OPPORTU

NITIES TO

INVEST

P R O V I DI N

G HI G

H E R RE T U R N S O

N YO U R C

A S H

OPPORTUNITIES TO INVEST• Some examples of property types• Houses of multiple occupancy• Residential buy-to-let

• Some options for investment• Long term• Short term• Minimum risk, fixed return• Shared risk, shared returns

HMO’S

H O U S E OF M

U LT I PL E O

C C U P A N C Y

BACKGROUND• An HMO is a house where individual rooms are rented out and areas such as

kitchens etc are shared, may have communal or en-suite bathrooms

• HMO’s are (re)financed with commercial loans

• Commercial loan valuations for HMO’s are based on multiples of 6 – 8 times gross rental income

• Example Property A acquisition proposal• Less than five minute walk to Birkenhead Central station• Currently with 6 tenants – two further rooms permanently vacant to avoid licensing• Possible to upgrade to an 8 bed HMO as well as a general uplift in standards and rent• Currently generates 22k gross p.a.

• Example Property B acquisition proposal• High end, established HMO, very close to St Catherines Health Centre• Generates 30k gross p.a.

PROPERTY A• Agreed offer of 120k• Proposed work to enhance

the accommodation and increase capacity and rents

• Target rent gross p.a. 31.5k ( Achieved with 325 pcm per room)

• Target valuation 220k• Target loan at refi 165k

• Outcome is no cash left in and 15k+ p.a. net cash generation ongoing

PROPERTY B• Agreed offer of 200k• Simple acquisition for cash

flow• Generates 31k gross p.a.• Commercial valuation

expected 210k+• Refi loan 157.5k

OVERALL 12 MONTH PICTUREInitial loans Refinance

Property A 120000 165000

Property B 200000 157500Total 320000 322500

Gross rental income

Costs e.g. utilities, interest, council tax

Net rental income

Property A (Assumes 8 rooms rather than 6)

31500 13500 18000

Property B 30000 14000 16000Total 58800 27500 34000

37 HAMPDEN ROAD• Acquired November 28, 2016 for

85k• Conversion ongoing from 3 bed

semi to six bed HMO – 64k budget. 12 week programme

• Target rent = 28k p.a.• 7 x 28k = Revaluation of 196k• Refi @75% LTV = 147k• Refi & Rent = 165k in 12 months

having invested 150k….. • 10% ROI in year one with an

ongoing net income of around 14k.p.a. With ZERO cash invested going forward

10 ROCKVILLE STREET• New 6 Bed HMO acquired for

cash 8/12/16 @ 85k – ready to rent!

• Target valuation when tenanted as follows:• 325pcm x 6 = 1950 pcm / 23.4k

p.a.• 23.4k x 7 = Valuation of 164k• 164k loan at 75% = 123k• PAYS US around 20k at refi and

generates net cash of around 10k p.a.

BUY-TO-LE

T

P U R C H A S E , RE F U R B I S

H , RE N T , R

E F I NA N C E

PROPERTY C• Accepted offer of 30k• 2 bed end terrace• Market valuation of

property in good order 55k• Refurb budget of 5k

turnaround 3 weeks• 34k to acquire incl fees

etc, + refurb – total budget 40k

• Sell on as tenanted property at 55k with an ROI of 10%+ for the new landlord with a monthly rent of 475 pcm

11 TUDOR ROAD• Acquired cash July 2015

for 41k• 15k refurbishment• Revalued at 72k• Refinanced with 60k

loan• Rented at 550pcm• All cash out with a

steady net income of around 3k p.a.

• Equity in the property

INVESTMENT O

PTIONS

T E R M S AN D R

I SK P

R O F I LE

LONG TERM INVESTMENT• Simple cash invested over fixed period e.g. 12 months

minimum, more likely 3 – 5 years• Fixed annual return at agreed rate e.g. 5%• Finance secured with a legal charge over the property (May

be first or second charge depending on investment)• Specific property identified and agreed with the investor in

advance• FTOP Properties Ltd takes full control and risk• Valuation• Refurbishment• Rental

SHORT TERM INVESTMENT• Perhaps to test the water?• Agreed target property such as Property C and full finance

package from investor e.g. 40k• FTOP Property Limited does all the work• Fixed return on investment• E.g. 5% is paid regardless of time elapsed

• Investor fully paid out within 12 months

• Minimum risk

• Fixed return• Charge on property• Long term

investment e.g. deposit element for large purchase

• Shared risk• Joint venture style• Investor funded,

FTOP Managed• Returns split

equally at defined point e.g. sale or refinance etc.

RISK PROFILES

SOME EXAMPLES OF TODAYS OPPORTUNITIES• 120k purchase of HMO – full funding or deposit = 30k – 120k• 200k purchase of HMO – full funding or deposit = 50k – 200k• 30k outright purchase 2 bed terraced - Possible JV or short

term investment• 95k purchase of 3 bed terraced - full funding or deposit =

25k – 95k• Many more out there! Just ask!

Planning to have a prosperous New Year?

So are we! Call us on 0151 305 0194

to make sure of yours!