HMO in Birmingham with money out in 1.6 years
HMO in Birmingham with money out in 1.6 years
Reserve this investment opportunity for £499
Figures in Brief:
Asking Price: £187,950
Sale Agreed at: £175,000
Estimated Done Up Value: £350,000
1st exit: Cash Flow (HMO): £1474,38
2nd exit: Flip Profit : £54253.00
Property Description:This is currently a four bedroom with two reception rooms in West Birmingham, Smethwick. The property is less than a mile from a new hospital development, 670-bed Midland Metropolitan Hospital and will have 15 operating theatres, emergency and acute services - as well as a glass-fronted winter garden on the fifth floor. Completion is known to be early 2022. The Birmingham City Hospital is less than 2 miles from the property making it desirable for a working professional as it's just far enough to be away from work and close enough to travel at all hours in the day, dependent on shift work patterns.
Current measurements of rooms - Lounge 12' 10''(into bay) x 12' 2''(max) (3.91m x 3.71m) Dining Room 12' 1''(max) x 11' 2'' (3.68m x 3.40m) Breakfast Kitchen 15' 8'' x 9' 4'' (4.77m x 2.84m) Bathroom (2.40m x 2.83m) Bedroom One 16' 9''(max) x 11' 4'' (5.10m x 3.45m) Bedroom Two 13' 4''(max) x 11' 2''(plus storage cupboard) (4.06m x 3.40m) Bedroom Three 16' 9'' x 9' 9''(plus recess) (5.10m x 2.97m) Bedroom Four 16' 9'' x 9' 3''(plus recess) (5.10m x 2.82m)
The architect drawings have already been done and show the proposed plans for the new layout as a 6 bed, 5 ensuite HMO. Bedroom one and two are located on the ground floor replacing the current lounge and dining room, each have their own ensuite. The communal living area is to the back of the property replacing the current kitchen and bathroom. Upstairs on the first floor is bedroom three and four, each have their own ensuite. And on the top floor in the loft extension is bedroom 5 and 6, they share an ensuite with a proposed shower tray of 1000x800mm.
Property Address: Birmingham
Number of Bedrooms (current): 4
Is there potential to add a bedroom?: Yes - Architect plans already been done and show turning this 4 bedroom, 2 reception room into a 6 bedroom 5 ensuite’s for working professionals
Reception Rooms: 2
Property Asking Price: £187950
Agreed Sale Price: £175000
Fair Market Value (DUV): £350000
Comparable 1: 341 Gillott Road, Birmingham, B16 0RP - SOLD £350,000 - 10 August 2018 - Semi-detached 6 bedroom house x2 ensuites - Good condition, bit dated
Comparable 2: 125 Poplar Avenue, Edgbaston, Birmingham, B17 8EH - SOLD £335,000 - 20 June 2018 - Semi-detached 5 bedroom house - 2 bathrooms Good condition
Comparable 3: 16 Willow Avenue, Edgbaston, Birmingham, B17 8HD - SOLD £360,000 - 16 November 2018 - 5 bedroom mid Terraced house - Good condition, bit dated
If no comparables, please state why there are no direct comparables: FOR SALE - 5bedroom mid terrace house - Edgbaston Road, Smethwick, B66 Asking price £345,000
5bedroom mid terrace house - Bearwood Road, Smethwick - Asking price £350,000
Market Status: Sale Secured by Sourcing Agent
Why is the property being sold?: Sale identified by sourcer (open market)
Is the property in a lettable condition: Yes
Is the sale price negotiable?: No
Property Type: House
Freehold or Leasehold: Freehold
Is the property part of portfolio?: No
Exit Strategy 1: Multi-let / HMO
Exit Strategy 2: Cash Purchase Flip (or bridge)
Exit Strategy 3: Capital Growth
If HMO strategy please select: Property is NOT in any article 4 area and does not currently have an HMO licence from local authority. Investor needs to apply.
