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Your capital is at risk and investments are not covered by the Financial Services Compensation Scheme (FSCS).

Buy-to-sell

St Stephens Road, Bradford

12 Month Buy to Sell - Off Market Deal

£24,500 Raised
£236,000 Total
6 Investors
25.7 Projected Growth
20 Below Market Value
 

This extremely spacious double shop/basement, eight bedroomed corner property is being purchased at 20% below market value.  It is totally off-market and offers excellent potential for uplift as an investment property primarily due to renovation, obtaining an HMO licence for 8 persons and thereby increasing the rental income.  

It has gas fired central heating and UPVC double glazing. On the ground floor there is a double shop along with a storage basement.  With separate rear access is the residential accommodation comprising lounge, kitchen and a yard.  Four bedrooms, bathroom and shower room on the 1st floor, and 4 further bedrooms and separate WC on the 2nd floor.  

The residential accommodation has been let as a shared property for many years.  The property will be purchased with vacant possession including the shop and residential part. 

The Project

The property is in need of renovation. including a new kitchen, bathroom/WC, shower room/WC, and separate WC on 2nd floor, new flooring throughout, walls and ceilings to be skimmed and painted throughout, all woodwork to be repainted, new lights where required.  There is an existing fire alarm system and smoke alarms are already fitted.  

Following renovation to a very good standard, the property will be fully furnished and equipped including the lounge, 8 bedrooms, 2 x kitchens and utility room. An application will be made to Bradford City Council for planning permission for an 8 bedroom HMO as well as an HMO licence. Preliminary talks with Bradford Council and a local experienced architect have proved to be positive and it is expected that the permission and licence will be issued provided all the regulations are met.  Eight rooms will be let at an expected rent of £346 per month per room giving an expected gross rental of £33,280 pa and the shop and basement is expected to be let for £7,800 pa.  

Once all the rooms have been let on AST’s, anticipated to be within 12 months, it is proposed that the property will be put on the market for sale as an income-producing HMO and retail unit in the open market.  The RICS valuation has stated an open market value of £330,000 after renovation work and the property is fully let.  Note that rental income up to the sale of the building has not been taken into account and therefore the projected ROI may be more. However potential investors should remember that Capital is at Risk and Returns are not guaranteed. 

The expected term of the project (12 months) starts from the legal completion of the purchase. This will take place approximately one month after the project is fully funded. 

“Why invest in Bradford?

1.      Great yields at an affordable value
2.      Investment in regeneration
3.      A thriving local economy
4.      A young, well-educated, and fast-growing population
5.      Transport development will put Bradford at the heart of the Northern    
         Powerhouse

Our research points to Bradford as providing exceptional property investment potential in 2018. There has already been a tremendous amount of investment in regeneration here, and this is continuing. Property prices are very affordable, and rental yields are attractive. Property prices could rise substantially in the coming years, as the benefits of High-Speed Rail filter through”.

Source:   https://www.gladfish.com/property-investment-education/things-make-bradford-a-great-property-investm...

Purchase Costs Purchase

Purchase price £180,000
Acquisition costs £42,885
Contingency fund £2,000
PTC initial fee (5%) £11,115
Total fundraise £236,000

Acquisition Costs

Renovation/furniture £33,000
Legal incl disbursements/SDLT £2,500
Agent’s intro commission £2,000
Photography/floor plans £200
Valuation fee £500
SPV set-up £150
Insurance (1 year) £285
Accountancy fee £750
Professional/application fees (HMO) £3,500
Total acquisition costs £42,885

Projected Sale Proceeds

Sale price (See below 1) £330,000
Cost of purchase (£236,000)
Agent’s commission (sale) (£5,940)
Company tax (See below 2) (£16,731)
Projected net gain on sale (£71,328)
PTC exit fee (£10,699)
Net profit to shareholders (£60,629)

12 months projected net return on investment (ROI) – 25.7%

(1.) Based on surveyor’s valuation
(2.) Company tax estimated at the current rate of 19%

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