5 bed HMO

Capesthorne Road, Warrington

Project

Background
& Deal Structure

A large 3 bedroom property requiring modernisation, ideally suited for conversion into a 5 bedroom house of multiple occupancy (HMO) and leased to a Registered Provider on a long-term commercial lease.

We have an established relationship with a Registered Provider (RP) who expressed interest in this property, after passing all their criteria checks.

The RP offered a 10 year lease on this unit, following renovation and having onboarded the property.

Location

Area

Located close to the centre of town, with an abundance of local amenities and facilities, a short distance to the train station and motorway networks providing access to Liverpool, Manchester and London, Warrington is well located.

The property is perfectly positioned for access into the town, is in close proximity to many local, national and global employers, and benefits from a variety of local recreation spots including local golf courses, parks and forests.

Images

Video Walkthrough

Capesthorne Road, Warrington

Floorplans

Financials

Acquisition Costs

Purchase Price
Sale agreed		£125,000
Renovation
Refurbishment & Conversion Costs		£50,510
Project Management
@10% of cost of works		£5,051
Furniture
Furnishing to provider’s requirements		£3,500
SDLT
Stamp Duty Land Tax		£3,750
Survey
RICS Level 2 report		£420
Legals
Conveyancing & transaction fees & disbursements		£1,500
Sourcing
(5k contributed as sweat equity)		£0
Capital In
Total acquisition costs		£189,731

Post-Works Refinance

Gross Development Value
Bricks & mortar valuation		£185,000
Uplift
Between GDV and original purchase price		£60,000
1st Charge Lending
@75.00% of GDV – recycling funds onto next opportunity		£138,750
Capital Left In
Capital remaining in equity post-refinance using mortgage lending		£50,981

Registered Provider 10 Year Lease

Gross Rent p.a.
Negotiated rate for area		£17,550
Mortgage p.a.
@6.00% lending @75%LTV		£8,325
Operational Expenses p.a.
@0.00%		£0
Management p.a.
0.50%		£88
Net Cash Flow p.a.
Pre-tax income		£9,137

Capital Growth

Disposal

Capital Value @ Disposal
Year 10 value assumed conservative 3.5% annual growth		£260,961
Mortgage Lending
1st Charge lending redemption		£138,750
Equity Investment Capital
Capital returned to equity investor		£50,981
Capital Gain @ Disposal
Cap.value less 1st charge lending & equity investor’s capital		£71,230

Investor Returns

Income & Return

Net Cash Flow PA per party
Equity partner net income		£4,569
Total Net Lifetime Cash Flow
Equity partner net income over life of lease term		£45,686
Split on Capital Gain
Equity partner’s share on capital gain		£35,615
Total Lifetime Return on Capital
Gain + Total Income		£81,301

8.96%

Annualised ROI % per party

159.47%

Lifetime Return %

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