6 bed HMO , Longridge, Preston PR3 3WE
Project:
Background & Deal Structure:
A 3 bedroom terraced property ideally suited for conversion into a 6 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.
Vendor requires an upfront 3% reservation fee, deductible from the purchase price and an Exchange of Contracts in 6 weeks.
Area / Location
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.
- Full rip out (including kitchen)
- Remove 2.5m brick wall
- Install 14m of new stud walling to create new rooms
- Create 1 doorway openings in brick
- Add new boiler
- Add new circuits where required and replace consumer unit
- First fix for 2 new radiators in new rooms
- First fix for new shower room
- Plasterboard and skim new studwork
- Install new kitchen
- Install new two shower rooms
- Install 9 new fire doors and required mouldings
- Install 2 new rads
- Paint throughout
- 2nd Fix all new electrical
- Fit carpets and flooring throughout
UK Financials:
Acquisition Costs
| Purchase Price Sale agreed | £160,000 |
| Renovation Refurbishment & Conversion Costs | £55,000 |
| Architect Budget for plans drafting plans and submission to local authority | £700 |
| Building Control Estimated cost for sign-off from C3 to C4 | £700 |
| Furniture Furnishing to provider’s requirements | £5,000 |
| SDLT Stamp Duty Land Tax | £8,500 |
| Survey RICS Level 2 report | £600 |
| Legals Conveyancing & transaction fees & disbursements | £2,500 |
| Insurance Buildings Insurance | £550 |
| Sourcing Sourcing Fee | £9,250 |
| Capital In Total acquisition costs | £242,800 |
Rental Income (Term: 10-Year Lease)
| Rooms | 6 |
| Average Rate/Wk | £0 |
| Gross Rent p.a. Negotiated rate for area | £25,194 |
| Operational Expenses p.a. @0.00% | £0 |
| Mortgage p.a. @6.00% lending @.75%LTV | £8,910 |
| Net Cash Flow p.a. Pre-tax income | £16,284 |
| Rent/m (rm rate reverse calc) | £0 |
| Term (years) | 10 |
Returns
| Equity Invested | £104,300 |
| Net Cash Flow PA Private finance investor partner net income | £16,284 |
| Contract Lifetime Net Cash Flow Private finance investor partner net income over the life of lease term (10 years) | £162,840 |
Rental Income (Term: 10-Year Lease)
Yield
Cash-on-Cash UK
International Financials:
Acquisition Costs
| Purchase Price Sale agreed | £160,000 |
| Renovation Refurbishment & Conversion Costs | £55,000 |
| Architect Budget for plans drafting plans and submission to local authority | £700 |
| Building Control Estimated cost for sign-off from C3 to C4 | £700 |
| Furniture Furnishing to provider’s requirements | £5,000 |
| SDLT Stamp Duty Land Tax | £11,900 |
| Survey RICS Level 2 report | £600 |
| Legals Conveyancing & transaction fees & disbursements | £2,500 |
| Insurance Buildings Insurance | £550 |
| Sourcing Sourcing Fee | £9,250 |
| Capital In Total acquisition costs | £242,800 |
Rental Income (Term: 10-Year Lease)
| Rooms | 6 |
| Average Rate/Wk | £0 |
| Gross Rent p.a. Negotiated rate for area | £25,194 |
| Operational Expenses p.a. @0.00% | £0 |
| Mortgage p.a. @6.00% lending @.75%LTV | £8,910 |
| Net Cash Flow p.a. Pre-tax income | £16,284 |
| Rent/m (rm rate reverse calc) | £0 |
| Term (years) | 10 |
Returns
| Equity Invested | £104,300 |
| Net Cash Flow PA Private finance investor partner net income | £16,284 |
| Contract Lifetime Net Cash Flow Private finance investor partner net income over the life of lease term (10 years) | £162,840 |
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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