3 studio units
Memorial Road, Worsley, Manchester M28 3AG
Project
Background
& Deal Structure
A 2-bedroom terraced property ideally suited for conversion into a 3 bedroom house of multiple occupancy (HMO) setup as studios and leased to a Registered Provider on a long-term commercial lease.
The 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.
Location
Images
Video Walkthrough
Floorplans
Project
Scope of Works
Moderate scope of works with internal reconfiguration, including…
- Site Preparation / Demolition / Rip Out
- Damp & Timber Works
- Skips
- Utility Upgrade Electric
- Utility Upgrade Gas
- Utility Upgrade Water
- Electrics (1st Fix)
- Electrics (2nd Fix)
- Plumbing 1st Fix
- Plumbing 2nd Fix
- Joinery 1st Fix
- Joinery 2nd Fix
- Drainage
- Plastering
- Kitchen Units
- Tiling
- Bathrooms Suites
- Carpets / Flooring
- Fire Alarms / Smoke detectors / Emergency Lighting
- Windows
- Doors internal / external
- Roof Repairs
- internal / external decoration
- Kitchen Appliances (i.e Cookers, Fridges etc..)
- Landscaping
- Professional Fees
- Test Certificates
- Blinds
- Locks, Key Safes, Fire Signage + Others
- Other Items (Kitchenette Installation)
Financials
Acquisition Costs
| Purchase Price Sale agreed | £175,250 |
| Renovation Refurbishment & Conversion Costs | £49,750 |
| Architect Budget for plans drafting plans and submission to local authority | £1,500 |
| Building Control Estimated cost for sign-off from C3 to C4 | £2,000 |
| Furniture Furnishing to provider’s requirements | £5,000 |
| SDLT Stamp Duty Land Tax | £8,250UK £11,550INT |
| Survey RICS Level 2 report | £675 |
| Legals Conveyancing & transaction fees & disbursements | £2,500 |
| Insurance Buildings Insurance | £1,062 |
| Sourcing Sourcing Fee | £8,750 |
| Capital In Total acquisition costs | £254,737 |
Optional Extras
| Project Management Coordinating contract teams @10% of cost of works | £4,975 |
| Lease Setup Lease negotiations & contract admin with Registered Provider | £3,000 |
Post-Works Refinance
| Gross Development Value Bricks & mortar valuation | £213,750 |
| Uplift Between GDV and original purchase price | £38,500 |
| 1st Charge Lending @75.00% of GDV – recycling funds onto next opportunity | £160,313 |
| Capital Left In Capital remaining in equity post-refinance using mortgage lending | £94,425 |
Registered Provider Lease
| Gross Rent p.a. Negotiated rate for area | £30,607 |
| Mortgage p.a. @6.00% lending @75%LTV | £9,619 |
| Operational Expenses p.a. @0.00% | £0 |
| Management p.a. 10.00% | £3,061 |
| Net Cash Flow p.a. Pre-tax income | £17,928 |
Capital Growth
Capital Gain
| Capital Value @ Year 10 Year 10 value assumed conservative 3.5% annual growth | £301,515 |
| Mortgage Lending 1st Charge lending redemption | £160,313 |
| Equity Investment Capital Capital returned to equity investor | £94,425 |
| Capital Gain @ Year 10 Cap.value less 1st charge lending & equity investor’s capital | £46,778 |
Investor Returns
Income & Return
| Net Cash Flow PA Annual net income after costs | £17,928 |
| Total Net Lifetime Cash Flow Net income over life of lease term | £179,276 |
| Total Lifetime Return on Capital Gain + Total Income (calculated @Year 10) | £226,054 |
Comparables
Availability
Secure Your Next Deal Today…
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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