HMO Acquisitions

High Net Worth HMO Acquisitions

Targeting 15% Return on Cost & 15% Net IRR*

South East Locations

Add Value Opportunities

Accredited Investors Only

Min Funds Required £750K

Acquisition Strategy

Development Strategy

HNW HMO Acquisitions

Acquisition Strategy

Property Type: Properties with 4 to 5 bedrooms, suitable for conversion and reconfiguration to provide 7 to 10 bedrooms.
Location: Focus on areas within the South East of England with strong demand for professional HMOs.
Minimum Purchase Price: £350,000.
Development Budget: Minimum allocation of £250,000 for property conversion and enhancement.

Development Strategy

Full Planning Application: We undertake comprehensive planning applications to ensure all properties comply with local regulations and maximize their potential.
Maximization of Space: Our team employs innovative design solutions to optimize available space, enhancing both functionality and comfort for occupants.
Ensuite Installation Throughout: To meet modern living standards and increase property desirability, we install ensuite bathrooms in all bedrooms.

HNW HMO Acquisitions

Some examples of our experience Acquiring HMO Developments.

Type

Purchase

Area

Project  £

Total Cost

GDV

ROC

Gross

Net

Professional

£285K

SE

£205K

£490K

£630K

£140K/28.6%

£63K/13.0%

£47K/9.7%

Professional

£275K

SE

£260K

£535K

£806K

£270K/50.5%

£76K/14.2%

£57K/10.7%

Professional

£395K

Lon

£250K

£645K

£901K

£256K/39.7%

£88K/13.8%

£66K/10.3%

Professional

£422K

SE

£380K

£802K

£950K

£147K/18.4%

£99K/12.3%

£74K/9.3%

Professional

£340K

SE

£300K

£640K

£600K

-£40K/6.3%

£78K/12.3%

£59K/9.2%

Professional

£410K

SE

£210K

£960K

£1.1M

£190K/19.8%

£134K/14.0%

£100K/10.5%

Professional

£425K

SE

£205K

£744K

£950K

£206K/27.7%

£98K/13.2%

£73K/9.9%

Professional

£465K

Lon

£205K

£916K

£1.1M

£169K/18.4%

£105K/11.5%

£79K/8.6%

Professional

£500K

SE

£205K

£735K

£865K

£130K/17.7%

£75K/10.2%

£56K/7.7%

Professional

£600K

SE

£205K

£850K

£975K

£125K/14.7%

£100K/11.8%

£75K/8.8%

Professional

£525K

SE

£205K

£725K

£855K

£130K/17.9%

£89K/12.3%

£66K/9.2%

Professional

£475K

Lon

£205K

£750K

£900K

£150K/20%

£90K/12.0%

£67K/9.0%

Professional

£450K

SE

£205K

£640K

£750K

£110K/17.2%

£82K/12.8%

£61K/9.6%

Professional

£550K

SE

£205K

£760K

£870K

£110K/14.5%

£92K/12.1%

£69K/9.1%

Investment Objectives

Development Objective: Achieve a minimum return of 20% on development costs, with an absolute minimum profit of £200,000 per project.
Net Cash Flow Objective: Generate a net cash flow yielding at least 6.5% after covering utilities and other operational expenses, equating to a minimum of £3,000 per month.

Investor Requirements

To ensure successful partnerships and align with our investment objectives, we have established the following criteria for prospective investors:

1. High Net Worth Individual (HNWI) Status (Self-Certified):Financial Criteria: As of March 27, 2024, the UK defines an HNWI as someone with:
Annual Income: A net income of at least £100,000 in the last financial year.
Net Assets: Net assets of at least £250,000 throughout the last financial year, excluding primary residence, rights under qualifying contracts of insurance, or benefits from pensions
Self-Certification: Investors can self-certify their HNWI status by completing the appropriate statement, as outlined by the Financial Conduct Authority (FCA).
2. Financial Commitment:Capital Availability: Investors should have a minimum of £750,000 in working capital to engage in our HMO property investments.
3. Commitment to Compliance:Regulatory Adherence: A willingness to comply with all local council regulations and licensing requirements pertinent to HMO properties.
Ethical Standards: A commitment to maintaining high ethical standards in all investment activities.
4. Understanding of Risk:Planning Permission Challenges: Investors should be aware that converting properties into HMOs may require full planning permission, especially in areas with Article 4 Directions. This process can be complex and time-consuming, with potential for refusal due to factors like overconcentration of HMOs or inadequate facilities.
Mitigation Strategies: To address these challenges, we collaborate with specialized HMO planning consultants who have a deep understanding of local planning policies and experience in navigating the application process. Their expertise significantly enhances the likelihood of obtaining necessary permissions.

Fee Structure

We offer a transparent and flexible fee structure to accommodate the diverse needs of our investors:
Acquisition Fee: 4% of the property's purchase price, plus VAT at the prevailing rate.
Project Management Fee (Optional): 15% of the total development cost, plus VAT at the standard rate of 20%.
Lettings and Management Fee (Optional): 13% of the monthly rental income, plus VAT at the standard rate of 20%.
Our in-house lettings and management team is available to provide comprehensive services, including tenant sourcing, rent collection, property maintenance, and compliance with all relevant regulations. Engaging our project management and lettings services is optional, allowing investors the flexibility to manage these aspects independently if preferred.

Disclaimer

Investing in property development, particularly in converting properties into Houses in Multiple Occupation (HMOs), involves inherent risks. While we strive to mitigate these risks through thorough planning and professional expertise, certain factors are beyond our control.
Investment Risk: All investments carry a degree of risk, including the potential loss of principal. Past performance is not indicative of future results.
Planning Permission: Obtaining planning permission is not guaranteed. Applications may be declined due to various factors, such as local council regulations, community objections, or environmental concerns.
Market Volatility: Property values and rental incomes can fluctuate due to economic conditions, changes in local demand, or unforeseen events.
Regulatory Changes: Alterations in housing laws, tax policies, or HMO licensing requirements can impact the viability and profitability of the investment.
Construction Risks: Development projects may encounter delays, cost overruns, or quality issues due to unforeseen site conditions, contractor performance, or supply chain disruptions.

Prospective investors should conduct thorough due diligence, consider their financial situation, and consult with independent financial advisors before making investment decisions. Engaging in property development requires a comprehensive understanding of the associated risks and a preparedness to accept potential losses.

HMO Acquistions FAQs

What types of properties do you target for acquisition?

We focus on 4 to 5-bedroom properties that can be reconfigured to create 7 to 10-bedroom HMOs.

What is the minimum property purchase price?

Which areas do you invest in?

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