The borrower
The borrowers, a husband and wife, wanted to purchase and refurbish a house of multiple occupation (HMO) property through their company. They were experienced investors with several other properties and had raised the deposit through selling two other flats.
The asset
The asset was a mid-terrace, former single dwelling, arranged as an 11-bedroom HMO. It was set over four floors. The internal condition was poor, and the property required refurbishing to modernise throughout. It would be re-configured to provide a 10-bedroom HMO in line with new HMO standards.
The property was located on a residential road in the South West. It had easy access to nearby pubs, supermarkets and fast food shops and was within walking distance of the local train station.
The works
The works included a general refurbishment, new sewerage connections, new dormer to the roof bedrooms and a new kitchen and bathroom. They were also installing new emergency exit signs, fire alarms and fire doors. This would bring the property into a desirable state for those looking for shared accommodation.
The numbers
– Purchase price: £345,000
– Total loan: £411,940
– Interest rate p.a.: 9.6%
– Term: 12 months
– LTC: 80%
– LTV: 75% net day one
– GDV: £700,000
