A
AIbz
New Member
Good Afternoon All,
I would like to share a current BRRR (Buy Refurbish Refinance Rent) deal I am closing in on, please let me know if this stacks up.
3 Bedroom Mid terrace House in Birmingham that requires modernising (no structural work, just new kitchen, bathroom, replaster and decorating. This is a probate sale where the owner has sadly passed away and his three sons selling, Asking Price: £130,000 Negotiated to £117,000 as I am cash buyer and able to proceed quickly and also I think the Brexit uncertainty has reduced the number of buyers recently. Therefore the figures are:
House price: £117,000
Stamp Duty and Legals: £4,500
Renovation Cost: £15,000
Holding cost for 6 months (Utilities, Council tax, water): £1,500
Total Invested: £138,000
Expected Market Value after Renovation: £160,000 (based on 4 properties with: identical layouts, within 1/2 mile radius) I know I will have to convince a RICS valuator.
Post Renovation Mortgage to 75% LTV, therefore: Mortgage on House: £120,000
Money left in Deal: £18,000
Rent: £750 (based on local comparison and estate agent recommendations for the area)
Mortgage Interest (2.5%rate): £250
Management fee (10%): £75
Maintenance and Insurance: £75
Net Profit (before tax): £350
ROI = 4200/18000 = 23%
Capital appreciation has been approx. 4%/yr and hopefully continues in this area of Birmingham, although might slow down for the short term. I am planning to hold on to the house for 20+ years. Please let me know what your thoughts are. This is the first BRR project I am undertaking and hope it goes well.
Many Thanks
I would like to share a current BRRR (Buy Refurbish Refinance Rent) deal I am closing in on, please let me know if this stacks up.
3 Bedroom Mid terrace House in Birmingham that requires modernising (no structural work, just new kitchen, bathroom, replaster and decorating. This is a probate sale where the owner has sadly passed away and his three sons selling, Asking Price: £130,000 Negotiated to £117,000 as I am cash buyer and able to proceed quickly and also I think the Brexit uncertainty has reduced the number of buyers recently. Therefore the figures are:
House price: £117,000
Stamp Duty and Legals: £4,500
Renovation Cost: £15,000
Holding cost for 6 months (Utilities, Council tax, water): £1,500
Total Invested: £138,000
Expected Market Value after Renovation: £160,000 (based on 4 properties with: identical layouts, within 1/2 mile radius) I know I will have to convince a RICS valuator.
Post Renovation Mortgage to 75% LTV, therefore: Mortgage on House: £120,000
Money left in Deal: £18,000
Rent: £750 (based on local comparison and estate agent recommendations for the area)
Mortgage Interest (2.5%rate): £250
Management fee (10%): £75
Maintenance and Insurance: £75
Net Profit (before tax): £350
ROI = 4200/18000 = 23%
Capital appreciation has been approx. 4%/yr and hopefully continues in this area of Birmingham, although might slow down for the short term. I am planning to hold on to the house for 20+ years. Please let me know what your thoughts are. This is the first BRR project I am undertaking and hope it goes well.
Many Thanks