4 bed HMO , Leyland Road, Lostock Hall, Preston PR4 3DD
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.
A Registered Provider (RP) has expressed interest in this property, and it has passed their postcode checks.
The RP have offered a 5 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.
Area / 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 Blackpool, Manchester and beyond, Preston 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.
Scope of Work
Moderate scope of works with internal reconfiguration, including…Moderate scope of works with internal reconfiguration, including…
Garden Tidy-Up
– Clear overgrown plants and debris to enhance outdoor space.
Electrical Works
– Update wiring, sockets, and install additional outlets to meet HMO standards.
New Exit Door Installation
– Install a new rear exit door in compliance with fire safety and accessibility regulations.
Internal Fire Doors
– Fit fire-rated doors as per safety requirements for all bedrooms and communal areas.
Door Casings
– Replace existing door casings to ensure compatibility with fire-rated doors.
Stud Wall Installation (4m)
– Construct a stud wall to convert the lounge into Bedroom 4, and extend Bedroom 3 to meet minimum room size standards.
Rip Out & Knock Off
– Remove wallpaper from the lounge area to prepare for replastering and redecorating.
Plastering
– Plaster all necessary areas for smooth wall finishes, focusing on areas where wallpaper has been removed and new walls have been added.
Painting
– Freshly paint all interior walls and ceilings in modern, neutral colours for a clean, updated look.
Carpet Installation
– Install new carpets in all existing bedrooms and communal hallways to provide a uniform look.
Laminate Flooring in Kitchen/Diner
– Lay down laminate flooring in the kitchen and dining area for durability and easy maintenance.
New Kitchen Installation
– Install new kitchen units, worktops, and fixtures to create a modern and functional space.
Bathroom Update
– Refurbish the bathroom with updated fittings, tiles, and any necessary repairs for improved functionality and aesthetics.
New Furniture
– Furnish the property with appropriate furniture to meet HMO standards, ensuring durable and compliant choices.
New Decoration
– Add finishing touches and modern décor throughout the property to make it more inviting.
Damp Proof Course
– Apply damp proof treatment where necessary, addressing any signs of damp or moisture issues.e of work content here:
Video Walkthrough:
UK Financials:
Acquisition Costs
| Purchase Price Sale agreed | £108,000 |
| Renovation Refurbishment & Conversion Costs | £42,500 |
| Project Management @10% of cost of works | £0 |
| Architect/Planning Technical drawings for approval by HMO officer | £650 |
| Building Control UK | £650 |
| Furniture Furnishing to provider’s requirements | £3,000 |
| SDLT:Resi Stamp Duty Land Tax | £5,500 |
| Survey RICS Level 2 Report | £500 |
| Legals Conveyancing & transaction fees & disbursements | £2,500 |
| Insurance | £400 |
| Sourcing Sourcing Fee | £8,750 |
| Equity Invested Total acquisition costs excluding finance | £172,450 |
Rental Income (Term: 10-Year Lease)
| Rooms | 4 |
| Average Rate/Wk | £0 |
| Gross Rent p.a. Negotiated rate for area | £18,720 |
| Operational Expenses p.a. @0.00% | £0 |
| Mortgage p.a. @6.00% lending @.75%LTV | £5,850 |
| Net Cash Flow p.a. Pre-tax income | £12,870 |
| Rent/m (rm rate reverse calc) | £0 |
| Term (years) | 10 |
Returns
| Equity Invested | £74,950 |
| Net Cash Flow PA Private finance investor partner net income | £12,870 |
| Contract Lifetime Net Cash Flow Private finance investor partner net income over the life of lease term (10 years) | £128,700 |
Rental Income (Term: 10-Year Lease)
Yield
Cash-on-Cash UK
International Financials:
Acquisition Costs
| Purchase Price Sale agreed | £108,000 |
| Renovation Refurbishment & Conversion Costs | £42,500 |
| Project Management @10% of cost of works | £0 |
| Architect/Planning Technical drawings for approval by HMO officer | £650 |
| Building Control International | £650 |
| Furniture Furnishing to provider’s requirements | £3,000 |
| SDLT:Resi Stamp Duty Land Tax | £7,700 |
| Survey RICS Level 2 Report | £500 |
| Legals Conveyancing & transaction fees & disbursements | £2,500 |
| Insurance | £400 |
| Sourcing Sourcing Fee | £8,750 |
| Equity Invested Total acquisition costs excluding finance | £172,450 |
Rental Income (Term: 10-Year Lease)
| Rooms | 4 |
| Average Rate/Wk | £0 |
| Gross Rent p.a. Negotiated rate for area | £18,720 |
| Operational Expenses p.a. @0.00% | £0 |
| Mortgage p.a. @6.00% lending @.75%LTV | £5,850 |
| Net Cash Flow p.a. Pre-tax income | £12,870 |
| Rent/m (rm rate reverse calc) | £0 |
| Term (years) | 10 |
Returns
| Equity Invested | £74,950 |
| Net Cash Flow PA Private finance investor partner net income | £12,870 |
| Contract Lifetime Net Cash Flow Private finance investor partner net income over the life of lease term (10 years) | £128,700 |
Rental Income (Term: 10-Year Lease)
Yield
Cash-on-Cash UK
Comparables
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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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