Latest Valuation
£200,000
ROCE
%
Location

Commercial Conversion Opportunity in Blackpool

Nearly All Money Out Development Opportunity in Blackpool
Guide Price
£185,000

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Key Features

  • Prime Location
  • Commercial Conversion
  • Projected Net Cashflow: £20,625 pa
  • Guaranteed 5 yr FRI Lease
  • BMV Conversion Opportunity
  • Nearly all money out

The Property

Currently empty shops with storage units above all under one freehold title and whole block classed as A1.

Planning permission (lapsed in 2014) to convert to 5 X 2 Bedroom Apartments and a large commercial unit of 200m2. Each flat will be 48m2.

Prime location in Blackpool ideal to be used as serviced accommodation.

Serviced accommodation operators in place ready to pay you guaranteed rent of £500 pcm for each apartment. They will offer a Fully Repairing and Insuring lease for 5 years, making the investment completely hands off. All maintenance will be carried out by the operator and with no management fee, no voids and no repairs, this investment is truly hands-off passive income.

Alternatively, sell in the open market for instant profit.

PRIME LOCATION COMMERCIAL CONVERSION

The Property:

Freehold block on 1 Title
Existing use class A1 to be converted to A1 + C3
Planning lapsed in 2014

MARKET VALUATION: £570,000 (AFTER REFURBISHMENT)

PURCHASE PRICE: £185,000
REFURBISHMENT: £200,000
PROJECT MANAGEMENT £16,800
STAMP DUTY £700
LEGALS £1,500
SOURCING FEE £5,000

TOTAL COSTS £409,000

DEPOSIT TO RESERVE: £5,000 (DEDUCTIBLE FROM PURCHASE)

FRI FLAT LEASE GROSS INCOME: £30,000
COMMERCIAL GROSS INCOME £12,000

TOTAL INCOME £42,000 YIELD: 7.37%

PROJECTED NET CASHFLOW £20,625 PA | £1,719 PCM

NEARLY ALL MONEY OUT

Planning Information

Planning for 5 X 2 Bedroom Apartments and one large shop lapsed in 2014
Resubmit mirror plans to Blackpool planning department which should be granted within 8 weeks

The Plan

The Opportunity

Mirror the lapsed planning application and resubmit to planning to convert to 5 X 2 Bedroom Apartments and one large commercial shop. This should be granted within 8 weeks.

Money in -

£185,000 purchase price. Market value £200,000
£200,000 Refurb

Bridge
65% of purchase price £185K. Loan: £120,250.
50% of GDV £570K (£285,000) less £120,250. Loan: £164,750
Total loan: £285,000

Total cash in;

Purchase price + refurb = £385,000 - £285,000 = £100,000
SDLT £700
Legals £1,500
Project management: £16,800
Sourcing fee: £5,000

Total: £124,000

Or cash buyer £409,000

No CIL
Section 106 already paid

Post works;

GDV of each flat £90,000 X 5
Shop £120,000 (10 X annual rent of £12,000 - capitalisation rate of 10%)

Total GDV: £570,000

Regarding the GDV, current similar new builds for sale in area;

https://www.rightmove.co.uk/property-for-sale/property-63931710.html
https://www.rightmove.co.uk/property-for-sale/property-84393710.html

Exit;

Option 1 - Buy and hold for cashflow

Refinance 75% against £570K at 5% = Loan: £427,500. Annual interest: £21,375

Loan pays back;

- Original bridge £285,000
- Finance costs: £25K (paid monthly over 6 months - 1.25% pcm + 1.25% arrangement fee)
- Your initial £124,000 invested funds:

Total left in: £6,500

RICS Building Surveyor

The project manager will be a RICS building surveyor. Their job is to take care of the renovation and deliver the job on time and within budget, subject to unexpected circumstances arising.
All payments will be verified by the RICS building surveyor via payment certificates to ensure that payment is made for only works that have actually been completed. Meaning all payments will be
made in arrears.
The project manager will administer all of the paperwork in relation to the building works including a JCT contract between you the client and the contractor. Also a service agreement between the
project manager and you the client.
Throughout the project the project manager will provide weekly updates via written, photo and video updates

