The Opportunity
We sold two neighbouring 6-bedroom HMOs in Folkestone to an investor we had been working with for around 12 months.
Portfolio Highlights
- Combined Asking Price: £645,000
- Combined Estimated Value: £790,000
- Annual Rental Income: £87,300
- Combined Yield: 13.5%
- Total Bedrooms: 12
The first property was priced at £335,000, producing £47,580 per year at a 14.2% gross yield.
The second was priced at £310,000, producing £39,720 per year at a 12.81% gross yield.
Both were modern, well-presented HMOs and offered the buyer the opportunity to acquire a strong small portfolio in one location.
The Challenge
The sellers were based in Ukraine at the time, which made communication and managing the transaction more difficult.
During legals, it also came to light that the correct HMO planning position was not fully in place.
With the buyer’s mortgage offer approaching expiry, we had to work quickly.
We helped coordinate planning professionals, the required application, improvements to the cycle storage and access to the properties, while working alongside the buyer, seller and solicitors to keep the deal alive.
A legal arrangement was put in place to allow completion to proceed while the planning matter was finalised.
Planning was subsequently approved.
The Result
After around a year of working with the buyer, we successfully completed the £645,000 acquisition of both HMOs, producing over £87,000 per year in rental income.
The deal generated an approximately £12,000 sourcing fee, alongside a seller-side fee.
More importantly, it demonstrates the value of staying involved throughout the entire transaction.
We didn’t just introduce the deal. We helped manage the problems, coordinate the different parties and get a complicated transaction over the line.