Funding / Real Estate
INVESTING Individual Investor Financial Adviser Institutional Investor FUNDING Entrepreneur Real Estate
Reading time: 1 min

Refurbishing an 11 bed HMO to increase rental yields

10 Jan 2019 By Octopus Real Estate

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

Related articles

PIC invests £200 million in the UK retirement villages joint ventures with Octopus Real Estate
News
12 Jul 2022

PIC invests £200 million in the UK retirement villages joint ventures with Octopus Real Estate

Pension Insurance Corporation plc (‘PIC’), a specialist insurer of defined benefit pension schemes, today announces it is making a £200m equity investment to fund the development and operation of around 10 new retirement communities across the country. The Fund, Senior Living Investment Partners, is a joint venture between PIC and leading specialist real estate lender and investor, Octopus Real Estate
Our new partnership with Homes England, Greener Homes Alliance
News
21 Oct 2021

Our new partnership with Homes England, Greener Homes Alliance

Octopus Real Estate have partnered with Homes England, the Government’s housing delivery agency, to create the Greener Homes Alliance. The new Alliance commits £175 million, providing both loan finance and expert support to SME housebuilders, enabling them to build more high quality, energy efficient homes throughout England.
Ground-breaking Ceremony at Brendoncare St Giles View
News
1 Jul 2021

Ground-breaking Ceremony at Brendoncare St Giles View

Benjamin Davis & Michael Toft from the Octopus team recently attended the ground-breaking ceremony to mark the new care home construction of Bredoncare St Giles View in Winchester. It has been custom designed by our healthcare development team for The Brendoncare Foundation who will lease and operate the new home.
Share