mortgage lending | £57,700 |
Registered Provider 10 Year Lease
| Gross Rent p.a. Negotiated rate for area | £17,680 |
| Mortgage p.a. @6.00% lending @75%LTV | £4,500 |
| Operational Expenses p.a. @0.00% | £0 |
| Management p.a. 0.00% | £0 |
| Net Cash Flow p.a. Pre-tax income | £13,180 |
Capital Growth
Capital Gain
| Capital Value @ Year 10 Year 10 value assumed conservative 3.5% annual growth | £141,060 |
| Mortgage Lending 1st Charge lending redemption | £75,000 |
| Equity Investment Capital Capital returned to equity investor | £57,700 |
| Capital Gain @ Year 10 Cap.value less 1st charge lending & equity investor’s capital | £8,360 |
Investor Returns
Income & Return
| Net Cash Flow PA Annual net income after costs | £13,180 |
| Total Net Lifetime Cash Flow Net income over life of lease term | £131,800 |
| Total Lifetime Return on Capital Gain + Total Income (calculated @Year 10) | £140,160 |
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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