Gwendoline Street – Decision to invest
This property came from PSW, and receiving their email with the summary document started the process of deciding if it was a good investment, what the strategy would be, if the suggested strategy paid off or not etc.
The basics:
Purchase: £45,000
Other costs: £5,000
Refurb: £15,000
Total Spend: £65,000
Walk score: 77 Very Walkable
Port Talbot is a new area for us, so a full area analysis was completed to determine if the area is a suitable with appropriate demand to match projected outcome.
To keep the blog tidy, we have separated that off to another post here: Port Talbot Area Analysis.
Some more indepth details below.
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Below here is some more info for people we know and trust, check out how to read it here.
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Return Options
| Buy to Let | Flip | HMO – option |
| Rent: £550 pcm / £6,600 pa GDV: £82,000 Capital Back from Refin: £59,500 Cap left behind if BTL: £2,500 Gross Yield: 9.72% |
EFMV: £82,000 Sales Costs: £2,140 Return: £12,273 Yield: 18.08% |
Refurb additional: £15,000 Rent: £16,800 pa GDV: £95,000 Refinance: £66,500 Left in: £18,900 Com Val: £168,000 Com Refin: £117,600 Gross Yield: 19.6% |
Below here is the outcome of the decision for actual investor partners in this project.
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Based on the above there is a good return on all options. Our preference is to go for the HMO option provided the requirements of the local council are not too onerous, as it will be the highest yielding, with highest % of capital returned on commercial loan terms.
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Jun & Craig Lambie
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