ftop investor pitch
TRANSCRIPT
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!