£1,300,000 End value (RICS Survey)
£925,000 Purchase Price
£8,000 Legal work
£220,000 Investor input (Joint venture Partner & Profit share)
£60,000 Gross rent per annum
We are currently in the process of refinancing each unit on its own merit. We look at choosing lenders who would take 2/3 each as this will help keep the costs down. Once this is refinanced and the bridging lender paid back, we can sit back and hold for the long term.
We are also weighing up serviced accommodation on one of the 1 bedroom flats to increase revenue.
This large block in Brunswick Road, Worthing contains 7 flats, 3×2 bedroom, 3×1 bedroom and 1 studio flat. The idea is to purchase this and while going through legals, get the titles split and create 7 new leases. As this was a large freehold building and valued as one property there was a clear strategy, by just doing legal paperwork we get a huge uplift in value by creating leases.
I then get the lender to value the property based on 7 units rather than one freehold block which allows us to leverage off the OMV £1.3m rather than the purchase price of £925,000, this allows us to put less equity down to purchase the block and then we refinance individually.