Potential Target Demographic: Professionals
* Internal Rip out
Install kitchen and appliances
Install internal and fire doors
Install Sanitary wear (ceramic plumbing fixtures (such as sinks, lavatories, or toilet bowls)
Supply of floor, wall and materials
x2 external doors with ironmongery
Labour and materials for electrical contractor
Labour and materials for Decorating
Labour and materials for Windows
Labour and materials for LVT (Luxury vinyl tile)
Labour and materials for Carpets and underlay
Labour and materials for Heating and Plumbing
Labour and materials for New staircase
Supply and Installation of Furniture for all bedrooms
Refurbishment Costs: £97000 - Including Furnishings and Project management from the build team
Flip Figures (Buy, Renovate, Sell)
Purchase Price: £175000.00
Refurb costs: £97000.00
Entry Legal Cost Estimate: £1200
Exit Legal Cost Estimate: £1200
Stamp Duty: £6250
Survey Costs: £1700 - Survey, Architect drawings (already paid for) and HMO Licence to apply for
Broker Fee: £400
SMP Consultation Fee: £4997
Estimated 6 months bills costs: £1500
Estate Agent Selling Fees: £4200
Total Costs for investor: £160297
Re-sale price (DUV): £350000
Estimated Flip Profit: £54253
BTL Figures (Buy To Let)
Purchase Price: £175,000.00
Deposit Required if BTL: £43750
6 months mortgage costs: £2300
BTL rental Income: £3,200 per month - based on £550 x4 (bedroom 1, 2, 3, 4) per month and £500 per room (5 and 6) per month
Lettings Management Charge %: 15% - £480
MOE %: 15% - £480
Cash Flow most likely 3%: 3.5% - £1,474.38
Cash Flow stress test 5%: 5% - £1,146.25
Money Left in the deal: £29000
Years and months to money paid back: 1.6 years
Area Description: The property is walking distance to a range of amenities including Windmills Shopping Centre which includes a Pure Gym, Asda Superstore, Asda Chemist, Boots, Iceland, Matalan and a more shops, also walking distance away is a KFC, Farmfoods, Cape Hill Medical Centre, Pharmacy, not to mention a number of restaurants and cafes. The town centre of Birmingham is less than 2 miles away offering a range of entertainment, amenities and leisure offering affordability for locals and enjoyment on days off for the working professionals.
The Birmingham City Hospital is less than 2 miles from the property and the new developments Midland Metropolitan Hospital is less than a mile away.
A dummy ad on spare room has been done for this property to show what demand there is for the property as a HMO... within the first few hours there were already 3 enquiries, see in the photo attached to this source pack. Please also see in the photos, examples of what people are paying in the area for high quality accommodation with and without ensuites.
Nearest Train Station: 0.8 Smethwick Rolfe Street Train Station
Any key journey times: TRANSPORT - The closest train station is Smethwick Rolfe Street Train Station which is just 0.8 miles or a 15 minute walk, (6 minute nike ride) 6-minute commute to Birmingham New Street.
Bus routes - There is a bus stop in front of the property and the bus route runs directly into the city centre.
Travelling south on the M5 - The M5 Southbound is 4.6 miles away from the property and approximately 5 minutes, if travelling Northbound it is 2 miles away or a 2 minute drive.
Surrounding areas - Wolverhampton is a 30 minutes drive North West of the property, Leicester is just over an hours drive East and Stoke on Trent is just over an hours drive North.
The fine Print
SMP operates in trust with its potential investors. SMP is registered with the Property Ombudsman Group. SMP prides itself on delivering BMV deals with accuracy and confidence. The sourcing fee for this deal is £4997 which is paid on completion of the sale. A £499 deposit is required to secure the deal which is refundable if the investor decides not to proceed to an agreed sale with the vendor, ie after viewing. The deposit is not refundable if the investor pulls out of the purchase after sale agreed.
SMP takes no responsibility if deals “fall through” for matters out of our control. It is always highlighted that property investment carries an element of risk and ultimately a deal may not be successful. There for deal owners are advised to carry out their own due diligence to confirm for themselves the findings SMP present. SMP has no control of the UK property market prices and investments can be lost or profit margins shortened with the fluctuating market