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
Images
Video Walkthrough
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 Sourcing Fee | £5,000 |
| Capital In Total acquisition costs excluding finance | £194,731 |
Bridging Costs
| Bridging Gross Loan @70% or Purchase Price | £87,500 |
| Bridge Interest Payment 12 months @0.95%PM | £9,975 |
| Bridge Arrangement Fee @1.25% of Gross Loan | £1,094 |
| Bridge Solicitor Fees Legal costs for bridge setup | £1,200 |
| Bridge Title Insurance Insurance required by bridge lender | £350 |
| Total Bridging Costs Bridge lending costs | £12,619 |
| Bridging Net Loan Gross loan less all costs | £74,881 |
| Private Finance Gap funding capital amount required (Purchase Acquisition Costs minus Bridging Net Loan) | £119,850 |
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 Released Private finance capital released via 1st charge lending | £51,250 |
| Capital Left In Capital remaining in equity post-refinance using mortgage lending | £68,600 |
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 |
| Private Finance p.a @4.25% PA | £2,915 |
| Net Cash Flow p.a. Pre-tax income | £6,222 |
Investor Returns
Income & Return
| Net Cash Flow PA Private finance investor partner net income | £2,915 |
| Total Net Lifetime Cash Flow Private finance investor partner net income over life of lease term (10 years) | £29,155 |