2 bed family-let
Moorland Road, Birkenhead
Project
Background
& Deal Structure
A 2 bedroom mid-terraced property requiring modernisation, ideally suited for leasing 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
Before & During
Floorplans
Scope of Works
- Full rewire inc. smokes
- New bolier
- Kitchen touch-ups
- Towel rail in bathroom required
- Fascia and gutter possible replacement
- Joinery: board up spindles on stairs
- Skylight glazing between bathroom and back bedroom will need to be replaced with toughened glass
- Saw down buddleia plant in yard (and treat)
- Jet spray yard
- Paint rear yard walls
- Decorate throughout
- Carpets required stairs & landing
Financials
Acquisition Costs
| Purchase Price Sale agreed | £65,000 |
| Renovation Refurbishment & Conversion Costs | £15,000 |
| Furniture Furnishing to provider’s requirements | £2,000 |
| SDLT Stamp Duty Land Tax | £1,950 UK £3,250 INT |
| Survey RICS Level 2 report | £420 |
| Legals Conveyancing & transaction fees & disbursements | £1,500 |
| Sourcing Sourcing Fee | £3,000 |
| Capital In Total acquisition costs | £88,870 |
Post-Works Refinance
| Gross Development Value Bricks & mortar valuation | £85,000 |
| Uplift Between GDV and original purchase price | £20,000 |
| 1st Charge Lending @75.00% of GDV – recycling funds onto next opportunity | £63,750 |
| Capital Left In Capital remaining in equity post-refinance using mortgage lending | £25,120 |
Registered Provider 10 Year Lease
| Gross Rent p.a. Negotiated rate for area | £6,741 |
| Mortgage p.a. @6.00% lending @75%LTV | £3,825 |
| Operational Expenses p.a. @0.00% | £0 |
| Management p.a. 0.00% | £0 |
| Net Cash Flow p.a. Pre-tax income | £2,916 |
Capital Growth
Capital Gain
| Capital Value @ Year 10 Year 10 value assumed conservative 3.5% annual growth | £119,901 |
| Mortgage Lending 1st Charge lending redemption | £63,750 |
| Equity Investment Capital Capital returned to equity investor | £25,120 |
| Capital Gain @ Year 10 Cap.value less 1st charge lending & equity investor’s capital | £31,031 |
Investor Returns
Income & Return
| Net Cash Flow PA Annual net income after costs | £2,916 |
| Total Net Lifetime Cash Flow Net income over life of lease term | £29,160 |
| Total Lifetime Return on Capital Gain + Total Income (calculated @Year 10) | £60,191 |