FRI Lease

All residential units will be used as serviced accommodation by an in-place operator. They will offer a Fully Repairing and Insuring leases for 5 years
All maintenance will be carried out by the operator so there is no management fee, no voids and no repairs. There will be a tenant only break clause at the end of year 1
The rent reviews will be cap and collared with the retail price index so rents are increased fairly in line with the market

Cashflow Numbers

5 x 2 Bed S.A Flats @ £500 per month £30,000 per annum
1 x Commercial Units £12,000 per annum
Total Gross Income £42,000 per annum

Less:

Mortgage £21,375 per annum
Circa Net Cashflow £20,625 per annum
Circa Net Cashflow £1,719 per month

Option 2 - sell in open market
Realise £136,000 gain

Limited risk exposure;

Desktop RICS survey can be supplied before completion
A RICS surveyor will act as the contractor overseeing all works. The works have been costed already and a schedule of works will be provided
Stud walls already erected

To Buy;
£5,000 deposit deducted from purchase price

The vendor couldn’t afford to do the conversion at the time planning was granted and now his financial position is even worse, hence he's looking for a quick sale

The Location

The block is in ideal location for Blackpool tourism located close to the promenade and short walk from all the major attractions. There is a large car park a 2 minute walk from the property for ample parking for Guests.

Lytham Festival is held every summer on Lytham green, attracting thousands of tourists. Night prices will be up on these dates

Royal Lytham golf course is situated within close proximity to the property and there is regularly professional golf championships played on this course which attracts golf fans from around the world.

BAE Systems Warton is a corporate employer just outside of Lytham (5 min car drive) this is a corporate outfit we will approach for longer term stays.

Blackpool Pleasure beach attracts thousands to the area every single year. Perfect for Families

Sandcastle waterpark another great attraction for families

Regeneration and Investment Into Blackpool
Blackpool is a perfect location to invest in both residential and commercial property.
It is an unsaturated improving market filled with opportunity for investment and great return on that investment.
The town has a population of circa 150,000 and the demand for rental residential property is very high.
There are hundreds of millions of pounds in investment presently being made in Blackpool with regeneration schemes throughout the town, breathing new life into areas with the creation of new
leisure sites, hotels and restaurants.
Large hotel chains such as Premier Inn, and Hilton are building brand new state of the art hotels on the sea-fronted promenade. Hilton in particular have invested £30 million in their new 130 bedroom hotel, which is set to transform the street scene on the south shore coast line.

Another massive boost to the Blackpool economy is the fracking site that commenced operations in the summer of 2017 and which has brought in excess of 15,000 jobs to Blackpool and
Lancashire. There has never been a better time than now to invest in Blackpool.

• Hampton by Hilton to open in Blackpool 2018 - Part of £31Million regeneration project
• Leisure Giant Whitbread proposed £10 Million Pound Premier Inn Hotel Approved
• Cuadrilla Natural gas from UK shale creating thousands of jobs
• Persimmon Homes - Coastal Dunes Development
• Kensingtons
• Redwood Point Blackpool landmark development
• £300m Chariots of the Gods Development in the centre of Blackpool
• Blackpool Central State of the Art Development

9 year Development which will be implemented in 3 phases starting in 2020

Average estimated value for a house in FY1 4PD

£

Most properties were sold in the £100k-£150k price range with 1670 (33.4%) properties sold, followed by £50k-£100k price range with 1383 (27.7%) properties sold.

Blackpool property sales share by price range shows a number of properties sold in a given price range between October 2018 - September 2019.
Property price range Market share Sales volumes
under £50k 1.8% 91
£50k-£100k 27.7% 1.4k
£100k-£150k 33.4% 1.7k
£150k-£200k 16.9% 844
£200k-£250k 9.1% 457
£250k-£300k 4.7% 236
£300k-£400k 4.0% 201
£400k-£500k 1.2% 62
£500k-£750k 0.9% 44
£750k-£1M 0.2% 8
over £1M 0.0% 2

13.60%
Last 5 years postcode house price growth

The average price for property in Coronation Street stood at in November 2019. This is a rise of 1.64% in the last three months (since August 2019) and rise of 2.08% since 12 months ago.