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The Deal
Purchase standard 3 bed residential property for £425,000 and convert to a bed HMO by re-configuring the layout and refurbishing at a cost of £50,000.
Funding the Project
• Shawbrook STL1 - 75 LTV £318,750 with Additional Lending for Refurb Costs £42,500 (85% LTV and 69% Loan to Gross Development Value (LTGDV)
• Total single day one loan £361,250 - 0.6% pcm rate and 1.95% fee added to the loan (1.7% existing customers)
• Surveyor reports back on current value, after works value and market rent based on the proposed schedule of works.
Working out Investor Cash Required
£24,000 SDLT, £106,250 Deposit, £7,500 Outstanding Refurb costs. Total cash required £137,750.
The Exit
6 Room HMO created generating £51,600 of rental income (10% Yield) and valued at £525,000.
Converted to HMO mortgage at 75% LTV for £393,750 repaying the Refurbishment Loan and releasing £32,000 back to the client for the next project.
Shawbrook RIO 2 - £0 arrangement fee, 3.84% above LIBOR and the ability to instruct the same surveyor to confirm the final after works value and market rent.
To discuss Shawbrook Bank, call our Sales Team on 01403 272625 (option 2) and/or visit our website here to find out more.
