This document discusses various property investment options, including houses of multiple occupancy (HMOs) and buy-to-let properties. It provides examples of two potential HMO acquisition proposals, including purchase prices, rental incomes, valuations, and financing options. It also outlines options for investors, including both long-term investments with shared risk and returns, and shorter-term, fixed-return investments secured by a property charge.

2. • 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

4. • 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.

5. • 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

6. • Agreed offer of 200k
• Simple acquisition for cash flow
• Generates 31k gross p.a.
• Commercial valuation expected
210k+
• Refi loan 157.5k

7. Initial loans Refinance
Property A 120000 165000
Property B 200000 157500
Total 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 16000
Total 58800 27500 34000

8. • 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

9. • 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.

11. • 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

12. • 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

14. • 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

15. • 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

16. • 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.

17. • 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!

18. Planning to have a prosperous
New Year?
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0151 305 0194
to make sure of yours!